House Passed the Paycheck Fairness Act

On April 15, the U.S. House of Representatives passed the Paycheck Fairness Act (H.R. 7) by a 217-210 vote. The legislation, if enacted, would require employers to prove that pay disparities between men and women are job-related.

The bill would, among other provisions:

  • Require employers to show that pay disparities between men and women are job-related and consistent with business necessity.
  • Make it easier for plaintiffs to participate in class-action lawsuits that challenge systemic pay discrimination.
  • Strengthen the Equal Pay Act of 1963 (EPA) and provide greater remedies for prevailing plaintiffs.
  • Prohibit employers from asking job applicants about their salary history or relying on salary history to set compensation. But an employer could use a prospective employee’s wage history if the employer makes a job offer and the applicant reveals his or her salary is more than the proposed salary. The employer could then increase the salary offer.
  • Prohibit employers from retaliating against workers who discuss their pay with co-workers. The National Labor Relations Act already gives employees the right to discuss their pay.

Four federal statutes ban discrimination in pay:

  • The EPA
  • Title VII of the Civil Rights Act of 196.
  • The Age Discrimination in Employment Act
  • The Americans with Disabilities Act

In addition, the Lilly Ledbetter Fair Pay Act extends the statute of limitations for pay discrimination claims, and Executive Order 11246 prohibits pay discrimination by federal contractors.

The EPA was the first piece of modern civil rights legislation. Under the EPA, a claimant need only demonstrate that an employer pays men more than women without proving discriminatory intent. To avoid liability under the EPA, an employer must prove that any disparity is justified by one of the following:

  • A seniority system that rewards employees based on length of employment.
  • A merit system that rewards employees for exceptional job performance.
  • An incentive system that pays employees based on the quality of their work or the amount of work they perform.
  • Another factor related to job performance or business operations, such as paying a shift differential to workers on less popular shifts.