Summary and Background
Today, women make up half of the workforce yet earn only 77 cents for every dollar paid to men. This wage disparity places all women at a significant economic disadvantage and harms American families. The pay gap exists across all education levels and is exacerbated by race and ethnicity. There is no state in which women have gained economic parity with men. For American families touched by the Recession, the burden of wage discrimination weighs heavily because women’s economic contributions are even more important to maintain economic stability.
The Paycheck Fairness Act, S.3772, reflects a commitment to promote equal pay for women by giving women the legal tools to effectively close the wage gap and fight pay discrimination. The legislation would update and strengthen the Equal Pay Act of 1963, which provides protection to women who have been discriminated against in the workplace by making it illegal for employers to pay unequal wages to men and women performing equal work. The Paycheck Fairness Act would improve the protections in the Equal Pay Act by providing more effective remedies to women currently available in other types of employment discrimination cases.
The Paycheck Fairness Act would:
· Provide women additional legal safeguards, including compensatory or punitive damages;
· Clarify appropriate reasons for differences in pay by requiring employers to have a legitimate business reason for paying women less than their male counterparts;
· Prohibit employers from retaliating against employees who share information about their salary with co-workers; and
· Establish a negotiation skills training program for girls and women.
The legislation would build on protections in the Lilly Ledbetter Act passed by the Senate in 2009 and signed into law by President Obama (P.L. 111-2). The Lilly Ledbetter Act restored the ability of women and others to access the legal system when they are victims of pay discrimination on the basis of sex, race, religion, age, or disability. If passed, the Paycheck Fairness Act would help women achieve greater pay equity in the workplace by providing strengthened remedies for instances of pay discrimination.
Enhanced Enforcement of Equal Pay Requirements
The legislation would close loopholes in the Equal Pay Act by revising remedies for and enforcement of prohibitions against sex discrimination in the payment of wages. Specifically, women would be able to sue for compensatory and punitive damages like plaintiffs in other wage discrimination cases. The legislation would extend class action protections to women.
The measure would clarify appropriate defenses to a sex discrimination case. Employers would be required to identify a business-related reason for maintaining a pay disparity among employees performing equal work. The employer would also need to show that they could not accomplish their business need by less discriminatory alternate means.
The Act permits salary comparisons to be made between employees in offices in the same county or similar political subdivision of a state.
The legislation prohibits employers from retaliating against employees who share information about their wages. This protection will allow women to determine whether their salary is fair and promote transparency.
Collection of Pay Information
The legislation would require the Equal Employment Opportunity Commission to collect employee pay information to effectively enforce laws prohibiting pay discrimination. The Department of Labor would continue to collect information on women in the workforce and use this information to provide the public with information on wage discrimination.
The legislation would permit the Department of Labor to establish a negotiation skills training program for girls and women. The grants would be available to organizations and government agencies to sponsor negotiation skills programs. These programs would aim to help girls and women obtain higher salaries equal to those of their male counterparts through enhanced negotiation skills.
The Department of Labor would also be required to conduct studies and provide information to the public about ways to eliminate pay disparities between men and women. The legislation would require the Department of Labor to convene a national summit to discuss wage disparity.
The Act would require the Department of Labor to educate small businesses about the law and provide assistance to ensure compliance.
Senator Reid introduced S.3772, the Paycheck Fairness Act, on September 13, 2010. The Paycheck Fairness Act has 33 cosponsors. The House of Representatives passed similar legislation, H.R.12, in January 2009 with a vote of 256 – 163.
The DPC will circulate information about possible amendments as it becomes available.
On November 16, 2010, the Administration issued its Statement of Administration Policy on the Paycheck Fairness Act:
“The Administration strongly supports Senate passage of S.3772, the Paycheck Fairness Act. The persistent gap between men’s and women’s wages demonstrates the need for legislative change. This bill would address this gap by enhancing enforcement of equal pay laws. Specifically, it would prohibit retaliation against employees who ask about or discuss wage information, and it would provide more effective remedies for women subjected to discriminatory pay practices. S.3772 would strengthen the Equal Pay Act by closing judicially created loopholes in the law and bringing its class action rules into conformity with the Federal Rules of Civil Procedure. S.3772 also requires the Equal Employment Opportunity Commission to collect pay data to better enforce laws prohibiting pay discrimination.”
Democratic Policy Committee, “Pay Equity Would Boost the Economic Security of American Families,” available here.
Congressional Research Service, “Pay Equity Legislation,” available here.