Congress Considers Nationwide Ban on Salary-History Questions

Bill would provide more remedies for sex-based pay discrimination

Lisa Nagele-Piazza, J.D., SHRM-SCP By Lisa Nagele-Piazza, J.D., SHRM-SCP February 15, 2019

The proposed Paycheck Fairness Act would prohibit employers nationwide from asking job applicants about their salary history and require employers to prove that pay disparities between men and women are job-related.

Rep. Rosa DeLauro, D-Conn., introduced the bill in January. It has been reintroduced many times since 1997 but has failed to pass both chambers of Congress.

Equal pay for equal work, regardless of sex, is a fundamental concept that has been a part of our law for more than half a century, but women still face barriers to equal pay, said Rep. Suzanne Bonamici, D-Ore., during a joint hearing of two U.S. House of Representatives Education and Labor subcommittees on Feb. 13.

It's difficult to prove pay discrimination, especially when businesses keep information about wages and raises a secret, she said. She also said it is time to disrupt the national cycle of discriminatory pay practices that keep some women in poverty.

While agreeing with the concept, Rep. Bradley Byrne, R-Ala., said that the proposed legislation is the wrong approach. "Women deserve equal pay for equal work," he said. The Paycheck Fairness Act, however, offers no new protections against pay discrimination and imposes an inflexible mandate on employers that strictly limits their communications with employees during the hiring process, he added.

Byrne said the bill is not designed to protect women. Rather, it would be a "cash cow" for plaintiffs' attorneys by making it easier to sue employers, and it would result in long legal battles for the women who bring claims.

Supporters Aim to Strengthen the EPA

"Despite the enactment of the Equal Pay Act of 1963 [EPA], many women continue to earn significantly lower pay than men for equal work," according to the bill. "In many instances, the pay disparities can only be due to continued intentional discrimination or the lingering effects of past discrimination." The proposed legislation would strengthen the Equal Pay Act by:

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

Congress is way overdue on bringing the EPA up-to-date, said Rep. Eleanor Holmes Norton, D-D.C., a former chair of the Equal Employment Opportunity Commission. She said that asking job applicants to disclose their salary history has a discriminatory effect on women and minorities who often start out with lower wages than their white male colleagues and that the discriminatory effect compounds from job to job.

DeLauro said Congress needs to recognize that, for women, pay inequities carry into retirement when their pension and other benefits are calculated.

Critics Address Shortcomings

Rep. James Comer, R-Ky., said women deserve equal pay for equal work, but the Paycheck Fairness Act has too many shortcomings and doesn't help the people it sets out to protect.

Camille Olson, an attorney with Seyfarth Shaw in Chicago, said she regularly works with employers to ensure that any pay discrepancies are job-related, and she has several concerns about the effect of the proposed legislation on employers.

Many employers rely on information about job applicants' current pay because it provides valuable information about applicants' experience and performance. She also noted that employees rarely leave their jobs for less compensation.

[SHRM members-only toolkit: Managing Pay Equity]

Furthermore, the bill would expand the damages available to plaintiffs beyond the significant penalties that are already offered and raise the burden of proof for employers that are defending claims, she said.

Currently, under the EPA, employers can justify pay discrepancies by showing that they are based on "factors other than sex." The bill would narrow this defense by requiring employers to prove that the factor:

  • Is not because of a sex-based differential in compensation.
  • Is job-related and consistent with business necessity.
  • Accounts for the entire differential in compensation.

"Even if the employer is able to meet such a heightened standard, H.R. 7 [the Paycheck Fairness Act] would still permit an employee to prevail by pointing to an alternative practice that the employer did not adopt," Olson said in her testimony.

She added that the burden on employers would be so high, any plaintiff bringing an EPA claim could prevail "by simply showing a wage differential for employees doing the same work," unless the employer shows that the differential was based on one of the following:

  • A seniority system.
  • A merit system.
  • A system that measures earnings by quantity or quality of production.

"Taken as a whole, H.R. 7 is unworkable as a practical and legal matter in today's workplaces," she said. However, she noted that there are still opportunities to enhance the EPA's protections, such as by requiring that pay discrepancies be based on job-related factors, protecting employees from retaliation when they discuss wages to find out if disparities exist, and providing employers with incentives to voluntarily evaluate their pay practices and remedy any disparities without the need for litigation. 



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