Should it be easier for employees to sue for gender-based wage discrimination unless differences relate to education, training, or experience?
Should the Paycheck Fairness Act (H.R. 7) be enacted into law?
By Lorelei Yang, Countable News
What's the story?
The Paycheck Fairness Act (H.R. 7) would revise existing enforcement mechanisms to prevent wage discrimination based on gender. Exceptions in laws that prohibit wage differences between men and women would be limited to bona fide factors — like education, training, or experience.
Defenses based on bona fide factors could only apply if the employer demonstrates that the factor in question:
- Is not based upon a gender-based differential for compensation;
- Is job-related with respect to the position in question;
- Is consistent with the needs of the business;
- Accounts for the difference in compensation.
This defense wouldn't apply when the employee can demonstrate that an alternative employment practice exists that serves the same business purpose without leading to a pay difference and their employer refused to adopt that practice.
The prohibition against employer retaliation for complaints by employees would be revised to bar retaliation for inquiring about, discussing, or disclosing the wages of an employee in response to:
- A complaint or accusation of gender discrimination;
- An investigation, proceeding, hearing or other action;
- An investigation conducted by the employer.
It would be illegal to require employees to sign a contract or waiver preventing them from disclosing information about their wages. Businesses would be prohibited from requesting wage and benefit histories from prospective employees or their employer, and companies couldn't use a prospective employee's wage history to determine their compensation unless it's provided voluntarily after an employment offer has been extended to support a higher wage than offered.
Employers who violate gender discrimination rules would be liable for civil compensatory or punitive damages — although the federal government would be exempt from paying the punitive fines.
The Dept. of Labor would be authorized to seek additional compensatory or punitive damages in a gender discrimination action. All such actions could be pursued as class action suits without the written consent of individual plaintiffs.
The Equal Employment Opportunity Commission (EEOC) and the Office of Compliance Programs would train EEOC employees, affected individuals and entities about wage discrimination. EEOC would issue regulations related to collecting compensation data from employers to analyze data regarding the gender, race and national origin of employees for use in the enforcement of federal laws prohibiting pay discrimination.
What's the argument for it?
Proponents of equal pay for equal work laws argue that women are often paid significantly less than their male peers in the same roles. To these observers, there's a clear need for the federal government to crack down on employers that pay women less and to make it easier for employees to sue employers after alleging gender-based wage discrimination.
Sponsoring Rep. Rosa DeLauro (D-CT) reintroduced this legislation from the 115th and 116th Congresses to help close the wage gap between women and men who work the same jobs:
“The concept is simple: men and women in the same job deserve the same pay,” said Chairwoman DeLauro. “Job loss resulting from the coronavirus pandemic has disproportionately impacted women, with women accounting for 100% of jobs lost in December. We must enact the Paycheck Fairness Act to both close the worsening pay gap and protect and empower women as they reenter the job force. This legislation is long overdue, but this is the Congress that it will finally be signed into law.”
Lily Ledbetter — the plaintiff in the employment discrimination case Ledbetter v. Goodyear Tire & Rubber Co. and a women's equality activist, public speaker, and author who's the namesake of the Lily Ledbetter Fair Pay Act of 2009 — expressed her support for this bill:
"Twelve years ago, Congress and President Obama achieved an important victory for women seeking to challenge pay discrimination in court with the Lilly Ledbetter Fair Pay Act,” said Lilly Ledbetter. “But equal pay is by no means just a women’s issue—it’s a family issue. The Paycheck Fairness Act to ensure they get equal pay for equal work is needed to make the economy work for all families. I applaud Congresswoman DeLauro for her leadership in this fight since 1997, as well as Speaker Pelosi for being a tireless advocate. Now is the time to get Paycheck Fairness passed and signed!”
The Biden administration has included this legislation among its gender equality priorities.
