U.S. House of Representatives Passes Paycheck Fairness Act

​On April 15, the U.S. House of Representatives passed the Paycheck Fairness Act (H.R. 7) by a 217-210 vote. The legislation, if enacted, would require employers to prove that pay disparities between men and women are job-related, among other provisions. 

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. The bill would, among other provisions:

• Require employers to show that pay disparities between men and women are job-related and consistent with business necessity.
• Make it easier for plaintiffs to participate in class-action lawsuits that challenge systemic pay discrimination.
  
• Strengthen the Equal Pay Act of 1963 (EPA) and provide greater remedies for prevailing plaintiffs.
• Prohibit employers from asking job applicants about their salary history or relying on salary history to set compensation. But an employer could use a prospective employee's wage history if the employer makes a job offer and the applicant reveals his or her salary is more than the proposed salary. The employer could then increase the salary offer.
• Prohibit employers from retaliating against workers who discuss their pay with co-workers. The National Labor Relations Act already gives employees the right to discuss their pay.
  

Concerns About Legislation

In a letter to congressional leaders, the Society for Human Resource Management (SHRM) wrote, "Our members, many of which represent small and mid-sized businesses, have concerns that H.R. 7, the Paycheck Fairness Act, would restrict their ability to base pay decisions on the legitimate business practices they currently use to determine compensation, such as professional experience, training, education, skills, and shift differentials."

The letter added, "While we agree that salary history should not be the sole factor in setting compensation, employers should have the ability to discuss salary expectations with prospective employees. Salary expectations help employers establish the value of the position to the organization as well as competitiveness of the market."

"Equitable pay is critical to creating thriving workplaces, which is why SHRM vigorously supports the concept," said Emily M. Dickens, SHRM chief of staff, head of government affairs and corporate secretary. "However, policy proposals that stifle HR professionals' ability to reward employees based on business factors such as education, qualifications, skills and relevant experience do not adequately address the issue. SHRM will continue to work with policymakers to ensure employers have the flexibility to base pay decisions on their unique and legitimate business practices while ensuring everyone is equally compensated based on their work."

Background on Pay Equity

Four federal statutes ban discrimination in pay:

• The EPA.
• Title VII of the Civil Rights Act of 1964.
• The Age Discrimination in Employment Act.
• The Americans with Disabilities Act.

In addition, the Lilly Ledbetter Fair Pay Act extends the statute of limitations for pay discrimination claims, and Executive Order 11246 prohibits pay discrimination by federal contractors.

The EPA was the first piece of modern civil rights legislation. It has a narrow focus, prohibiting pay discrimination based only on gender. The act prohibits employers from paying women less than men for doing the same or substantially the same work at the same facility.

Under the EPA, a claimant need only demonstrate that an employer pays men more than women without proving discriminatory intent. To avoid liability under the EPA, an employer must prove that any disparity is justified by one of the following:

• A seniority system that rewards employees based on length of employment.
• A merit system that rewards employees for exceptional job performance.
• An incentive system that pays employees based on the quality of their work or the amount of work they perform.
  
• Another factor related to job performance or business operations, such as paying a shift differential to workers on less popular shifts.

[SHRM members-only toolkit: Managing Pay Equity]

Democrat Support

On reintroducing the bill, DeLauro said, "We must enact the Paycheck Fairness Act to both close the worsening pay gap and protect and empower women as they re-enter the job force. This legislation is long overdue."

The bill has support from Education and Labor Committee Chairman Rep. Bobby Scott, D-Va. "The gender wage gap is not only discriminatory, it undermines the financial stability of families and slows our economic growth," he said. "Despite current protections, inadequate remedies and limited enforcement tools have allowed gender-based wage discrimination to persist—leaving women, particularly women of color, without the pay they deserve. The Paycheck Fairness Act strengthens enforcement of the Equal Pay Act of 1963, helps to lift families out of poverty and finally aligns the fight against workplace gender discrimination with other federal anti-discrimination laws. This bill is one more step toward finally achieving equal pay for equal work."

Republican Opposition

In her opening statement at the March 24 markup of H.R. 7, House Education and Labor Committee Republican Leader Rep. Virginia Foxx, R-N.C., said, "Democrats claim the Paycheck Fairness Act makes it easier for women to excel in the workplace, but it is a dangerous bill that will allow trial lawyers to fleece business owners around the country."

She added, "Instead of treating pay discrimination allegations with the seriousness they deserve, the so-called Paycheck Fairness Act is designed to make it easier for trial lawyers to bring more suits of questionable validity for the purpose of siphoning off unlimited paydays from settlements and jury awards, lining their own pockets and dragging women through tedious, never-ending legal proceedings."

Foxx said she wasn't criticizing the intentions behind the bill. "But good intentions do not necessarily breed good policymaking," she stated.