How Can Women Legally Be Paid Less Than Men?

Matt Cardy/Getty Images News/Getty Images

The last eight years under the Obama Administration has seen a modest improvement in the ability of women to sue for fair and equal pay — the Lilly Ledbetter Fair Pay Act, for example, extended the statute of limitations in such cases and made it easier for women to sue for past wages. But now, an even older law, the Equal Pay Act which was passed in 1963, seems to need a bit of updating. How can women legally be paid less than men? It's ridiculous, but it seems there's a loophole to the legislation regulating fair wages.

Yes, that's right. The 9th Circuit Court of Appeals found Thursday that it's legal for men and women to be paid differently if their pay history differs. In other words, they can be doing the exact same job, but because a women was paid less by a previous employer, that's not illegal. There's a section of the Equal Pay Act that says men and women must be paid equally unless there's a "differential based on any other factor other than sex." And according to the court, salary history is one of those differentials.

This finding overturned a lower court ruling by U.S. Magistrate Judge Michael Seng's finding two years ago that those base salaries could be unequal because of gender bias in the first place. He wrote in 2015: "A pay structure based exclusively on prior wages is so inherently fraught with the risk ... that it will perpetuate a discriminatory wage disparity between men and women that it cannot stand, even if motivated by a legitimate nondiscriminatory business purpose."

To get a better idea for how this "legal" wage discrimination can happen, take a look at the plaintiff in the case, Aileen Rizo. According to the court's opinion, she was hired as a math consultant by Fresno County, California. To figure out her salary, the school looked at her prior job as a math teacher in Arizona.

Its standard procedure is to offer 5 percent more than the applicant's prior salary. In Rizo's case, the county's minimum salary for her new job was higher than her old wage plus five percent (Arizona wages are a lot lower than California wages). So in the end she ended up making $62,000 a year — less than all her male colleagues, but also technically based on a system not considered explicitly bias by the county.

That's a problem. In essence, this just exacerbates existing problems within society. Women who are currently paid less than men can expect employers to negotiate lower wages based on their prior job — and now that's not necessarily illegal.

As for what's next, taking it to the Supreme Court might make sense, but Rizo's lawyer, Dan Siegel, hasn't decided on their next step. He told the Associated Press that he disagrees with the ruling. "The logic of the decision is hard to accept," he told the AP. "You're OK-ing a system that perpetuates the inequity in compensation for women."

Siegel is right, but it might take improved, updated legislation to fix the wage gap. It seems the courts might not be a sure bet in interpreting laws passed nearly 55 years ago.