Democrats in the U.S. House of Representatives have reintroduced and passed the Paycheck Fairness Act (PFA). Will 2019 be the year we see the bill become law? It just may be.
Hoping to capitalize on their majority in the House of Representatives, Democrats have introduced the PFA for the eleventh time and passed the legislation on Thursday, March 28, by a vote of 242 to 187. The legislation must still be approved by the U.S. Senate, which has a Republican majority. Seven House Republicans joined Democrats in passing the legislation in the House.
The goal of the PFA is to add protections to the federal Equal Pay Act and Fair Labor Standards Act and fill in some of the holes the statutes leave in employment law. These laws have created a foundation for eliminating the gender wage gap, but significant pay disparities still exist across protected classes.
The PFA, if passed, would make several significant changes to current law, including:
- Narrowing the ability of an employer to justify pay disparities based on a factor other than sex as a defense in court;
- Strengthening non-retaliation provisions for employees that disclose information about wages in certain circumstances;
- Mandating collection of compensation data by the EEOC, such as currently required on the EEO-1 report (see below);
- Prohibiting employers from relying on wage history in the determination of wages; and
- Adding enhanced penalties for violations.
Despite the advances proposed in the PFA, not everyone is on board. Some representatives in Congress argue that the PFA is unnecessary, and claim that it would make it too easy for workers to sue their employers. Nonetheless, the likelihood of the PFA being passed by Congress this time around is higher than ever before, with Democrats holding a majority in the U.S. House of Representatives. According to an article by Vox, and the PFA has the support of every Democratic lawmaker.
The introduction of the PFA comes at a time when pay equity is receiving increased attention. Many states have passed laws strengthening pay equity protections. A federal judge recently lifted the stay on pay data reporting requirements in annual EEO-1 reports submitted by employers. Passage of the PFA would be another big step toward addressing pay equity issues in the U.S.
Organizations are lining up to urge Congress to pass the PFA. In stating support for the legislation, Kim Churches, CEO of the American Association of University Women (AAUW), a group that tracks and studies issues in pay equity, stated, “The Paycheck Fairness Act is essential to eradicating practices that have perpetuated the pay gap for far too long. In 2019, the idea that we still don’t have equal pay for equal work is nothing short of outrageous.”
Employers that have not started to focus on their internal equal pay processes should take a look around; it’s only a matter of time before you may be required to defend your pay equity practices, either in litigation or in the court of public opinion. Those organizations that start to review their pay practices now will be ahead of the curve as further legislation is passed at the federal and state levels. A pay equity audit may provide your organization the advantage it needs to turn pay equity into a business opportunity rather than a significant business and financial risk.
A pay equity audit not only helps identify any pay disparities, it brings to light the value of data quality. A recent report by Harvard Business Review Analytic Services, 90% of U.S. employers are planning, considering, or already performing internal pay equity audits.