Excerpted from South Dakota Employment Law Letter, written by attorneys at Lynn, Jackson, Shultz & Lebrun, P.C.

Although most employers are familiar with Title VII (which addresses various kinds of employment discrimination against a number of protected categories of employees), you may not know much about the Equal Pay Act, which addresses only sex-based wage differences. It's important for you to understand, however, that the Equal Pay Act is a slightly different animal than Title VII.

For instance, while employees suing under the Equal Pay Act can't recover compensatory damages (such as for pain, suffering, and humiliation) or punitive damages, they can recover back pay and "liquidated damages" - which means that if a court finds that you should have paid a female employee more, it will award that additional amount to her and then double it.

And while Title VII applies only to employers with 15 or more employees, the Equal Pay Act applies to all employers, regardless of the number of employees, that engage in "interstate commerce" - which means just about everybody.

You also need to know that unlike Title VII claims based on allegations of disparate treatment, employees filing Equal Pay Act claims aren't required to show that you intended to discriminate against them based on their sex.

To make out a discrimination claim under the Equal Pay Act, an employee (male or female) must show only that (1) in the same establishment (2) the employer pays different wages to employees of the opposite sex (3) who perform equal work on jobs requiring equal skill, effort, and responsibility and (4) the jobs are performed under similar working conditions. (If there are no employees of the opposite sex currently performing the same job as the employee who has filed a claim, she can point to pay received by her immediate predecessors or successors in the position.)

Thus, the simple fact that you pay men and women performing the same jobs differently may get you in hot water under the Equal Pay Act even if the individuals setting the salaries weren't acting out of any conscious discriminatory bias.

There are defenses available to employers under the Equal Pay Act. For instance, you can get off the hook for pay differences between men and women doing equal work by showing that the differences are justified by a legitimate seniority or merit system or by other nonsex-related factors, such as differences in experience or training.

You should be mindful when setting salaries, however, that your reliance on even seemingly "neutral" factors, such as a prospective employee's salary history, may later be viewed as an unlawful perpetuation of a history of discrimination.

For instance, a company that sets starting salaries for new employees based strictly on prior salary history and, as a result, ends up routinely setting lower starting salaries for new female employees than for new male employees with identical qualifications may be found liable for violations of the Equal Pay Act and may be liable under Title VII for engaging in a practice that has an unintentional - but nevertheless unlawful - "disparate impact" on female employees.

Copyright © 2005 M. Lee Smith Publishers LLC. This article is an excerpt from SOUTH DAKOTA EMPLOYMENT LAW LETTER. South Dakota Employment Law Letter is not intended to provide legal advice or opinions, but rather to provide information about current developments in South Dakota employment law. Questions about individual problems should be addressed to legal counsel.