This month, Congress will consider the Paycheck Fairness Act (PFA) as an update to the Equal Pay Act that was signed into law more than 40 years ago.  If the PFA passes, employers will be subject to some new key mandates — not to mention tougher penalties for violations.

Like any legislative proposal, the PFA contains literally dozens of components, most having to do with ensuring that women get equal pay for equal work. But employers will find five of those components more meaningful than others:

• Elimination of an employer’s “affrirmative defense.” Under the Equal Pay Act, when an employer is found to be paying female employees less than male employees for equal work, the employer may assert an “affirmative defense”  that the pay differential is based on a factor other than gender. For instance, and employer may argue that a man had a higher salary in a previous job and thus commands a higher pay than a woman in the same job. The PFA tightens this affirmative defense so that it can excuse a pay differential for men and women only where the employer can show that the differential is truly caused by factors related to performance or responsibility.
• Elimination of the cap on damages. The Equal Pay Act stipulates that an employer found in violation is liable only for fixed amounts, such as differentials for back pay. That would change under the PFA: Employees could sue for and get punitive and compensatory damages, leaving the door open for windfalls even if the pay disparity is unintentional.
• Prohibition for disciplining disclosure of wage information. The law now stipulates that employers can classify some pay info as confidential and punish employees for disclosing that info. The PFA would bar employers from handing out discipline for such disclosures.
• Elimination of the “establishment” requirement. Under the EPA, in order to determine that there is wage discrimination, the wage comparison must be made between employees working at the same “establishment.” Some courts have interpreted this to mean that wages paid in different facilities or offices of the same employer cannot be compared even if the employer is paying workers different salaries for the same work. The PFA stipulates that a comparison need not be between employees in the same physical place of business. In other words, employees in Peoria and Los Angeles would be considered equals if their responsibilities were the same.
• Recordkeeping requirments. The PFA would require all employers to keep records of the methods they use to set employee wages. An employer would also have to provide yearly reports to the EEOC that describe the company’s workforce by position and salary as well as gender, race, and ethnicity.

See the text of the Paycheck Fairness Act, first introduced in March 2007.

Tags: eeoc, Equal Pay Act, Paycheck Fairness Act, PFA