Governmental Affairs - News & Articles
ALL’S FAIR IN LOVE AND WAR BUT NOT PAYCHECKS
The Paycheck Fairness Act S3772 HR 12
Before the end of the year, Congress is likely to vote on a bill that addresses an issue that has been discussed for years but has seen little action: equal pay. Bureau of Labor Statistics (BLS) data from the second quarter of 2010 demonstrates that women still fall short in wages, earning 82.8% of the median weekly wage of men. Although this amount is up from 76.1% for the same period a decade ago and is the highest ever recorded, women still lag behind men in pay for the same or similar jobs. Some of the gain can be attributed to the fact that men have been losing jobs at a faster rate than women in the recession because of layoffs and closings in manufacturing, construction and other industries, which are traditionally dominated by males. At the same time, women have been moving into high-paying professional jobs such as accountants, lawyers and physicians while men have been taking relatively low-paying jobs—bank tellers, switchboard operators, librarian, which have long been dominated by women; again, most likely due to the effects of the recession. Black and Latina women have an even greater pay disparity—62 and 53 cents respectively.
The Paycheck Fairness Act, introduced on September 13, 2010 by Senator Harry Reid and endorsed by President Obama and women’s rights groups, would make it easier for women to file class-action, punitive-damages suits against employers they accuse of sex-based pay discrimination. If the bill is passed, employers must have one pay rate for a job, not only at the entry level, but throughout the organization. Employers will face challenges and have less discretion in considering different salary histories for new hires, different salary demands from existing employees, and the size of pay raises for employees promoted into new roles.
For example, City Hospital needs to hire nurses at an annual salary of $40,000. Melanie and Jason both have 3 years of experience and apply for the jobs. The hospital offers both of them employment at the $40,000 salary. Melanie accepts the job offer; however, Jason tells the hospital that he wants to be paid $42,000. Under current law, if the hospital agreed to pay Jason $2,000 more than Melanie there would be no problem because the law says that an employer is not liable if it paid Jason and Melanie differently for “a reason other than sex.” There also would be no problem if the hospital decided to pay each new hire $2,000 more than they made in their previous employment, and Jason made more than Sally in their previous jobs.
This bill would eliminate the “reason other than sex defense and would allow unlimited compensatory and punitive damages under the Equal Pay Act. The bill would require that the employer prove that: (1) its pay practices are separated from any discrimination in its workplace or at the employee’s prior workplace, (2) the practice is job related and (3) the pay practice is consistent with “business necessity.” The legislation would also:
- Prohibit retaliation against workers who inquire about their employers’ wage practices or disclose their own wages;
- Permit reasonable comparisons between employees within clearly defined geographical areas to determine fair wages;
- Strengthen penalties for equal pay violations;
- Direct the Department of Labor to assist employers and collect wage-related data; and
- Authorize additional training for Equal Employment Opportunity Commission staff to better identify and handle wage disputes.
While striving to level the playing field in terms of equal compensation, the law would make these changes without real evidence that these steps will eliminate pay disparities between men and women and without any thought on the impact of restricting a company’s ability to respond to the different needs and demands of its employees. In addition, courts may second guess legitimate pay practices and impose compensation plans on employers.
The House version of this legislation, HR 12, passed the House in 2009 by a vote of 256 to 63. Based on the wide-spread support this bill has received, including from President Obama, who has called it “a common-sense bill,” it is likely that this legislation will pass.
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Thomas P. Krukowski
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