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HR pros rally against Paycheck Fairness Act passage

by May 25, 2012 15 Comments

Beware: The Paycheck Fairness Act has raised its ugly head once more.

The bill, which would amend the Fair Labor Standards Act, was re-introduced by Sen. Barabara Mikulski (D-MD) this week. Ilyse Schuman, writing on dcemploymentlawupdate.com, says the bill would:

  • Expand damages under the Equal Pay Act to include potentially unlimited compensatory and punitive awards.
  • Prevent employers from relying on the “factor other than sex” affirmative defense in wage discrimination cases. An employer would be required to show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity.
    An employee could rebut this claim by showing that an alternative employment practice exists that could achieve the same business purpose.
  • Incorporate anti-retaliation provisions into the FLSA that would protect employees who have made a complaint, filed a charge, testified or otherwise assisted in an investigation or proceeding related to an unfair wage complaint.
    The provisions would also protect employees who have inquired about or discussed theirs or their coworkers’ wages.
  • Eliminate the requirement that employees work in the same establishment for wage comparison purposes. An employer’s establishment would include workplaces located in the same county or similar political subdivision of a state.
  • Reinstate the Equal Opportunity Survey, to be administered by the Office of Federal Contract Compliance Programs (OFCCP).
    The EO survey, which was abolished during the Bush Administration, allowed the agency to gather certain employment information from federal contractors and subcontractors related to their Affirmative Action Programs, personnel activity and compensation.

SHRM calls for action

The bill is expected to come before the Senate the week of June 4, and the Society for Human Resource Management is asking its members to contact their senators to urge the bill’s defeat.

According to SHRM’s email message, HR pros should emphasize that the proposal would:

  • Restrict employer flexibility in pay decisions.  The PFA would effectively prohibit employers from using many legitimate factors to compensate their employees, including professional experience, education, training, employer need, local labor market rates, hazard pay, shift differentials and the profitability of the organization.
    The PFA would permit employers to base pay decisions only on production, merit and seniority.
  • Require collection of employer wage data.  The PFA would authorize the Equal Employment Opportunity Commission and the Department of Labor to collect compensation data from compensation managers.
  • Reduce employee privacy. The PFA would effectively encourage employees to discuss or publicize their co-workers’ wages by preventing employer retaliation against an individual who publicly discloses the wages of other employees.

For SHRM’s analysis of the PFA (S.3220), go here.

 

Categories: Employment Law, FLSA (Fair Labor Standards Act), In this week's e-newsletter, Latest News & Views, Management, Pay and Benefits
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  • Sheila

    It is a shame that employers continue to discriminate paywise towards women. If they didn’t, this sort of thing would not be on the table.

  • Common Sense

    When considering that the gender wage gap is quite minimal, it seems a shame that this type of government intervention is even on the table. HR pros are wise to rally against this so called “Fairness” Act along with it’s regulatory burdens and wage-setting intrusions.
    I fail to see what is “fair” about effectively prohibiting employers from considering “professional experience, education, training, employer need, local labor market rates, hazard pay, shift differentials and the profitability of the organization” when determining pay.

  • Grant_X

    As usual, a lot of HR professionals are on the wrong side of what is right and wrong, and are only interested in covering their rear.

    We need equal pay, right now, and this will ensure it. When employers stop discriminating against women, then this type of policy will not be necessary.

    I see zero problem with an employer being required to, “show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity.” If you are just doing business as usual, and you have no wage discrepancies that are based on sex, then what are you worried about?

    The truth is that this law won’t affect you AT ALL, it will only affect the businesses that do have wage discrepancies that cannot be explained by any other factor than sex. And that is a good thing, because women who are being discriminated against (right now, this very minute) will no longer be discriminated against.

    Sometimes, you have to force people to change their scurrilous ways. This is clearly one of those times.

  • barbara Hampton-Barclay

    The gender wage gap is minimal if you have two adults working but critical for single parents who are women. Employers will be allowed to consider these criteria you mentioned and use that consideration to prove that they did not discriminate based on gender. Unfortunately, regulation is necessary because employers have discriminated for so long against women in favor of white men. White men have had affirmative action since before the constitution was signed.

