House OK’s Pay Equity Bill; Outlook Dim in the Senate

Recently, the U.S. House of Representatives passed the Paycheck Fairness Act (H.R. 7), which now heads to the Senate where the outlook is dim. The pay equity bill was first introduced in 2009 and again in 2011; it passed the House both times but the Senate failed twice to bring it to a vote.

In 1963, Congress amended the Fair Labor Standard Act to make it unlawful for employers to pay men and women doing the same or similar work differently unless the employer could show that the pay differential was based on “any other factor other than sex.” This legislation became known as the Equal Pay Act.

The Paycheck Fairness Act (PFA) would amend the Equal Pay Act to strike “any other factor other than sex” and replace it with “a bona fide factor other than sex, such as education, training, or experience.” In addition, the PFA would prohibit employers from: 

  • Setting compensation based on a job applicant’s salary history.
  • Asking job applicants about their salary history.
  • Retaliating against employees who discuss their salary with co-workers.

To increase transparency, employers would also be required to share pay data with the Equal Employment Opportunity Commission (EEOC), which would monitor potential discriminatory practices.

The PFA also directs the Department of Labor to:

  1. Establish and carry out a grant program for negotiation skills training for girls and women; 
  2. Conduct studies to eliminate pay disparities between men and women; and 
  3. Make available information on wage discrimination to assist the public in understanding and addressing such discrimination.

According to the U.S. Bureau of Labor Statistics, women who work full time in the U.S. made, on average, 82 cents for every dollar their male counterparts made in 2020.

The legislation is opposed by several business groups, including the U.S. Chamber of Commerce, which issued a letter stating that it opposed the PFA “because it would undermine efforts to combat pay discrimination by conflating discriminatory practices with other non-discriminatory factors that result in legitimate pay disparities.”

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 678-439-6236.

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