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Last week, Democrats secured two Senate seats in Georgia, giving them a narrow edge in the Senate and thrusting Vice President-Elect Kamala Harris even further into the national spotlight. With the critical ability to serve as tie-breaker in the evenly split chamber, Harris will immediately occupy a position of power to shape federal legislation that few vice presidents in history have enjoyed. Now is a good time to review her equal pay plan – a key policy plank in her presidential bid – in order to glean clues about how employers might prepare for regulatory policy changes pertaining to pay equity.
“Companies that do not meet the pay certification standards would be fined 1 percent of their profits for every 1 percent difference in pay between men and women. The proposal also says that, should Congress fail to act, Ms. Harris would apply these standards to federal contractors unilaterally, barring companies that fail to obtain an “equal pay certification” from competing for federal contracts valued at more than $500,000.”
From this reporting, we can see the plan involves a comprehensive bill in congress to create a certification regime to compel covered organizations to address existing gender pay gaps and levying penalties on those that fail to do so. According to Vox, whose reporters also did a deep dive into Harris’s plan, this would be a significant change in how equal pay requirements are enforced:
“Harris’s plan is significant in that it flips the way those disparities are being addressed: As things stand, workers can report concerns about pay to the EEOC, or file a lawsuit if they have concerns about a potential gap. If Harris’s proposal were to take effect, companies would have to proactively provide data to the EEOC every two years in order to show that they’re paying men and women equally.”
Proactive requirements on employers to address pay inequities are not yet widespread, but they are taking hold. Following the signing of California Senate Bill 973 (“SB 973”) into law on September 30, 2020, mandatory pay data reporting took effect on January 1, 2021. The new requirements under SB 973 are positioned to have far-reaching implications for pay equity and pay data reporting both in California and beyond. Vice President-Elect Harris’s supercharged position as Senate tie-breaker could be an accelerant to federal changes to the equal pay legislative landscape. Employers should prepare now in order to be in a strategic position if and when these changes occur.
The first step in creating a more fair and inclusive workplace is to conduct an Equal Pay Risk Assessment. Request your free pay equity consultation, today.