Life Meets Work Blog

On January 9, the House marked its first week of the new session by approving two measures designed to prevent wage discrimination.  Both measures are under review by the Senate and are reportedly supported by President-Elect Barak Obama.

The Lilly Ledbetter Fair Pay Act passed 247-171 and is now before the Senate. On January 15, the Senate has voted to end discussion and is expected to pass the bill shortly.

The Fair Pay Act would essentially remove the statute of limitations on wage discrimination claims, resetting the clock with each subsequent pay- or pension- check.  The act would reverse the U.S. Supreme Court’s May 2007 decision which held claims to state limitations (either 180 or 300 days) from the first instance of the discriminatory action—whether or not the employee was aware of the discrimination.

The Paycheck Fairness Act passed the House 256-163 and is also before the Senate. It requires employees to demonstrate that wage disparities are based on job performance, experience, education, or other bona fide business purposes.  For the purposes of determining discrimination, it allows comparisons to be made between different physical locations.  It also prohibits retaliation against employees who share salary information and allows employees to seek compensatory and punitive damages for violating equal pay laws.

Opposition
Opponents argue the Paycheck Fairness Act goes too far in exposing employers to damages, leading more employers to settle cases even when no discrimination occurred. They also argue that it limits standard pay practices such as regional market rates and prior salary history.

They also argue that the Fair Pay Act goes beyond reasonable limitations, exposing companies to nearly un-ending responsibility for pay decisions made by prior management for which no witnesses or records may be available. They say the legislation, as written, could also allow descendants and family to bring wage discrimination suits—even after the employee is deceased.

Posted by Jaime.

The House is scheduled to vote on the Lilly Ledbetter Fair Pay Act and the Paycheck Fairness Act today, January 9.

Earlier this week, lobbyists encouraged their constituents to contact their representatives for and against this bill.

The Society for Human Resource Management (SHRM) says the bills go too far.  Here’s an excerpt from their action alert:

The Paycheck Fairness Act would limit an employer’s ability to justify paying different salaries to workers based in different locations with different costs of living. Second, the bill would lift the caps on compensatory or punitive damages for which employers would be liable, in addition to current liability for back pay.  These damage penalties would apply to even unintentional pay disparities.

MomsRising, however, argues the Paycheck Fairness Act provides long-overdue equitable protection for women.  From their action letter:

The Paycheck Fairness Act would deter wage discrimination by closing loopholes in the law and barring retaliation against workers who disclose their wages.  The bill strengthens the Equal Pay Act to ensure that it provides effective protection against sex-based pay discrimination.  Toward that end, it also allows women to receive the same remedies for pay discrimination that are currently available to those subject to discrimination based on race and national origin.

Can you see the legitimacy of both arguments?

Posted by Jaime