Friday, March 12, 2010

EEOC Chair’s testimony in favor of Paycheck Fairness Act underscores enhanced detection and enforcement

Stuart J. Ishimaru, Acting Chair of the EEOC, testified before the Senate Health, Education, Labor and Pensions (HELP) Committee in support of the Paycheck Fairness Act (S 182/HR 12), and his remarks underscore the ways in which this legislation, if enacted, would enhance the federal agency’s ability to detect and prosecute wage discrimination. The HELP Committee’s hearing, held March 11, was dubbed “A Fair Share for All: Pay Equity in the New American Workplace.”

What would the new law do? The Paycheck Fairness Act, which has already passed the House, 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. 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.” Its language clarifies that employees would 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.”

The bill would also prohibit employers 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., human resource professionals). Disclosures can be made in response to a complaint or charge or in furtherance of an investigation.

Additionally, the Paycheck Fairness Act would 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.”

Ledbetter Fair Pay Act meant progress to the EEOC. In his prepared remarks, Chair Ishimaru noted that the Lilly Ledbetter Fair Pay Act of 2009, which supersedes the Supreme Court’s decision in Ledbetter v Goodyear Tire & Rubber Co, Inc, was signed into law on January 29, 2009. Under Ledbetter, a compensation discrimination charge was required to be filed within 180 days of a discriminatory pay-setting decision (or 300 days in jurisdictions that have a local or state law prohibiting the same form of compensation bias), which Ishimaru called “an unrealistic expectation given the secrecy that usually surrounds pay decisions.”

The Ledbetter Act restores the EEOC’s pre-Ledbetter position that each paycheck delivering discriminatory compensation is an actionable wrong under federal equal employment opportunity statutes, regardless of when the discrimination began, Ishimaru pointed out. As noted in the Act, the statute recognizes the “reality of wage discrimination” and restores “bedrock principles of American law,” he said.

Increase in sex-based pay bias charges. Chair Ishimaru advised committee members that over the past thirteen years – from fiscal year (FY) 1997 through FY 2009 – the EEOC has received a total of 30,312 charges alleging sex-based pay bias in violation of the EPA and/or Title VII of the Civil Rights Act of 1964. This works out to an average of 2,332 charges per fiscal year (out of an average of 82,022 total charges per fiscal year over the same period), he noted.

Over the last three fiscal years, according to its Chair, the EEOC has experienced a 30-percent increase in gender-based wage bias charges. In FY 2009, the EEOC received 2,252 sex-based pay discrimination charges out of a total of 93,277 charges. Of those, 944 charges specifically alleged EPA violations – roughly one percent of total receipts. Through its administrative enforcement process alone in 2009, the EEOC obtained nearly $19 million in monetary benefits for wage discrimination victims, Ishimaru said.

Overcoming the problem of secrecy. “A number of reasons may account for the relatively small number of wage claims the EEOC receives, but the single biggest challenge the EEOC faces in identifying wage discrimination is the secrecy that surrounds pay information in the workplace,” the EEOC Chair said.

Easier to establish EPA violations. “The Paycheck Fairness Act provides essential tools toward realizing the promise of equal pay, and I look forward to working with the Senate to strengthen and move forward on this important legislation soon,” Ishimaru said in his statement to the HELP Committee. “Passage of this legislation would make it easier to establish violations of the Equal Pay Act, by clarifying the affirmative defense for ‘factors other than sex,’ and refining the ‘establishment’ requirement to comply with commonsense notions of how employers set wages.

Enhanced data collection = enhanced detection. The EEOC Chair said that the Paycheck Fairness Act would enhance his agency’s data collection capabilities, allowing the EEOC “to detect violations of the law and more readily engage in targeted enforcement of equal pay laws.”

Bigger and better remedies. He also noted that the bill “would enhance remedies to allow for compensatory and punitive damages, putting gender-based pay discrimination on a more equal footing with pay discrimination on other bases such as race.” Moreover, the bill would allow class action claims to proceed under the Equal Pay Act and under the Federal Rules of Civil Procedure, he advised.

Employers, you see where this is going . . .

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