Senate Holds Pay Equity Hearing

March 17, 2010

The Senate Health, Education, Labor and Pensions (HELP) Committee held a March 11 hearing on pay equity in an effort to revive the stalled Paycheck Fairness Act (S. 182/H.R. 11).

The legislation, sponsored by then Sen. Hillary Clinton and Rep. Rosa DeLauro (D-Conn.), would amend the Equal Pay Act (EPA) in the following ways:

• Expands compensatory and punitive damages for gender-based pay discrimination.
• Requires employers to show “a bona fide factor other than sex, such as education, training, or experience” to establish defense to an EPA claim. However, the employer will have additional limitations in his defense even after proving the aforementioned.
• Facilitates the filing of class action litigation by forcing class members to “opt out.”
• Prevents employers from retaliating against employees who share salary information with coworkers.
• Requires the Equal Employment Opportunity Commission (EEOC) to issue regulations with respect to the collection of pay information from employers and would require the Office of Federal Contract Compliance Programs to use its “full range of investigatory tools” to dig up evidence of possible compensation discrimination.

The EPA was passed in 1963. It amended the Fair Labor Standards Act to pay discrimination based on gender. While wage gaps have changed significantly since the 1960s, proponents of the Paycheck Fairness Act suggest that the EPA has not fully achieved its purpose.

However, a 2007 Department of Labor study cautioned against aggressive use of the EPA without additional analysis of possible reasons for pay discrepancies: “the raw wage gap continues to be used in misleading ways to advance public policy agendas without fully explaining the reasons behind the gap.”

The Paycheck Fairness Act was passed in the House of Representatives in 2008, but has not been acted on in the Senate. Its proponents cite late year’s passage of the Lilly Ledbetter Fair Pay Act as reason for continued action to address the EPA this year.

Some suggest proponents are urging action to coincide with Equal Pay Day, an event sponsored on April 20 this year by the National Committee on Pay Equity. However, with the health care reform and other issues at the top of the agenda, it is hard to ascertain how much traction the issue will gain.

NSBA will continue to monitor the legislation and work with members of Congress interested in ensuring the legislation does not have a negative impact on small businesses. Check back with NSBA’s Web site for additional details as they are made available.