The latest binge watch for many of us at GQ|Littler was the Netflix hit, “America’s Sweethearts: Dallas Cowboys Cheerleaders,” which follows a year in the life of NFL’s Dallas Cowboys cheerleading team.
Naturally, it got us thinking about equal pay laws and the concept of “work of equal value,” which allows comparisons to be made between pay for workers in roles that, on their face, have material differences but are assessed as being of “equal value.” This concept has been central to equal pay law in the UK for decades and is now coming to the forefront in the EU as it is central to the obligations on employers in the pay transparency directive (the PTD).
One of the most surprising things we learned from the series is that the Dallas Cowboys Cheerleaders (DCC) dancers were not paid much (potentially as little as 50,000 USD a year) compared to the football players, who can earn millions, whilst many of the dancers also work a day job. Even the mascot is said to be paid 65,000 USD per year. Needless to say, the football team are all men and the DCC are all women.
Could it be said that the DCC are doing work of “equal value” to the football players? We don’t have an answer to that, but there are certainly some illuminating comparisons to get employers in the UK and EU thinking about “equal value.”
The DCC are all highly trained dancers and athletes, putting in hours and hours of hard physical labour, just as the football players are highly trained athletes putting in hours and hours of hard physical labour. The DCC are also hugely profitable and key to the Dallas Cowboys brand and marketing strategy – considering the Dallas Cowboys are the highest-grossing franchise in the NFL, the huge pay differential is perhaps surprising.
What is “work of equal value”?
The concept of “work of equal value” is, at its simplest, a comparison between jobs that might seem very different but when distilled down, are actually of equal value to the employer. “Value” is a concept that has been developed in decades of UK cases and will depend on an assessment of all the facts in a particular case, meaning there are no easy answers.
A finding of “equal value” is not sufficient to win a claim on its own if employers are able to show that that the pay differential is caused or explained by a “material factor” and that this factor is not itself tainted by sex discrimination.
Historically in the UK, the most high-profile equal pay cases have drawn comparisons between women in customer service roles and men in more physical labour-intensive roles. For example, in cases involving major supermarkets it is commonly argued that the predominately female store staff are doing work of equal value to the predominately male (and better paid) warehouse staff.
The requirement for EU member states to ensure equal pay for work of equal value is contained in one of the foundational treaties of the EU, but to date it hasn’t had the same prominence as a concept in EU law as it has in the UK.
That, however, is changing with the PTD.
The PTD means that employers in the EU will have to proactively make assessments of equal value due to the requirement to report on gender pay gaps in relation to “categories of worker” who are doing the same work or work of equal value. For more on the requirements of the PTD, see our article here.
The PTD sets out that the assessment of equal value needs to use objective, gender neutral criteria that cover the following four factors; skill, effort, responsibility and working conditions. However, as the PTD will need to be implemented in every Member State by June 7, 2026, there is scope for differences in how employers need to assess “equal value” across the EU.
The PTD requires Member States to introduce analytical tools or methodologies for employers to assess equal value. Member States should ensure that training is available to employers and provide guidance on how to conduct the equal value assessment. This risks creating a fractured approach across the EU to “equal value,” where different countries take different approaches, so there could potentially be different results on the equal value question if the same facts were applied in different countries. This will be complex for employers with operations across the EU to navigate as it may make it more difficult to take a single, centralized view of assessing equal value across the EU.
Why “equal value” arguments can lead to big liabilities
Recent examples from the UK show how significant the potential liabilities are for employers when “equal value” comparisons are successful.
- In September this year (2024), 3,540 female shop-floor staff of a retailer were successful in their equal pay claim comparing basic pay and other contractual terms with better paid and predominately male warehouse staff. The employment tribunal concluded that the shop staff and warehouse staff were doing work “of equal value.” The amount of compensation payable has not been determined yet and the retailer has indicated that it will appeal the decision, but estimates put the claim at around £30 million.
- A number of other high-profile retailers in the UK are facing similar claims from female shop workers seeking to compare their pay to male warehouse workers. Estimates in the press put the value of the one case at over £1 billion.
- In the public sector, there is a long history of significant compensation being ordered in “equal value”-type claims. Birmingham City Council, the second largest city in the UK, declared it was effectively bankrupt in 2023, in large part due to a liability of over £700 million in an “equal value” claim (the Council having already paid out around £1.1 billion in equal pay awards over the years).
In bringing a focus on “work of equal value,” the PTD may shine a spotlight on similar equal pay issues across the EU.
How to prepare
Although we’re still waiting for the details of the PTD’s implementation in each Member State, there are steps employers can be taking now to prepare and mitigate their risk.
- It is likely that the “equal value” assessment required to comply with the PTD will require a significant amount of work, particularly for employers with large workforces. Employers can start to assess this now, drawing on lessons from the UK, to identify potential categories of equal value within their workforce.
- Employers in the EU should seriously consider a test run of pay reporting and pay assessments to understand their risk. We strongly recommend that be done with the benefit of specific legal advice in order to ensure any investigation or audit is effective and conducted under legal privilege.
