Paycheck Fairness Act: You Decide Is This Necessary?

by Michael Haberman on September 21, 2010 · 6 comments


I and several other bloggers have written about the Paycheck Fairness Act which the Obama Administration is trying to get passed. Primary among this is a post entitled Paycheck Fairness Act Part II. This post points you to a position paper written by Camille Olsen of SayfarthShaw that is one of the best analyses of the case on the Paycheck Fairness Act. This legislation is very alive today. In the Sunday Atlanta Journal Constitution on the OP/ED page there was one of those Should We Pass The Paycheck Fairness Act pieces that had a proponent and an opponent. Of course the proponents argument was that wage discrimination needs to be totally eliminated and this law will do that. The opponents argument was that we have a law, the Equal Pay Act, that already offers that protection, so there is no need for a new law.

Rather than offering my opinion in this post (if you are a constant reader you have read my stand before anyway) I am going to tell you the major provisions of the legislation and I will let you decide whether we need this law or not. And then I would like you to take a minute and express that opinion in the comments section. So here we go.
Major Provisions:

  • Amends the Equal Pay Act amendment to the FLSA, which allowed bona fide pay differentials for factors such as education, training, experience, difference in the quality or quantity of work, a merit system, a seniority system, or geographic differences. Gender differences was not an allowed factor.  States that the bona fide factor defense shall apply only if the employer demonstrates that such factor:
    (1) is not based upon or derived from a sex-based differential in compensation;
    (2) is job-related with respect to the position in question; and
    (3) is consistent with business necessity.
  • The defense is not allowed however,  where the employee demonstrates that:

    (1) an alternative employment practice exists that would serve the same business purpose without producing such differential; and
    (2) the employer has refused to adopt such alternative practice.

  • Prohibits retaliation for inquiring about, discussing, or disclosing the wages of the employee or another employee in response to a complaint or charge.
  • Makes employers who violate sex discrimination prohibitions liable in a civil action for either compensatory or (except for the federal government) punitive damages.
  • Any action brought to enforce the prohibition against sex discrimination may be maintained as a class action in which individuals may be joined as party plaintiffs without their written consent.
  • Requires the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs to train EEOC employees and affected individuals and entities on matters involving wage discrimination.
  • Authorizes the Secretary to make grants to eligible entities for negotiation skills training programs for girls and women. (If everything is going to be equal what has to be negotiated?)
  • Amends the Civil Rights Act of 1964 to require the EEOC to collect from employers pay information data regarding the sex, race, and national origin of employees for use in the enforcement of federal laws prohibiting pay discrimination.

Those are the major provisions. There are some minor ones as well. You can read the whole bill here. To summarize, under this bill:

  • You have to explain the business necessity of all pay differentials
  • You have to defend that business necessity as the only method
  • You can be sued by one employee which then automatically gets you sued by all the women in your workforce (The plantiff attorneys are lobbying big time for this one)
  • You will have keep more records which will then have to be turned over to the Federal govenment so they can then prosecute you
  • Women will be trained to be better negotiators.

OK, maybe my biases came out that summary. But you are big enough to make your own decisions.

So the options are:

  1. YES we need this law. Discrimination is active and needs to be eradicated
  2. NO we have a law in place that provides the protection needed.
  3. Maybe, maybe not I am a fence rider and I don’t want to make waves. (Ok, not a real option.)
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{ 6 comments… read them below or add one }

Cathy Missildine-Martin, SPHR September 21, 2010 at 10:11 am

Mike:

Somehow I feel that the Equal Pay takes care of this issue but without the paper requirements of the new Act. Businesses don't need more paperwork they need to figure out how to remain stable and competitive in this new normal we are in. I heard the other day that women are catching up (86% of men) one reason is because there are more women in the workforce and more women go to college. However, pay data is easy to get these days and like you said women are becoming awesome negotiators. So, I think with all that, we will catch up as that is the way the market is headed with all the shifting demographic data.

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Michael D. Haberman, SPHR September 21, 2010 at 11:34 am

Thanks for the comment Cathy. Yes it will add paperwork. Yes it will add to the cost of defense on any one lawsuit because they will all become class action suits.

Women in HR may be in the odd position of suing themselves. HR is typically named in the lawsuit. But if the plaintiff attorneys can include all women in a lawsuit then the women in HR may be automatically enrolled as a plaintiff and a defendant. May not occur but an interesting scenario.

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Anonymous September 21, 2010 at 2:38 pm

More big government bull s#@$. That's about as nice as I can be

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Gina September 22, 2010 at 10:22 am

The paperwork alone would be a nightmare and a huge burden on already struggling businesses. Not to mention a loss of freedom when businesses are told what they have to pay each worker. Would be very difficult for businesses to thrive in this environment.

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Cathy Missildine-Martin, SPHR September 22, 2010 at 2:02 pm
Michael D. Haberman, SPHR September 22, 2010 at 3:52 pm

Here is another blog post from an attorney, Jon Hyman, about why employers need to be concerned. http://ohioemploymentlaw.blogspot.com/2010/07/do-you-know-what-is-paycheck-fairness.html

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