Wednesday, February 3, 2010

Will Ledbetter Act’s anniversary breathe new life into the Paycheck Fairness Act?

Last Friday marked the one-year anniversary of the Lilly Ledbetter Fair Pay Act (P.L. 111-2), the first major legislation President Obama signed into law, and the first dealing with labor and employment law. For a year, though, its companion legislation, the Paycheck Fairness Act (H.R. 12/S. 182), which already passed the House, has remained stalled in the Senate…until now.

At a press conference celebrating the one-year anniversary of the Ledbetter Act, Senator Chris Dodd (D-CT) announced that the Senate Health, Education, Labor and Pensions Committee will hold hearings on the Paycheck Fairness Act in the next four to six weeks. During the State of the Union, Obama confirmed the Administration’s continued support for the Paycheck Fairness Act, giving a nod to the bill in his speech. “We are going to crack down on violations of equal pay laws – so that women get equal pay for an equal day’s work,” he said. Among those in opposition to the bill are various business groups, including the US Chamber of Commerce.

So what is the Paycheck Fairness Act?

Provisions. The Paycheck Fairness Act, which passed the House last January in a 256-163 vote, would allow prevailing plaintiffs to recover compensatory and punitive damages under the Equal Pay Act (EPA), which currently provides only for liquidated damages (fixed and limited) and back pay awards. To recover punitive damages, however, a plaintiff must show intent (i.e., malice or reckless indifference). In addition, the bill would allow EPA lawsuits to proceed as class actions, as governed by the Federal Rules of Civil Procedure. The bill also would modify the EPA’s requirement that men and women receive equal pay for equal work in the “same establishment.” It clarifies that employees will be deemed to work in the “same establishment” if they work for the same employer at workplaces located in the “same county or similar political subdivision of a state.”

Employers would be prohibited from retaliating against employees who have “inquired about, discussed or disclosed the wages of the employee or another employee.” But the retaliation provision does not apply to instances where an employee who has “access to the wage information of other employees as a part of that employee’s essential job functions” discloses those wages to individuals who do not otherwise have access to such information (i.e., HR professionals). Disclosures can be made in response to a complaint or charge or in furtherance of an investigation.

The bill would also clarify when employers may assert as an affirmative defense that a pay differential (unequal pay for equal work) is based on “factors other than sex.” Employers asserting the affirmative defense must prove those factors are “job-related” and “consistent with business necessity.”

If enacted, the bill would also mandate that the Equal Employment Opportunity Commission (EEOC) and Department of Labor’s (DOL) Office of Federal Contract Compliance Programs train employees and other affected individuals on matters involving wage discrimination. Within 18 months of the bill’s enactment, the EEOC would be required to complete a survey about pay information and to issue regulations providing for the collection of pay information data from employers as described by the sex, race and national origin of employees. In addition, the bill would require the DOL to make competitive grants available that would help provide “effective negotiation skills training” for girls and women (and the bill expressly prohibits grant programs created by the EPA from being used for Congressional earmarks). Further, nothing in the Paycheck Fairness Act would affect the obligation of employers and employees to fully comply with all the nation’s immigration laws.

The Paycheck Fairness Act, which has 37 cosponsors, would take effect six months after the date it is enacted.

What we do know. Data released from the US Bureau of Labor Statistics confirms that the gender wage gap is increasing, reports the Institute for Women’s Policy Research. The ratio of women’s median annual earnings in 2008 was 77.1 cents for full-time, year-round workers for each dollar earned by their male counterparts, down from 77.8 cents in 2007. (This means the gender wage gap is now 22.9 percent). Women’s real (inflation-adjusted) annual earnings fell 2.0 percent from 2007 to 2008, to $35,745, while men’s fell 1.0 percent, to $46,367. This has not gone unnoticed by the Obama Administration, which announced in conjunction with the State of the Union that it would implement both an equal pay initiative to improve compliance, public education and enforcement of equal pay laws and a National Equal Pay Enforcement Task Force to ensure that the agencies with responsibility for equal pay enforcement are coordinating efforts and limiting potential gaps in enforcement.

Stay tuned.

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