seyfarth.jpgAuthored by Rachel M. Hoffer

We’ve all heard the oft-cited statistic that women in the U.S. earn 77 cents for every dollar paid their male counterparts, despite the passage of laws targeted to remedy this disparity.  For the third time in four years, Congressional Democrats have introduced a bill intended to give the Equal Pay Act of 1963 sharper teeth.  Known as the Paycheck Fairness Act, the bill asserts that, “In many instances, the pay disparities can only be due to continued intentional discrimination or the lingering effects of past discrimination”—this, nearly half a century after the passage of Title VII of the Civil Rights Act of 1964.

How would the Paycheck Fairness Act eradicate pay discrimination when its predecessors, according to the bill’s proponents, have not?  If passed, the current version would amend the Equal Pay Act, itself an amendment of the Fair Labor Standards Act, in several ways designed to influence employer behavior.

  • The Paycheck Fairness Act would place a heftier burden on employers defending an Equal Pay Act claim.  Under current law, once a plaintiff establishes a prima facie case of sex-based pay discrimination, the burden then shifts to the employer to show that the pay difference is due to a seniority system, a merit system, a system that bases earnings on quantity or quality of production, or “any other factor other than sex.”  The Paycheck Fairness Act would replace “any other factor other than sex” with “a bona fide factor other than sex, such as education, training, or experience,” and would require employers to establish that the factor is job-related, necessary for business, and “not based upon or derived from a sex-based differential in compensation.”  In addition, the plaintiff could defeat the “bona fide factor” defense by demonstrating that an alternative practice would achieve the same business purpose without resulting in a disparity.
  • The Paycheck Fairness Act would broaden the FLSA’s anti-retaliation provisions to protect employees who participate in or initiate FLSA-related investigations, including employer-conducted investigations, or who ask about or discuss the wages of another employee. 
  • The Paycheck Fairness Act would allow prevailing plaintiffs to recover compensatory damages for an Equal Pay Act violation—and punitive damages, if they demonstrate that the employer acted with malice or reckless indifference.
  • The Paycheck Fairness Act would permit plaintiffs to pursue a Rule 23 class action.  In other words, class members would be included unless they affirmatively opted out of the action—a departure from the FLSA’s familiar collective action procedure, in which individuals must affirmatively opt into the action.
  • The Equal Employment Opportunity Commission would collect employee pay data for use in enforcing federal anti-discrimination laws.  This data will reflect not only sex but also race and national origin information.
  • Finally, the bill promises one carrot amid the sticks of heightened burdens, punitive damages, and class actions:  The Secretary of Labor would recognize employers that have taken great strides to eliminate pay disparities between the sexes, including bestowing a National Award for Pay Equity in the Workplace.

Again, versions of this bill have failed twice, and it seems unlikely that the third time will be the charm.  But pay disparity issues are clearly on the agenda for Congressional Democrats and President Obama, who endorsed a previous version of the bill.  And the EEOC has identified enforcing equal pay laws as one of the six national priorities of its Strategic Enforcement Plan, adopted in December 2012.  Regardless of whether the Paycheck Fairness Act becomes law, prudent employers should start looking at pay disparities now.