Paycheck Fairness Act
||The neutrality of this article is disputed. (June 2012)|
The Paycheck Fairness Act is proposed legislation that would add procedural protections to the Equal Pay Act of 1963 and the Fair Labor Standards Act as part of an effort to address male–female income disparity in the United States. A Census Bureau report published in 2008 stated that women's median annual earnings were 77.5% of men's earnings, newer studies suggest, when the data is controlled for certain variables, the residual gap is around 7%, the same study concludes that the residual is due to the fact that "hours of work in many occupations are worth more when given at particular moments and when the hours are more continuous. That is, in many occupations earnings have a nonlinear relationship with respect to hours."
Proponents of the Paycheck Fairness Act consider it an extension of the laws established by the Equal Pay Act of 1963, which makes it illegal for employers to pay unequal wages to men and women who perform substantially equal work. In order to find an employer in violation of the Equal Pay Act, a plaintiff must prove that "(1) the employer pays different wages to employees of the opposite sex; (2) the employees perform equal work on jobs requiring equal skill, effort, and responsibility; and (3) the jobs are performed under similar working conditions." Even if the individual makes each of these showings, the defendant employer may avoid liability by proving that the wage disparity is justified by one of four affirmative defenses—that is, that the employer has set the challenged wages pursuant to "(1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) a differential based on any other factor other than sex."
According to U.S. News & World Report, the Paycheck Fairness Act is meant to close what some see as a pay gap by:
- "making wages more transparent";
- "requiring that employers prove that wage discrepancies are tied to legitimate business qualifications and not gender";
- and "prohibiting companies from taking retaliatory action against employees who raise concerns about gender-based wage discrimination."
The House of Representatives approved the bill in January 2009. The United States Senate failed to move the bill forward in November 2010. President Barack Obama said in March 2011 that he will continue to fight for the goals in the Paycheck Fairness Act. The bill was reintroduced in both houses of Congress in April 2011.
The 2010 bill had no Republican Party co-sponsors, though a group of four Republican senators had supported an earlier bill to address gender-based wage discrimination, including Susan Collins, Kay Bailey Hutchison, Lisa Murkowski, and Olympia Snowe.
On June 5, 2012, the bill fell short of the 60 votes necessary to override a filibuster and did not make it to the Senate floor for debate. The vote went along party lines, excluding a vote against by Democrat Harry Reid. (Senator Reid changes his vote as a procedural maneuver, which left Democrats the option to call up the bill again at a later time.)
On April 9, 2014, in another straight-party-line vote, the Paycheck Fairness Act (S. 2199; 113th Congress) was again blocked by a Republican filibuster in the U.S. Senate. Once again, Senator Reid changed his vote from support to oppose, as a tactical maneuver to keep the bill alive.
The 2010 Senate version of the bill had the support of the Obama administration and that of Democrats in the Senate. The American Civil Liberties Union supported S.182, citing the 2008 data from the United States Census Bureau that women's median annual earnings were 77.5% of the male median, African-American women's median annual earnings were 64% of the white male median, and Hispanic women's median annual earnings were 54% of the white male median. The American Association of University Women also supported the bill, citing the organization's 2007 research report, Behind the Pay Gap, which showed that women earn less than their male colleagues just one year out of college. The pay gap has widened 10 years after graduation.
The National Women's Law Center makes the following case for the Paycheck Fairness Act:
- Like Title VII, the Paycheck Fairness Act will direct courts to scrutinize seemingly neutral pay practices to determine whether they actually serve a legitimate business purpose and whether there are comparable alternatives that will not result in gender-based pay disparities.
- First, the Act requires that the “factor other than sex” defense be based on a bona fide factor, such as education, training, or experience, that is not based upon or derived from a sex-based differential.
- Second, the “factor other than sex” must be job-related to the position in question.
- Third, the “factor other than sex” must be consistent with business necessity.
- In addition, the defense will not apply if the employee can demonstrate that an alternative employment practice exists that would serve the same business purpose without producing a pay differential and the employer has refused to adopt the alternative.
- Requiring employers to justify any decision not to pay workers equal wages for doing substantially equal work is reasonable in light of the Equal Pay Act’s goal to uncover discrimination and the unspecific nature of the “factor other than sex” defense. Moreover, the Paycheck Fairness Act does not alter the safeguards embedded in the Equal Pay Act that ensure that employers have appropriate discretion in setting compensation in nondiscriminatory ways. For example:
- The Paycheck Fairness Act, like the Equal Pay Act, still requires employees to meet an exceptionally high burden before an employer need even offer an affirmative defense. An Equal Pay Act plaintiff must identify a comparable male employee who makes more money for performing equal work, requiring equal skill, effort, and responsibility under similar working conditions. The Paycheck Fairness Act does not alter the other three of the four affirmative defenses available to employers. Thus, employers may still pay different wages to male and female employees performing equal work if the pay decision is based on merit, seniority, or quantity or quality of production. The Paycheck Fairness Act allows employers to raise the business necessity defense, which is a concept imported from Title VII and familiar to employers and courts.
