|April 27, 2011|
Previously published on April 26, 2011
The Paycheck Fairness Act, calling for increased employer liability for compensation decisions, as well as heightened government involvement in remedying pay inequality, once again has been introduced in Congress. The latest bill, which is identical to the previous proposal, was introduced in both the U.S. Senate (S. 797) and the U.S. House of Representatives (H.R. 1519) on this year’s “Equal Pay Day,” April 12, 2011.
If enacted, the legislation would alter key provisions of the Equal Pay Act of 1963 (“EPA”). The EPA amended the Fair Labor Standards Act to prohibit employers in most instances from paying women less than men for performing the same or “substantially equal” work in the same “establishment.” Among other things, the Paycheck Fairness Act calls for stricter enforcement provisions than those available under the EPA. The legislation would:
Make it more difficult for employers to prevail on the EPA’s “any factor other than sex” defense. Under the proposed legislation, employers would have to demonstrate that any pay differential is based on a “bona fide factor other than sex, such as education, training, or experience” and, among other requirements, is “consistent with business necessity.”
Expose employers to unlimited compensatory and punitive damages. Whereas the EPA provides for equitable relief (such as back pay awards) employers could be faced with unlimited compensatory and punitive damages under the proposed amendments.
Make it easier for plaintiffs tobring class action lawsuits. The Paycheck Fairness Act would allow “opt-out” class actions under Rule 23 of the Federal Rules of Civil Procedure. The EPA, on the other hand, is governed by the Fair Labor Standards Act’s procedural rules, which require plaintiffs to “opt-in” to a class action by giving written consent. The distinction between the two provisions is important as employees need not affirmatively join a case to be included in an opt-out class action.
Expand the definition of “same establishment.” The proposed legislation would define “establishment” to mean “workplaces located in the same county or similar political subdivision of a State.”
Impose additional obligations on the Equal Employment Opportunity Commission and Department of Labor for monitoring and remedying pay inequality. The EEOC would be directed to collect pay information from employers and impose obligations on the Office of Federal Contract Compliance Programs for performing compensation discrimination analyses.
The Paycheck Fairness Act passed in the House in January 2009, but ultimately was defeated in the Senate in November 2010. (For additional details of that bill, see Paycheck Fairness Act Would Negatively Impact Businesses, Jackson Lewis Partner Cautions, Despite Opposition, Obama Administration Will Urge Senate to Pass Paycheck Fairness Act, Senator Reid Re-Introduces Paycheck Fairness Act in Congress, and Paycheck Fairness Act Vote Scheduled for November 17.) Chances of passage in a Republican-controlled House of Representatives this time are considered slim.