House Approves Paycheck Fairness Act

Bill would strengthen Equal Pay Act protections

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The U.S. House of Representatives passed the Paycheck Fairness Act (H.R. 7) in a 242–187 vote March 27. If the bill is ultimately signed into law, it would prohibit employers nationwide from asking job applicants about their salary history and require them to prove that pay disparities between men and women are job-related.

Rep. Rosa DeLauro, D-Conn., reintroduced the bill in January. It has been reintroduced many times since 1997 but has failed to pass both chambers of Congress. Business groups that oppose the bill fear that employers will face frivolous lawsuits under the proposed requirements. The bill would amend the Equal Pay Act (EPA) to:

  • Prohibit employers from asking job applicants about their salary history or relying on salary history to set compensation.
  • Prohibit employers from retaliating against workers who discuss their pay with co-workers.
  • Require employers to show that pay disparities between men and women are job-related and consistent with business necessity.
  • Provide plaintiffs who file EPA claims the same remedies that are available to plaintiffs who file wage-discrimination claims based on race or ethnicity under Title VII of the Civil Rights Act of 1964.
  • Make it easier for plaintiffs to participate in class-action lawsuits that challenge systemic pay discrimination.
  • Establish a negotiation-skills training program for women and girls.

"By allowing federal pay equity claims to be brought as class actions, the act merely encourages litigation," says Susannah Howard, an attorney with O'Melveny & Myers in San Francisco.

[SHRM members-only toolkit: Managing Pay Equity]

The Society for Human Resource Management (SHRM) agrees that salary history should not be the sole factor in setting compensation. However, "employers should have the ability to discuss salary expectations with prospective employees," said SHRM President and Chief Executive Officer Johnny C. Taylor, Jr., SHRM-SCP, in a letter to Congress. "Salary expectations help employers establish value of the position to the organization as well as competitiveness of the market."

Employers design their pay structures to reflect the characteristics of their organizations, attract qualified applicants and retain top employees, he wrote, noting that H.R. 7 would prohibit some legitimate pay practices while establishing excessive liability against employers of all sizes.

Outcome Debated 

"It is important that mandates like the Paycheck Fairness Act are put into place to force employers to act responsibly and fairly in how they pay their people," said Tanya Jansen, co-founder of beqom, a compensation software provider. 

"Men and women in the same job deserve the same pay," DeLauro said at a March 25 hearing of the House Committee on Rules. The current law makes it difficult for women to obtain adequate remedies for pay discrimination, she said. "We need to give workers new tools to challenge discrimination and deter employers from violating the law," she added. "H.R. 7 merely restores Congress's intent, which has been undermined by court interpretations over the years, allowing employers to escape liability."

Rep. Bobby Scott, D-Va., who chairs the Committee on Education and Labor, told the House that "loopholes and insufficient enforcement have allowed gender-based wage discrimination to persist."

Rep. Bradley Byrne, R-Ala., lauded the purpose of the bill but said that H.R. 7 is "built on the false promise that it in some way helps women." While noting that "pay discrimination is repugnant and illegal," he said the bill would open the gates to "limitless, frivolous lawsuits." He suggested several amendments to the bill, including one to cap plaintiffs' attorney fees at 20 percent of the employee's award.

Howard noted that the gender pay gap is caused by a variety of factors, and many have nothing to do with employer discrimination. H.R. 7's "overall focus on increasing litigation against employers ... takes away from inquiries into these other significant factors," she said. For example, women continue to drop out of the paid workforce at higher rates than men, and they continue to be underrepresented in college and university programs that lead to higher paying jobs, such as in science, technology engineering and mathematics.

Establishing grants for negotiation-skills training for girls and women, however, is commendable, she said. "These types of programs are likely to do more to shrink the gender pay gap than will encouraging class-action lawsuits."

The bill passed the House mostly along party lines and is expected to stall in the Republican-controlled Senate. 

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