- Some courts have interpreted the “factor other than sex” defense under the Equal Pay Act to require only that an employer articulate some ostensibly nondiscriminatory basis for its decision-making, even if the employer’s rationale is ultimately a proxy for sex-based pay disparities. As one court has noted, requiring that the “factor other than sex” defense rely upon a legitimate business reason prevents employers “from relying on a compensation differential that is merely a pretext for sex discrimination—e.g., determining salaries on the basis of an employee’s height or weight, when those factors have no relevance to the job at issue.” Although height or weight restrictions are particularly extreme examples, it is critical that courts sufficiently scrutinize the “factor other than sex” defense based on the full range of employer-proffered rationales to prevent unchecked pay discrimination. The Paycheck Fairness Act will provide a means to assess whether employers are setting wages based on an employee’s sex or, in contrast, legitimate rationales tethered to business needs and the particular job in question.
A 2009 CONSAD Research Corporation study prepared for the Department of Labor cautioned against misinterpretation of census and other wage data, suggesting that the wage gap between the sexes was not due to systematic discrimination:
- Although additional research in this area is clearly needed, this study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.
Similarly, Christina Hoff Sommers, a resident scholar at the American Enterprise Institute, criticized the proposed law, citing the study conducted for the United States Department of Labor that showed that differences in pay between men and women are possibly due to "the result of the individual choices being made by both male and female workers" in which women take jobs that are more family-friendly in terms of benefits rather than wages and that women are more likely to take breaks in employment to care for children or parents.
Columnist Daniel Fisher criticized the legislation in Forbes magazine, pointing out that eliminating the "reason other than sex" defense used by employers under existing law would mean that wage differences based on an individual's salary history and negotiating skills would be treated as evidence of discrimination, even if the employer's actions were not based on gender. According to Fisher, the act "eliminates the 'reason other than sex' defense and substitutes instead a requirement that the employer prove that its pay practices are divorced from any discrimination in its workplace or at the employee’s prior workplace, that the pay practice is job related, and that it is consistent with “business necessity.” 
The Equal Pay Act Of 1963 prevents any discrepancies in pay between people within the same field within the same company, therefore making it illegal to pay a man more than a woman and vice versa.
- U.S. Census Bureau. Income, Earnings, and Poverty Data From the 2007 American Community Survey. August 2008, p. 14.
- Claudia Goldin A Grand Gender Convergence: Its Last Chapter
- 29 U.S.C. § 206(d)(1) (2006)
- Staff. "Rights groups urge Paycheck Fairness Act passing", The Louisiana Weekly, September 20, 2010. Accessed September 22, 2010.
- Staff."Senate kills Paycheck Fairness Act" "United Press International. November 17, 2010. Accessed February 8, 2010.
- Associated Press."Obama keeps focus on fight for women's equality",Associated Press. March 12, 2011. Accessed March 28, 2011.
- Dodge, Garen E., and Jane M. McFetridge. "Paycheck Fairness Act Reintroduced in Congress" "Martindale.com" April 27, 2011. Accessed May 31, 2011.
- Editorial. "Shortchanging America’s Women", The New York Times, September 19, 2010. Accessed September 22, 2010.
- 06/05/2012 2:59 pm Updated: 06/06/2012 2:45 pm (June 5, 2012). "Paycheck Fairness Act Fails Senate Vote". Huffingtonpost.com. Retrieved 2012-07-31.
- Staff. "Equal Pay for Equal Work: Pass the Paycheck Fairness Act", American Civil Liberties Union. Accessed September 22, 2010.
- Staff. "Position on Pay Equity", American Association of University Women. Accessed February 28, 2010.
- Under the comparable Title VII “business necessity” standard, an employer must demonstrate that a practice is job related for the position in question and consistent with business necessity. The final question in the business necessity analysis is whether the employer rejected an alternative employment practice that would satisfy its legitimate business interest without resulting in a disparate impact. This standard is familiar to employers and courts, as it has been judicially applied since the Supreme Court’s decision in Griggs v. Duke Power Co., 401 U.S. 424 (1971), and was expressly codified by the Civil Rights Act of 1991. See 42 U.S.C. § 2000e-2 (2006)
- Engelmann v. Nat’l Broad. Co., Inc., No. 94 Civ. 5616, 1996 U.S. Dist. LEXIS 1865, at *20 (S.D.N.Y. Feb. 22, 1996).
- CONSAD Research Corporation (2009). "An Analysis of Reasons for the Disparity in Wages Between Men and Women" (PDF). U.S. Department of Labor Employment Standards Administration. Retrieved 11 November 2013.
- Sommers, Christina Hoff. "Fair Pay Isn’t Always Equal Pay", The New York Times, September 21, 2010. Accessed September 22, 2010.
- Fisher, Daniel. "Paycheck Fairness Act Will Be Anything But", Forbes, July 21, 2010. Accessed September 27, 2015.
- "The Equal Pay Act of 1963". http://www.eeoc.gov. Retrieved 27 January 2015.