President Obama is urging the Senate to pass the Paycheck Fairness Act, which died in 2008 when the Senate did not take action on it before the end of the Congressional session. In a written statement issued on July 20, 2010, President Obama called the proposed law “a common sense bill” to ensure equal pay for equal work by men and women.
If the Paycheck Fairness Act is passed as currently written, the result would be large-scale changes to the Equal Pay Act (“EPA”), which was added in 1963 as an amendment to the Fair Labor Standards Act. The provisions would apply to all employers who are covered by the Fair Labor Standards Act (FLSA). Here are some of the most notable changes proposed in the Paycheck Fairness Act:
Greater Potential Damages. The Amendment would allow unlimited compensatory and punitive damages for employees who can prove gender pay discrimination. This is a significant expansion beyond the liquidated damages and back pay currently authorized by the EPA.
Narrowing Employers’ Defenses. Under the EPA, an employer may be able to justify a difference in pay between male and female employees if the employer can show that the disparity is due to some factor other than sex. The Act would require that this other factor rise to the level of a “bona fide factor” in order to work in the employer’s defense. Factors such as the negotiating skill of the employee may no longer justify disparities in pay between male and female employees. In addition, the Act sets forth certain ways that the employee can defeat defenses raised by the employer.
Expanded Retaliation Provisions. Under the Paycheck Fairness Act, the protection from retaliation applies to any employee who inquires about, discusses, or discloses the wages of the employee or another employee in response to a complaint or charge, or in furtherance of a sex discrimination investigation, proceeding, hearing, or action, or an investigation conducted by the employer.
The bill also would trigger other activities: It establishes the National Award for Pay Equity in the Workplace, grants for negotiation training for women, and extra funds for education and research about pay disparity due to sex. In addition, it requires the Equal Employment Opportunity Commission (EEOC) to issue regulations within eighteen months of the passage of the bill that provide for the collection of pay information from employers relating to the sex, race, and national origin of employees.
If this Act becomes law, it could require fundamental changes in employer practices with regard to hiring and compensation. Stay tuned as we watch for the Senate’s reaction to President Obama’s message.
