Pay Differences in the Absence of Discrimination: Legislative Fallacies and Statistical Truths

Notre Dame Law School's Journal of Legislation
01.16.2024

There are lies, damned lies, and statistics,” so the saying goes,2 but what are we to make of legislatures and courts that ignore mathematical truisms and impute discriminatory motives to statistical inevitabilities? This is a unique and increasingly relevant concern with the Equal Pay Act (EPA) and corresponding state law litigation. 3 Because large pay differences abound among employees in the same demographic group doing similar work, the failure to distinguish between these benign differences and discriminatory sources of inequality will lead to attributing liability and exaggerated remedies in instances where no discrimination has occurred.4 For example, the laws of at least seven states require employers to account for the entirety of any pay difference between employees of different demographic groups or face liability.5 But, as we will explain, this standard generally will be impossible to satisfy regarding all employees in any demographic group, making liability all but inevitable.6

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2 “The phrase was popularized in the United States by Mark Twain (among others), who
attributed it to the British prime minister Benjamin Disraeli. However, the phrase is not found in
any of Disraeli's works and the earliest known appearances were years after his death. Several
other people have been listed as originators of the quote, and it is often attributed to Twain
himself.” Lies, Damned Lies, and Statistics, WIKIPEDIA, https://en.wikipedia.org/wiki/Lies,_damne
d_lies,_and_statistics [https://perma.cc/WK3R-NEHK] (last visited Feb. 20, 2023).

3 See Daniela Porat, State Equal Pay Laws Will Alter Litigation Landscape, LAW360 (Mar.
13, 2023, 9:46 PM), https://www.law360.com/employment-authority/articles/1585145/stateequal-pay-laws-will-alter-litigation-landscape [https://perma.cc/X32F-KKLX].

4 See Daniela Porat, State of Pay: Approaches to Gender-Based Disparity, LAW360 (Aug. 13,
2021, 2:56 PM), https://www.law360.com/employment-authority/articles/1412768/state-of-pa
y-approaches-to-gender-based-disparity [https://perma.cc/8TNG-GPHH] (citing practitioner’s
argument that employers will continue to face challenges “because of the myriad of [sic]
circumstances, contexts and compensation systems among different employers and even different
workers in one company”).

5 CAL. LAB.CODE §§ 1197.5(a)(1)(D), (3) (West 2023) (“The one or more factors relied upon
account for the entire wage differential.”); COLO.REV. STAT. § 8-5-102(1)(c) (2022) (“[E]ach factor
relied on in subsection (1)(a) of this section accounts for the entire wage rate differential. . . .”); 820
ILL. COMP. STAT. ANN. 112/10(a)(4)(C) (West 2023) (“accounts for the differential”); MD. CODE
ANN., LAB.&EMPL. § 3-304(c)(7)(iii) (West 2022) (“accounts for the entire differential”); N.J. STAT.
ANN. § 10:5-12(t)(4) (West 2023) (“[O]ne or more of the factors account for the entire wage
differential. . . .”); WASH. REV. CODE ANN. § 49.58.020(3)(a)(iii) (West 2023) (“Account for the
entire differential. More than one factor may account for the differential.”); OR. REV. STAT. §
652.220(2)(I) (West 2022) (“Any combination of the factors described in this paragraph, if the
combination of factors accounts for the entire compensation differential.”).

6 See Porat, supra note 3. Most of the following discussion will be in terms of sex discrimination because that is prohibited by the Equal Pay Act and corresponding state law; however, the same considerations apply to comparisons between all demographic groups.

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