  • Uncommon Sense

    While I wouldn’t call a 20 to 35% gap minimal, I don’t think this act will really accomplish much in terms of closing it. It does not address career and field choice, nor does it address circumstances where an individual chooses to take a lower paying position because of flexibility factors which make childcare or eldercare easier. This Act does in fact make it more difficult to defend a complaint or suit that alleges discriminatory pay practices based on gender, even when gender is not the motivating factor for the decision. It will definitely increase the amount of resources employers will need to devote to building stronger documentation, while I don’t feel it will actually change the way decisions are made. Furthermore, the reporting requirements are indeed burdensome, again without any guarantee of improving said practices of inequality.

    The Act would not “effectively prohibit employers from considering experience, education, training, employer need, market rates, hazard pay, shift dffs, or profitability”; however, it does make it requires extreme measures to ensure documentation that one or more of those factors were in fact the criteria used to make compensation decisions. It will be overly burdensome and is not likely to cause a drastic improvement of the current landscape.

  • Uncommon Sense

    “however, it does make it requires extreme measures to ensure documentation” — meant to say, however, it requires extreme measures to ensure documentation.

  • MMAN

    @Common Sense…the legislation does not prohibit employers from considering professional experience, education, training, employer need, local labor market rates, hazard pay, shift differentials and the profitability of the organization or you are reading something into it that I for one do not read. It does state that when disparities in pay do exist between genders, that these factors must be demonstrated and even if they are, they must be ob related and of business necessity.

    You also that there is a “minimal gap” in pay equality in males and females. Just what is a minimal gap by your definition? I’ve seen a lot of figures on this and those that I have seen are definitely not minimal. A gap of even 10% (I’ve seen stats showing greater gaps than this BTW) is too much for me especially when those on the lower side of the pay gap are consistently of the same gender. Again, this is one of those situations where if the shoe was on the other foot you would probably feel differently.

    If this legislation is passed it will be no one’s fault other than those businesses out there who do consistenltly pay women less than men, so blame them not your people in legislative offices.

  • Common Sense

    @MMAN You say “The legislation does not prohibit employers from considering professional experience, education, training, employer need, local labor market rates, hazard pay, shift differentials and the profitability of the organization or you are reading something into it that I for one do not read.”

    Apparently you do not read, because the article clearly states that SHRM is asking its members to contact their senators to urge the bill’s defeat because the legislation does effectively prohibit employers from considering the exact forementioned reasons.

    Yes the gap is minimal. Roughly 5% after you factor in all the variables. Please read http://www.realclearmarkets.com/articles/2012/05/03/romney_flirts_with_pay_equity_99651.html the article explains why the often cited 80% pay discrepancy is a bogus statistic. The 80% statistic does not factor in that “Full-time women work fewer hours than men, and 24 percent of women work part-time. Many women leave the workforce after child birth, or work shorter hours afterwards. Some choose flexible jobs, paying less, to enable them to combine work and family.”

    Once again, please don’t project your pre-conceived beliefs on what you think a minority class feels and on how I might change if I were a minority. We have already been over this. Why is it so important for you to re-characterize my position? Do you go around telling minorities they would/should feel differently if they were W.A.S.P.’s?

  • Sheila

    As a woman, I am not willing to marginalize even a 5% pay difference for the same work. (It could be my light bill being paid or not.) I have worked in a position over the years to view the salaries and I can assure you, women are routinely still paid less then men for the SAME EXACT job duties.

    We can blame it on inferior job negotitating skills, we can scream old boy’s club, or we can bang into the glass ceiling, but there has to be more than a gender issue to bring people into the same job for less money. The woman who is the forerunner in this case was discriminated against. Totally. And it is unfair. It has gotten better over the years, but due to the confidential nature of salaries, until an employee “compares notes” with another it goes un-noticed. It is a very real bias, and it extends far into corporate culture.

    Perhaps there is no perfect answer, but if I hire John and then Sue to perform the same duties on the same day and he makes 5% more, there had better be a darn good reason. If there is (Sue will need more training, John had prior experience) document it. If there isn’t (both John and Sue graduated from the same school and this is an entry level job) than what pray tell makes John worth more? Yet this continues to happen. I am a woman and I have been lowballed for years. If you are a male it has probably not fallen onto your radar.

