On March 27, 2019, the U.S. House of Representatives voted to pass the Paycheck Fairness Act, an act designed to amend and strengthen the existing federal Equal Pay Act (“EPA”), 29 U.S.C. § 206(d). The Paycheck Fairness Act, which passed the House by a vote of 242-187 on a largely party-line basis, is sponsored by Representative Rosa DeLauro (D-CT), and would make sweeping changes to existing law.
The EPA currently prohibits gender-based pay disparities unless they are based on one of the following four bases: (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by the quantity or quality of production; or (iv) a differential based on any other factor other than sex. The Paycheck Fairness Act would narrow the fourth “catch-all” basis to “a bona fide factor other than sex, such as education, training or experience.” The Paycheck Fairness Act further provides that the “bona fide factor” justifying gender-based pay disparities would only apply where “the employer demonstrates that such factor: (i) is not based upon or derived from a sex-based differential in compensation; (ii) is job-related with respect to the position in question; (iii) is consistent with business necessity; and (iv) accounts for the entire differential in compensation at issue.”
In addition to its proposed change to the EPA’s “catch-all” basis for permissible gender-based pay differentials, the Paycheck Fairness Act would also, among other things:
- Prohibit retaliation against employees who discuss their pay, file EPA claims or initiate pay equity investigations;
- Prohibit employers from relying on the salary history of a prospective employee when considering that prospective employee for employment;
- Require the U.S. Equal Employment Opportunity Commission (“EEOC”) to begin collecting pay data from employers;
- Require the U.S. Department of Labor to study and distribute pay equity statistics derived from the data collected by the EEOC;
- Provide grants to cover salary negotiation training for women and girls; and
- Establish a “National Award for Pay Equity in the Workplace,” to be issued to an employer that has made a “substantial effort” to eliminate gender-based pay disparities.
The Paycheck Fairness Act now proceeds to the Senate for consideration and voting. While the Republican-controlled Senate is generally expected to reject the bill, it remains to be seen how the vote will proceed. We will provide updates regarding the Paycheck Fairness Act as new information becomes available.