Paycheck Fairness Act Passes in House

The House of Representatives, reacting to congressional findings, has passed, 247- 178, the Paycheck Fairness Act– which aims to amend the Fair Labor and Standards Act of 1938 (FLSA) to provide more effective remedies to victims of discrimination in the payment of wages on the basis of sex. Reacting to findings that pay disparities between sexes have large negative effects on the economy and labor resources, the Paycheck Fairness Act will, if enacted, work toward removing the artificial barriers to the elimination of discrimination in the payment of wages.

The goals of the Act- reducing the number of working women receiving unfair wages, ensuring future workers are afforded equal protection on the basis of sex, and promoting the stability of families by ensuring all members earn a fair rate of pay- according to the Act are set to be accomplished by amending many provisions of the Equal Pay Act (EPA) including: the Non-retaliation Provision, by prohibiting employers from punishing employees that share their salary information; the Penalty Provisions of the Act, by allowing employees to recover compensatory and punitive damages where warranted; and, among others, the Bona-Fide Factor Defense.

Under the current reading of the EPA an employer can mount an affirmative defense that pay differentials between women and men in the same position are due to “factors other than sex.” With the proposed amendments to the Bona Fide Factor Defense provision employers would only be able to raise this defense where they could show that the relied upon 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; and(iii) is consistent with business necessity.” Such an affirmative defense would not apply if an employee could show that there is an alternative practice that would serve the same business purpose without creating such differential wages and that the employer refused to employ such an alternative.

In addition, the proposed Act calls for the establishment of financial grants that public agencies would use to establish programs geared to training girls and women in the art of effective negotiation. The aim of the program is to address critics that argue pay differentials can be attributed to the female lack of skill, or assertiveness, in salary negotiations.
New York has its own equal pay statute, which is based upon the federal EPA. Although the Paycheck Fairness Act does not amend the New York statute in any respect, New York employers and employees are protected by the federal Paycheck Fairness Act, as are employees of other states.
Jessica Nelson, a summer associate, assisted in the preparation of this blog.

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