Senate Committee Examines Equal Pay Proposal

By Bill Leonard Mar 17, 2010

Equal pay for equal work has always been a hot-button election issue, and a recent hearing by the Senate Health, Education, Labor and Pensions (HELP) Committee could reignite debate on federal pay equity laws as the 2010 congressional elections approach.

A HELP Committee hearing on March 11, 2010, examined the proposed Paycheck Fairness Act (H.R. 12, S. 182). Supporters of the bill, which include Committee Chair Tom Harkin, D-Iowa, claim that the law is needed to close the wage gap between men and women.

“This hearing is about reaffirming the basic promise of the Equal Pay Act that every worker should be judged and compensated based on the quality of the work he or she performs and not based on gender,” Harkin said in his opening remarks at the hearing. “It is unacceptable that a woman still makes only 77 cents for every dollar that a man earns. This wage gap exists in every segment of our society.”

The Paycheck Fairness Act would amend the enforcement of the Equal Pay Act and revise the remedies and penalties for violations of the equal pay laws. The legislation would require employers to base employee compensation on bona fide factors such as education, training and experience and would prohibit basing wages on factors such as a person’s gender.

The legislation would bar employers from retaliating against or disciplining workers who discuss or disclose the compensation of co-workers when employees respond to a complaint or charge of pay discrimination. An employer that violates the statute could be liable for compensatory and punitive damages.

Opponents of the proposal claim the legislation is not needed and could further damage a shaky U.S. job market.

“The Paycheck Fairness Act will subject employers to more litigation, including far larger class action suits and increased penalties, even when there is no evidence that an employer intended to discriminate,” said Sen. Mike Enzi, R-Wyo., the ranking minority member of the HELP Committee. “This bill adds more burdensome government reporting requirements that don’t just waste hours of an employer’s time; they also cost money that could be directed toward new hires and creating new jobs.”

Enzi encouraged committee members to vote instead to reauthorize the Workforce Investment Act, claiming that this legislation would improve job opportunities and wages throughout the country.

“We should reauthorize the Workforce Investment Act this Congress to ensure workers have access to the education and skills training they need to be successful, and to ensure employers have the skilled workforce they need to be competitive,” Enzi said. “We must devote time and energy to developing new ways to encourage private-sector job creation.”

More Work for Lawyers?

Jane McFetridge, an attorney from the Chicago office of the law firm Jackson Lewis, agreed with Enzi and told the committee that the Equal Pay Act would increase litigation and serve only to raise the wages of lawyers.

“Rather than ending wage discrimination, the legislation, if passed, would provide a windfall to plaintiffs’ attorneys but result in no meaningful change to extant wage differentials,” McFetridge testified.

She told the committee members that the legislation provided “little guidance” on compliance and said the proposal would further complicate the challenges that employers face when setting compensation, which already includes considering dozens and “sometimes hundreds of factors.”

Several witnesses refuted Enzi’s and McFetridge’s claims that the legislation would generate a flood of class-action suits and increase job opportunities for attorneys. Stuart Ishimaru, the acting chair of the Equal Employment Opportunity Commission (EEOC), testified in support of the legislation. Ishimaru cited an October 2009 report published by the Center for American Progress that shows how sexual discrimination has amplified the persistent pay inequality for women and has had a disparate impact on female workers who have caregiver responsibilities.

“This report and other recent studies confirm what we at the EEOC have recognized for some time, that the gender wage gap exists and persists,” Ishimaru testified.

Ishimaru said statistics showed that during the 13 years ending in September 2009, the EEOC received 30,312 complaints alleging sex-based pay discrimination, or approximately 3 percent of the nearly 1 million charges filed with the agency during that period.

Ishimaru told the committee that he believed that relatively few complaints were filed because information on co-worker pay is hard to get and because employers can retaliate against or discipline workers who share compensation data with colleagues.

“These policies that prevent workers from discussing pay create a serious barrier to charge filing under our equal pay laws,” Ishimaru said.

He told the committee that the proposed legislation would provide the protections and tools to help female workers earn the wages equal to those of their male counterparts.

“We also face broader systemic barriers in the private sector due to inadequate data on wages,” Ishimaru said. “While some data is available in the aggregate, federal agencies have very little in the way of company-specific wage data in the private sector, and this hinders systemic enforcement efforts by the EEOC in the realm of wage discrimination.”

The House of Representatives passed its version of the Paycheck Fairness Act in January 2009 in conjunction with the Lilly Ledbetter Fair Pay Act (P.L. 111-2). When passing the Lilly Ledbetter law, the Senate did not vote on the Paycheck Fairness Act.

Bill Leonard is a senior writer forSHRM.

Related Article:
Five Reasons to Focus on Pay Equity in 2010, SHRM Online Compensation Discipline, March 2010

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