EEOC Informal Discussion Letter

EEOC Office of Legal Counsel staff members wrote the following informal discussion letter in response to an inquiry from a member of the public. This letter is intended to provide an informal discussion of the noted issue and does not constitute an official opinion of the Commission.

Title VII / Equal Pay Act - Wage Discrimination

August 7, 2000

Dear

This is in response to your letter to Chairwoman Ida L. Castro, dated June 15, 2000. The Chairwoman has asked this office to respond directly to you.

Your letter expresses your support for the Equal Pay Task Force that the U.S. Equal Employment Opportunity Commission (EEOC or Commission) formed on May 11, 2000. Your letter also states your concern, however, that "approximately a year ago" someone at the Commission informed you that temporary workers had to compare their pay to other temporary workers for purposes of the equal pay laws. In your view, "this concept is in error . . . . [A]n employee must receive equal pay for equal work, regardless of status." Your letter expresses your view that the recent trend of employers using temporary workers rather than permanent employees is unfair, and should be prohibited.

The EEOC enforces the Equal Pay Act of 1963 (EPA), as well as Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act of 1967 (ADEA), and the Americans with Disabilities Act of 1990 (ADA). These laws generally prohibit pay discrimination, and other forms of employment discrimination, on the basis of race, sex, color, religion, national origin, age, and disability.

In 1997, the Commission published a policy document titled Enforcement Guidance: Application of EEO Laws to Contingent Workers Placed by Temporary Employment Agencies and Other Staffing Firms (1997). It is available on the EEOC's web site, at www.eeoc.gov. The document provides guidance regarding the application of the anti-discrimination statutes to temporary, contract, and other contingent employees. Two overriding principles of the document are:

• Staffing firm workers can be, and often are, employees of both the staffing firm and its client (i.e., the company to which a temporary worker has been assigned) because both often exercise considerable control over the workers. When this is the case, the staffing firm and the client each have an obligation not to discriminate with regard to the employees' hiring, firing, or other terms, conditions, or privileges of employment (including compensation, as stated above).
• Title VII, the ADEA, and the ADA also prohibit third parties (i.e., a company to which a temporary worker has been assigned) from interfering with the employment opportunities of any individual by discriminating against the individual on a protected basis. See 42 U.S.C. § 2000e-2(a) (Title VII); 29 U.S.C. § 623(a) (ADEA); 42 U.S.C. § 12112(a) (ADA).

As you noted in your letter, temporary workers often do not receive compensation on par with their permanent counterparts. The Commission does not consider this practice discrimination per se. But it does recognize the potential for this practice to be discriminatory in application, particularly in light of data showing that women are more likely than men to work as temporary employees.

Thus, the Commission's compliance manual states that in determining whether employees' status as temporary vs. permanent is nondiscriminatory, the following issues should be considered: 1) whether the wage differential is applied uniformly regardless of employees' protected status (e.g., race, sex, etc.); 2) whether the differential conforms to the nature and duration of the job; and 3) whether the differential conforms with a nondiscriminatory customary practice within the industry and establishment. See EEOC Compliance Manual Section 708.5(3) (BNA) 708:0023. EEOC investigators will explore these issues, among others, upon receiving a complaint in which a temporary employee alleges that s/he is being discriminatorily paid.

Your letter referenced other laws that may be implicated by temporary arrangements. The EEOC only enforces federal EEO law, and thus we cannot provide guidance outside the EEO context regarding temporary or other contingent work arrangements. However, we are aware of one U.S. court of appeals decision holding that workers who a company labeled as independent contractors and temporaries really were common-law employees of the company, thus entitling the workers to participate in company's savings and stock purchase plans under the terms of the plans. See Vizcaino v. Microsoft Corp., 120 F.3d 1006 (9th Cir. 1997), cert. denied, 522 U.S. 1098 (1998). This is not an EEO case. However, the decision may indicate that your concern about temporary workers being denied benefits is addressable, at least in some factual circumstances, under existing law.

We hope this information is helpful to you. Thank you for your input on this important issue.

Sincerely,

Corbett L. Anderson
Attorney Advisor
Title VII/ADEA/EPA Division

This page was last modified on April 27, 2007.