The Act compels businesses to pay equal wages to employees performing substantially equal work, regardless of the sex of the individual employees. Pay differentials may be based on merit, seniority, or any lawful factor other than sex. The Equal Pay Act applies to all businesses regardless of the number of employees. Inequalities in pay between men and women for performance of "substantially equal jobs" are prohibited, unless the differences are due to a factor other than sex, such as a seniority system or merit system. Claims alleging violation of the Equal Pay Act are covered by employment practices liability insurance (EPLI) policies.