Appeals Court OKs Salaries Based On Past Pay

Basing wages on a worker’s prior pay level does not violate federal anti-discrimination laws, according to a three-judge panel of the Ninth U.S. Circuit Court of Appeals, though the court acknowledged that that practice can contribute to a pay gap between men and women who perform the same jobs. The case concerns Aileen Rizo, a Fresno schoolteacher who was paid $62,733 as a consultant for math teachers in Fresno County. That was $10,000 more than her previous salary, but significantly less than the $79,000 that a male colleague earned. Rizo said when she complained to county officials, she was told the differences were based on the employees’ salaries at their most recent jobs, plus a guaranteed raise of at least 5 percent. The federal Equal Pay Act allows differential pay based on a “factor other than sex,” and an employee’s past salary can fall into that category, the court said in a 3-0 ruling. Lawyers for Fresno County presented several justifications for their policy, saying it was based on objective facts, was applied consistently and without favoritism, and noted that female employees had also benefitted from the policy. The Ninth Circuit’s ruling is at odds with two other federal appeals courts, which interpreted the same law to mean that reliance on prior salaries is banned, which may set the stage for a Supreme Court appeal.