April 16, 2021
Rejecting the potential for a bipartisan approach, the House passed the Paycheck Fairness Act (H.R. 7), a gender pay equity bill that looks exclusively to increased litigation to address gender pay disparities. An alternative approach that would incentivize employers to self-correct those disparities was voted down.
The Act passed the House by a vote of 217-210 largely along party lines. Only one Republican voted for the measure, while no Democrats voted against. Absent a change to the filibuster rule, it is unlikely that the bill in its current form would garner the necessary 10 Republican votes for passage in the Senate.
The Association submitted a letter to Congress outlining its concerns with the Paycheck Fairness Act and advocating for Rep. Stefanik's alternative solution.
The PFA would restrict employer defenses to gender pay discrimination lawsuits to such a degree as to make it nearly impossible to defend even lawful, widely accepted pay practices. The Act would also prohibit salary history inquiries and employer limits on employee discussions of wages, as well as mandate enhanced penalties for employer violations of the Equal Pay Act. Finally, the bill would increase class action litigation and create new pay, hiring, promotion and termination data reporting obligations for employers. For a comprehensive, in-depth breakdown of the bill, click here.
Bipartisan agreement on the goals: As noted by House Education and Labor Ranking Member Virginia Foxx (R-NC): “Republicans and Democrats both agree that pay discrimination is repugnant and illegal. I’ll say it again and again—it’s repugnant and illegal. Despite misguided claims from the other side, this underlying principle is not up for debate.”
Stefanik substitute: Rep. Elise Stefanik (R-NY) offered a less litigious alternative—the Wage Equity Act (H.R. 2491)—as a substitute measure, incentivizing employers to take real steps towards eliminating the wage gap by providing a safe harbor against litigation for those employers that conduct internal audits of their pay practices and make reasonable progress towards eliminating unlawful differentials revealed by such audits. The amendment was rejected by a vote of 244-183. “The Wage Equity Act is a practical, 21st century solution to achieve equal pay for equal work once and for all by empowering businesses and employees to work together in pursuit of this common goal,” said Rep. Stefanik.
Outlook: Large companies generally agree the solution to racial and gender pay disparities lies in increased representation in higher-paying jobs. In the meantime, most of them are taking steps to address unacceptable disparities within similar positions. Rather than expose them to litigation, these steps should be incentivized by liability protections for good faith efforts, as has been done in Massachusetts, Oregon, and Colorado. The fate of the Paycheck Fairness Act in the current Congress will likely be tied to the ability of members of Congress on both sides of the aisle to find a consensus that recognizes the commitment of most employers to eliminating the wage gap.