Recently, numerous representatives in the U.S. Congress renewed their efforts to close pay disparities between men and women in pushing for the passage of the Paycheck Fairness Act. First introduced in 1997, the current version of the Paycheck Fairness Act would amend the Equal Pay Act and make employers liable for pay disparities between men and women absent a justification.
The current version of the Equal Pay Act generally prohibits paying men and women differently for the same work unless the disparity is based on seniority, merit, the quantity or quality of the employee’s work, or any other factor other than sex. The Paycheck Fairness Act would narrow the “any other factor other than sex” defense to only apply if an employer can show three things:
- The pay disparity is not based on or derived from existing gender-based pay gaps;
- The pay disparity is related to the specific job and necessary for the business; and
- The employer can account for any differences in pay between employees of different genders.
Additional provisions of the bill would prohibit employers from punishing or retaliating against employees who discuss their pay or participate in pay disparity and equity investigations, and would prohibit employers from asking for an individual’s salary history.
While the bill will likely pass the House of Representatives, whether it passes the Senate remains to be seen. Should this bill pass, the U.S. Department of Labor and U.S. Equal Employment Opportunity Commission will undoubtedly place many employers under a lens of scrutiny.
However, in the continued push to close pay disparities based on gender, race, and other immutable characteristics, it is imperative that employers begin and continue a meaningful evaluation on how their employees are compensated, where gaps in compensation exist, and whether there is a reasonable justification for such gaps. Even if the Paycheck Fairness Act does not become a law, ensuring fair and equitable compensation among employees can have significant and positive impacts, including reducing turnover and bolstering employee morale.