The Center for American Progress (CAP) supports this bill. When this bill was introduced in the previous session of Congress, Jocelyn Frye, senior fellow at CAP's Women's Initiative, said:
"The Paycheck Fairness Act represents a critical step forward in the fight for equal pay, and its passage is long overdue. Ensuring women are paid fairly for their work is essential to upholding our national commitment to equality and is inextricably linked with working families’ economic security. Nearly two-thirds of women serve as their family’s sole, primary, or co-breadwinner, which is why the strength of America’s economy rests on women. Yet, women continue to face persistent pay disparities in the workplace. The Paycheck Fairness Act would tackle this problem head on by improving worker protections to limit pay secrecy, promoting employer accountability, and strengthening the investigatory tools that enforcement agencies can use to uncover pay disparities... The failure to effectively combat pay discrimination puts women and the families they support at an economic disadvantage, and what may seem like pennies an hour translates into hundreds of thousands of dollars over a lifetime—and hundreds of billions of dollars to our economy as a whole. Women of color, who experience the sharpest pay disparities, are particularly hard-hit."
What's the argument against it?
Opponents of equal pay laws contend that many factors, including education, experience, and training, might lead to one employee making more money than another. Consequently, they argue, wage disparities are often the result of differences in people's abilities, not gender discrimination. Equal pay opponents therefore argue that equal pay laws would handicap employers' abilities to pay people based on their experiences and education, to the detriment of businesses.
Republicans — who generally oppose this bill — say it's unnecessary because pay discrimination based on gender is already illegal under the Equal Pay Act, which provides employees with a legal mechanism to claim pay discrimination and seek redress. They also contend that this bill's regulations would serve to discourage companies from hiring women, thereby hurting women in the workforce rather than helping them. In the bill's committee report in the 116th Congress, GOP members summed up their opposition:
"Simply put, H.R. 7 does little to protect the wages and paychecks of American workers and does far more to line the pockets of the plaintiffs' trial-lawyer bar. First, the bill dramatically limits and likely eliminates the ability of business owners to defend claims of discrimination based on pay differences that arise from lawful and legitimate purposes, while radically expanding liability and damages under the [Equal Pay Act]. The bill also obstructs the recruitment and hiring process by restricting use of information related to a prospective employee's current compensation. Further, the bill requires a burdensome, intrusive, and unnecessary government collection of questionable utility of worker pay data. The data is broken down by race, sex, and national origin, and raises significant confidentiality and privacy concerns."
The U.S. Chamber of Commerce opposes this legislation, as it argues that it would “undermine efforts to combat pay discrimination by conflating discriminatory practices with other non-discriminatory factors that result in legitimate pay disparities.” In a February 24, 2021 letter, the Chamber wrote:
“Factors such as experience, education, location, and shift work can and often do result in pay differentials between employees employed by the same business in similar positions. Current law recognizes that these are legitimate, non-discriminatory distinctions. H.R. 7 would impose a new multi-factor test that includes a vague ‘business necessity’ test that would effectively eliminate the ability of an employer to make compensation decisions based on such factors. As a result, employees will not be compensated based on the attributes they bring to the job and their actual contributions to their employer.”
What does the data show?
“This study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices made by both male and female workers.”
Claims that women make 77 cents for every dollar earned by men have been enthusiastically embraced by some and brushed aside as a statistical myth by others in pursuit of their respective policy goals. A deeper examination of the issue done by the American Association of University Women put the figure closer to 91 cents for every dollar men earn. Another analysis in Slate highlighted observations that such figures are an oversimplification of a complex issue, which discount personal choices made by male and female workers.
In January 2019, the National Partnership for Women & Families contended:
"Today, women who work full time, year-round are paid, on average, only 80 cents for every dollar paid to men, resulting in a gap of $10,169 each year. The gap exists in every state, regardless of geography, occupation, education or work patterns. And it is worse for women of color: On average, Latinas are typically paid 53 cents, Native American women 58 cents and Black women just 61 cents for every dollar paid to white, non-Hispanic men. White, non- Hispanic women are paid 77 cents and Asian women 85 cents for every dollar paid to white, non- Hispanic men, although some ethnic subgroups of Asian women fare much worse."
In 2020, U.S. women earned 81 cents per dollar earned by men. This gap widened for women of color, who earned 75 cents per dollar earned by white men.
Sound off in the comments: do you believe that there's a pay disparity between men and women? Do you support the enactment of a federal law to address this issue?
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