We reported the other day that the General Counsel of the EEOC sees more Equal Pay Act  (“EPA”) lawsuits coming.  What exactly does the EPA provide? It reads in relevant part:  “No employer … shall discriminate … between employees on the basis of sex … for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. …”  It is not the simplest claim to bring because a female employee has to find an appropriate comparator group of male employees.

A new decision from New Zealand construing a similar statute, if upheld, could create a nightmare scenario for employers by broadening the comparator group.  US employers might shudder to consider this new case.

The Dominion Post of New Zealand has reported that the The Employment Court has issued a preliminary ruling that “women in female-dominated industries can now compare themselves to men in other industries requiring similar skills when pushing for pay equality (emphasis added).”

Plaintiff is a female aged care worker in this low wage female-dominated industry.   “Some 92% of aged care workers are women and caregivers employed by the [Defendant] rest home in the court case earn $15 an hour or less.”  The contention in this union-backed case is that low wages for aged care workers amounts to gender discrimination since the vast majority of such workers are female.  It makes no sense, it is argued, to compare the wages of these 92% females to the other 8% males — better to look to other industries which are not traditionally female dominated and low paying.  Not a  bad legal argument.

The employer contended however, that just as employers in the US contend under the Equal Pay Act, “women workers should only be compared with men in the same industry doing the same work. …”

The Court, however, held that the low wages can in fact be considered discriminatory to women, even if there is a small group of men earning the same amount, and that women in female-dominated industries, such as home care, can now compare themselves to men in other industries requiring similar skills.  Anything less, the Court ruled, would “simply perpetuate discrimination in rates of pay to women.”

No doubt these workers, virtually all women, are paid a low wage, as are their male colleagues, but one could fairly ask — to what other industries should these female workers be compared and what similar skills?  Employers in New Zealand are calling this ruling “unworkable,” and a threat to “collapse” the industry. 18576610_s

The Dominion Post must have had similar questions when it interviewed an employment lawyer who commented that “the new interpretation could have wider implications for any industry where women dominated, notably health and education. She suggested nurses and teachers, both predominantly female professions, could be compared with police officers, to judge whether they were being fairly paid.”

She was further quoted as saying “I think employers will feel quite concerned about this.” Indeed, the executive director of the Defendant company said that if the employee ultimately prevailed, he had “dire concerns” about the implications.

We have not yet seen the decision, and unfortunately the article was not particularly specific when it came to the facts of the case, nor particularly analytical as to the relevant law, so perhaps our New Zealand colleagues can enlighten us further about the prevailing law and the implications of this case.