Congress Moves Quickly on Pay Equity Bills
Only days after the start of the new 111th Congress, the U.S. House of Representatives passed two pay equity measures. Both H.R. 11, the " Ledbetter Fair Pay Act ," and H.R. 12, the " Paycheck Fairness Act ," passed the House by significant majorities.
Both bills would amend several employment statutes, most notably Title VII of the Civil Rights Act and the Equal Pay Act of 1963.
Paycheck Fairness Act:
The Paycheck Fairness Act , authored by Representative Rosa DeLauro (D-CT), would amend the Equal Pay Act to give employees new ways to challenge their employers' pay practices. SHRM is concerned the bill would make it significantly more difficult for an employer to use legitimate factors – such as education, training, or experience – as a component of its pay system.
Also, the bill could impact an employer's ability to use local market rates and prior salary history in setting an individual's compensation. Additionally, the bill would compel individuals to "opt-out" of, rather than "opt-in" to, class action lawsuits. This change in the law would likely result in increasing the number of plaintiffs in such cases, with the potential for unlimited punitive and compensatory damage awards, in addition to liability for back pay.
Ledbetter Fair Pay Act:
The Ledbetter Fair Pay Act , sponsored by House Education and Labor Committee Chairman George Miller (D-CA), passed the House by a 247-171 margin. This bill would establish that the time clock for filing a wage discrimination charge with the Equal Employment Opportunity Commission restarts every time an employee receives a paycheck, or even a retirement check. Thus, employers would be liable for management decisions made years earlier for which there may be no available records or witnesses.
The Ledbetter legislation would also significantly expand current law by allowing not only an aggrieved employee, but other individuals who were "affected" by an act of pay discrimination to file a claim. Also, the legislation may allow family members (including spouses, children and other relatives) to become plaintiffs in discrimination suits over a worker's pay – even after the employee had died.
SHRM Position:
SHRM strongly supports the Equal Pay Act and Title VII of the Civil Rights Act, and condemns compensation practices that discriminate based on gender, race, religion, color, or national origin. At the same time, SHRM opposes both the Paycheck Fairness Act and the Ledbetter Fair Pay Act as currently drafted because these bills would greatly restrict an employer's ability to manage legitimate pay systems and would expose employers to unprecedented liability.
Both bills are now before the U.S. Senate, where Democratic leaders have promised quick action on both. At press time, debate on Ledbetter is expected to commence today, with a vote on final passage possibly today, January 16. Look for further developments on these and other HR public policy proposals in future issues of the HR Issues Update .
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