  • MMAN

    @Common Sense…according to the article under discussion, an employer would be required to show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity.
    An employee could rebut this claim by showing that an alternative employment practice exists that could achieve the same business purpose.” With that said, either the article under the link you have provided is wrong or this one is…I also feel they are going on a wild tangent when they refer to dangerous jobs v/s non-hazardous jobs. I don’t think the legislation is demanding that employers should pay females and males the same for different jobs or at least I don’t read that here. It is more or less referring to equal work ought to mean equal pay regardless of gender. The article you provided also says that this legislation will favor women over men. How so? All it requires is women to be paid the same as men for the same work with the same responsibilities. I think you are making a mountain out of a mole hill. However, on the other side of that, if women are getting paid less than men across the board for the same work, then they do have a legitimate complaint.

    I agree with Grant_X.

  • MMAN

    @Sheila…for some of us males, it has not fallen off our radar because this type of behavior is unethical. I agree with you 100% what you are saying…same work should = same pay. Even in a case where a male that has more experience and/or education than his female counterpart gets paid more, that experience and/or education should translate into more productivity for the male. However, even in this case, if the productivity is the same, they should get paid the same.

    On the lines of employers not wanting their employees to discuss their salaries, it is for this reason that they do not want them to. They are fearful that it will reveal the inequities in their compensation processes. Other than that, if there is parity in pay, who cares if employees talk salary amongst themselves.

  • Common Sense

    @MMAN I think it is funny how you say that it is I who is making a mountain out of a mole hill, when it is you and others who are advocating federal legislation for a nominal discrepancy and I am the one who equates this legislation as swatting a fly with a sledgehammer.

    It is high time to stop the practice of addressing every little injustice in this world be “fixed” with a Federal law, because all too often the law ends up causing more problems than it solves and most of the people who are doing things the right way in the first place get ensnared into a labyrinth of red tape and bureaucracies.

    You say that you feel I am “going on a wild tangent when they refer to dangerous jobs v/s non-hazardous jobs”. I really don’t know why you fail to see the relevance. If most people knew the real difference of 5% this legislation would not even be brought to the floor. It is a common misconception that the gender pay discrepancy is 20% to 35% (E.g. “Uncommon Sense” made the all too common mistake of citing those bogus statistics earlier in this thread). Those numbers don’t take into consideration the fact that men take more hazardous jobs. It is extremely disingenuous and misleading to complain that women are paid 20% less in a particular company when the majority of the men may be working as a high rise steel workers and the majority of women are working in customer service. If the rolls were switched and it were women that were risking their lives by walking 4″ metal planks 200″ above the ground , they would be paid more than the men in the office answering the phone. The activists groups (like NOW) that push this legislation, refuse to address these types of variables and they manipulate the data to make the problem seem worse than it really is. (BTW, the media is complicit it propagating these lies. Thus the common misconception that there is a huge pay gap based on nothing but sexism within the good old boy’s club).

  • MMAN

    @Common Sense…I hear you but I am speaking only in relation to same work/same productivity/same pay. I don’t necessarily think this legislation is meant to and/or will have the effect of addressing pay variances between underground coal miners and receptionists.

    BTW why do you think that the statistics that you base your decisions on are better than those uncommon sense has used? You can bet that others can and do claim that your stats have been manipulated to show that the pay discrepancy in the sexes is not as large as other studies have shown.

  • Common Sense

    @MMAN You ask: “Do you think that the statistics that you base your decisions on are better than those uncommon sense has used?” Yes, I have no doubt. As I tried to explain earlier, my statistics take into account many of the many variables, whereas the 20%-35% numbers often cited do not. The 20% to 35% numbers are not necessarily wrong, but they are deliberately manipulative and misleading. Feminists groups like NOW post these raw numbers without accounting for the reasons, the media parrots them and pretty soon it becomes a false truism.

  • Knightnote

    Seems SHRM does not have the support of all members.