A California non-profit medical center with 15 health centers and clinics has agreed to pay $195,000 to three female employees and provide other injunctive relief following an investigation by the US Equal Employment Opportunity Commission (EEOC), the federal agency announced on April 1, 2025.
In July 2023, a female physician assistant filed an EEOC charge of discrimination alleging that she was consistently paid at a lower rate of pay than a male nurse practitioner, despite the fact that he had no prior experience as a nurse practitioner. The EEOC’s investigation found reasonable cause to establish that from approximately April 2022 through August 2023, she and two other women were paid less than the male employee for performing substantially equal job duties.
Such alleged conduct violated Title VII of the Civil Rights Act of 1964, which prohibits compensation discrimination based on sex, as well as the Equal Pay Act of 1963, which requires employers to pay equal wages to women and men who perform jobs that require substantially equal skill, effort and responsibility performed under similar working conditions within the same establishment.
After the EEOC’s investigation, the parties engaged in the pre-litigation conciliation process, resulting in a two-year agreement. The settlement requires the health center to provide compensatory damages, revise its non-discrimination policies and procedures, conduct a pay equity study, set objective criteria for compensation, provide training to all staff, and post a notice about equal employment opportunity rights.
Margaret Ly, director of the EEOC’s San Jose Local Office, said, “We commend [the health center] for their commitment to ensuring compliance with the federal laws against sex-based wage discrimination. This is a good reminder for all employers to set objective criteria when making compensation decisions and to apply those criteria consistently. Instead of basing pay on factors such as prior salary that may be discriminatory, employers should independently evaluate an individual’s job-related qualifications. Other suggestions for preventing compensation discrimination can be found at ‘Pay Tips’ in the EEOC’s Small Business Resource Center.”
Compliance Perspective
Issue
The right of employees to be free from discrimination in their compensation is protected under several federal laws, including the Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, and Title I of the Americans with Disabilities Act of 1990. These laws prohibit compensation discrimination in all forms, covering salary, overtime pay, bonuses, stock options, profit-sharing plans, life insurance, vacation and holiday pay, allowances, reimbursements, and benefits. The Equal Pay Act requires that men and women be paid equally for equal work in the same establishment. Jobs need not be identical but must be substantially equal in skill, effort, responsibility, and working conditions. Job content—not titles—determines whether jobs are substantially equal. Specifically, the Equal Pay Act mandates that employers may not pay unequal wages to men and women performing jobs requiring substantially equal skill, effort, and responsibility under similar working conditions within the same establishment.
Discussion Points
- Review and update policies and procedures to prevent all forms of discrimination, including those related to hiring practices, wage determination, and benefit assignments.
- Train staff on their right to be free from discrimination in the workplace. Teach staff to report any concerns of discrimination to their immediate supervisor or through the facility’s hotline.
- Audit wages across all levels of employees to ensure there is no evidence of sex-based compensation discrimination or violations. Periodically audit by conducting anonymous surveys to gauge whether employees feel they are free from discrimination and whether they feel safe reporting concerns without fear of retaliation or retribution.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
