Alabama passed the Clarke-Figures Equal Pay Act which will go into effect in August, making Alabama the 49th state to enact legislation designed to fight wage inequality. While Alabama employers have been subject to federal laws regarding wage equality for years, Alabama workers may now also sue for wage discrepancies under Alabama law and in Alabama courts. Here are five things that you need to know about the Clarke-Figures Act.
- Equal Pay for Equal Work. The act prohibits employers from paying any worker at a wage rate less than that paid to employees of another race or sex for equal work where the jobs require equal skill, effort, education, experience, and responsibility under similar working conditions. There is an exception for payments made pursuant to a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or a differential based upon any factor other than race or sex. While this standard sounds a lot like the standard in the federal Equal Pay Act, it may be very different than the legitimate, nondiscriminatory reason standard under Title VII.
- Applicants Do Not Have to Provide Wage History. Employers may not refuse to interview, hire, promote, or employ an applicant and may not otherwise retaliate against an applicant for refusing to provide wage history information during the application or interview process. The law does not preclude an employer for asking about wage history, but employers cannot hold it against an applicant that refuses to provide it.
- Potential Damages. A successful plaintiff can recover an amount equal to the wages that were lost because of the violation, plus interest. This is different than the recovery available under Title VII (i.e., back wages, compensatory damages, punitive damages and attorneys’ fees) or the Equal Pay Act (i.e., lost wages, liquidated damages equal to the lost wages, and attorneys’ fees). If an employee pursues claims under both the new Alabama law and federal law and receives a recovery for both, the employee must return to the employer the lesser of the two amounts recovered.
- Two Years to File a Lawsuit. Employees have two years after the alleged discrimination to file a lawsuit. An employee who chooses to file suit must allege with particularity that:
- the employee was paid less than someone else for equal work despite having equal skill, effort, education, experience, and responsibility; and
- the wage schedule at issue was not correlated to any of the above-mentioned exceptions.
While it is possible that an employee may choose to only file suit under the new Alabama law, employers should expect claims to also be filed under the applicable federal laws, such as Title VII and the Equal Pay Act (which provide for attorneys’ fee awards and more potential damages).
- Recordkeeping Requirement. State law now requires Alabama employers to comply with the recordkeeping requirements established by the Department of Labor pursuant to the Fair Labor Standards Act.
It is unclear how much use this new law will get. Only time will tell.