Pay equity, diversity and inclusion
How Some States and Localities Are Expanding the Definition of “Protected Class”
The definition of “protected class”—groups of people that share a common, legally protected characteristic—is in a state of expansion. New state laws and municipal ordinances provide insight into how we may see “protected classes” continue to develop.
The question of who falls into a protected class (sometimes referred to as “protected group”) is determined by federal, state, and local governments. The federal Equal Pay Act of 1963, for example, establishes “sex” as a protected group. Employers are prohibited from:
“…paying wages to employees … at a rate less than the rate at which [the employer] pays wages to employees of the opposite sex … for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.”
Other federal laws establish additional protected classes, such as Title VII of the Civil Rights Act of 1964, which makes it unlawful:
“…for an employer … to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”
There are many reasons for establishing a protected class. In the “Declaration of Purpose” of the Equal Pay Act, Congress found that the existence of pay disparities based on sex “(1) depresses wages and living standards for employees necessary for their health and efficiency; (2) prevents the maximum utilization of the available labor resources; (3) tends to cause labor disputes, thereby burdening, affecting, and obstructing commerce; (4) burdens commerce and the free flow of goods in commerce; and (5) constitutes an unfair method of competition.”
The bottom line is that pay inequity based on a protected characteristic, such as sex, is bad for business.
Recently, state and local governments are taking it upon themselves to expand the boundaries of which characteristics are protected. In 2018, New Jersey substantially broadened its definition of protected class under the Diane B. Allen Equal Pay Act to include:
“…race, creed, color, national origin, nationality ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy or breastfeeding, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or because of the liability for service in the Armed Forces of the United States.”
Portland, Oregon, took the unique step recently of extending protection from religious discrimination to people who are atheist, agnostic, or who are otherwise nonreligious. Of particular interest is the ban on employers within Portland from discriminating in employment, including in compensation, against atheists and agnostics. The new city ordinance creates remedies against employers in violation, including filing a complaint with the Oregon Bureau of Labor and Industries (BOLI) and filing a civil action in state court. Portland follows Madison, Wisconsin, as only the second city in the US to extend anti-discrimination protection to the nonreligious. The Portland ordinance goes into effect March 29, 2019.
Employers in Portland and Madison (with the exception of religious institutions) should review their policies and practices to ensure they are not in violation of the new ordinances. Businesses, in general, should continue to monitor changes in equal pay laws in the communities in which they operate because they may follow the trend of further expanding protected classes. Organizations may also consider performing a pay equity audit for a comprehensive window into their pay practices to get ahead of any potential issues involving pay equity that could pose litigation and financial risk.
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