What is disparate treatment in a compensation context?
Disparate treatment is a term of art in employment discrimination law. Disparate treatment might occur in hiring, transfer, promotion, and other on the job actions, and, as the question suggests, in compensation. Disparate treatment within the context of compensation involves different treatment of a person because of his or her protected class, in any or all of the ways that people can be compensated on the job. This includes pay, health care benefits, sick leave, personal time, vacation, bonuses, the use of a company vehicle, educational benefits and any other perk of the job that is considered compensation for work performed.
One example of disparate treatment that was held to be illegal not all that long ago was the trend to provide health insurance for male employees and not for female employees. This was premised on the notion that the females had husbands who provided health insurance for their wives. Of course, this did not do a single woman much good! Since sex is a protected class and the employers' decisions about this form of compensation were based solely upon the sex of the employee, this was held to be unlawful discrimination.
Other instances in which there is disparate treatment in compensation might be an African-American employee who does not get use of a company car, while his or her white colleagues do, Christian people getting Sunday off for religious purposes while Jewish or Muslim employees are not availed this form of compensation for their work, or a man and woman, with the same experience and qualifications, doing the same work, while one is paid better than the other.
Who is in a protected class began to be defined at the federal level with the Civil Rights Act of 1964, and other protected classes have been added since then, in amendments and other federal statutes. Many states have anti-discrimination statutes as well, some parallelling federal statutes and some adding additional protected classes. Generally, race, sex, religion, national origin, ancestry, age, and disability are protected classes. Simply, when someone is treated differently because of his or her protected class in terms of compensation, this is against the law.