Policy Statement: Differences in the payment of reimbursable expenses for travel

N-915.021

February 5, 1988

1. SUBJECT: Policy Statement: Differences in the payment of reimbursable expenses for    travel.
2. PURPOSE: This policy statement reflects the Commissions position in cases involving differences in the payment of reimbursable expenses for travel between men and women          performing equal work.
3. EFFECTIVE DATE: February 5, 1988
4. EXPIRATION DATE: August 5, 1988
5. ORIGINATOR: Title VII/EPA Division, Office of Legal Counsel.
6. INSTRUCTIONS: File behind Section 701.
7. SUBJECT MATTER:

            An employer may not differentiate between men and women in the payment of reimbursable expenses for travel. Travel expenses are wages and, pursuant to the Equal Pay Act (EPA), an employer must provide both sexes equal remuneration for equal work.[1]

            The Equal Pay Act does not define wages, but the legislation that it amended, the Fair Labor Standards Act of 1938 (FLSA), does. Section 203(m) of the Fair Labor Standards Act states that the [w]age paid to any employee includes the reasonable cost . . . to the employer of furnishing such employee with board, lodging, or other facilities, if such board, lodging, or other facilities are customarily furnished by such employer to his employees... Since travel expenses include lodging and board while traveling on business, the plain meaning of §203(m) includes travel expenses as wages.

            Congress has made it clear that definitions and interpretations already utilized in applications of the Fair Labor Standards Act should be utilized in applying the Equal Pay Act. The House Report on the Equal Pay Act stated:

The bill (H.R. 6060) would add one additional fair labor standard to the act; namely, that employees doing equal work should be paid equal wages, regardless of sex. Because of the long history and experience of Government and business workers under the Fair Labor Standards Act, a simple expansion of that act to include the equal pay concept offers the most efficient and least difficult course of action. The Fair Labor Standards Act has been on our statute books now for almost a quarter of a century.... Such utilization serves two purposes: First, it eliminates the need for a new bureaucratic structure to enforce equal pay legislation; and second, compliance should be made easier because both industry and labor have a long-established familiarity with existing fair labor standards provisions.

H.R. Rep. No. 309, 88th Cong., 1^st Sess. (1963), U.S. Code Cong. & Admin. News 1963, pp. 687, 688.

            Pursuant to Reorganization Plan No. 1 of 1978 (43 F.R. 19807) and Executive Order No. 12144 (44 F.R. 37193), responsibility for enforcement of the Equal Pay Act was transferred from the Department of Labor to the EEOC. In 1986 the EEOC published its final interpretations of the Equal Pay Act, which defined wages as follows:

Under the EPA, the term "wages" generally includes all payments made to [or on behalf of] an employee as remuneration for employment. The term includes all forms of compensation... whether called wages, salary, profit sharing, expense account, monthly minimum, bonus, uniform cleaning allowance, hotel accommodations, use of company car, gas allowance, or some other name.

Interpretations of the Equal Pay Act, 29 C.F.R. S 1620.10. (emphasis added).

            The Commission position is in accord with the current case law in the Laffey series of cases. In Laffey v. Northwest Airlines, 567 F. 2d 429, 12 EPD 11216 (D.C. Cir. 1976), cert. denied, 434 U.S. 1086, 16 EPD 8140 (1978) [hereafter Laffey I], the court held that the airline violated equal pay provisions by providing less expensive and less desirable layover accommodations to female employees than to male employees. Although the payments for lodging were made directly to the hotels and not to the employees as reimbursement, such payments constituted wages within the meaning of the Equal Pay Act. Also, the practice of providing uniform cleaning allowances to male but not female flight attendants violated equal pay provisions. Laffey v. Northwest Airlines, Inc., 642 F.2d 578, 24 EPD § 31288 (D.C. Cir. 1980), [hereafter Laffey II] held that, generally, layover provisions for rooms and uniform allowances fall into the category of allowances for the benefit of the employer (non-wages). However, where males are given allowances in excess of those given to females, the allowance cannot be said to be in the interests of the employer. If the allowances were in the employer's interest, he would provide them to females as well as males. Therefore, the discriminatory layover provisions and uniform allowances violated equal pay provisions.

            In Laffey v. Northwest Airlines, Inc., 740 F. 2d 1071, 34 EPD 34540 (D.C. Cir. 1984), cert. denied, 105 S.Ct. 939, 35 EPD 34855 (1985), the court upheld Laffey I and Laffey II determinations that the uniform cleaning allowances were simply another supplement to male salaries and constituted wages under the Equal Pay Act. The clear import of the Laffey cases is that travel expenses are considered wages under the Equal Pay Act.

CHARGE RESOLUTION

            When charges are received alleging Equal Pay Act violations based on the payment of unequal travel expenses between men and women performing equal work, the charge should be analyzed and investigated in the same manner as charges alleging unequal pay for equal work.

2-5-1988

____________________                                            Approved:            _________________

Date                                                                                                    Clarence Thomas

                                                                                                              Chairman

[1]  Differences in the payment of reimbursable travel expenses are also prohibited y Title VII of the Civil Rights Act of 1964, as amended, (Title VII) and the Age Discrimination in Employment Act of 1967 (ADEA). Title VII makes it unlawful for employers to discriminate against individuals with respect to compensation because of race, color, religion, sex or national origin. The ADEA makes it illegal for an employer to discriminate against an individual with respect to compensation because of his/her age.