Human Resources News & Insights

Paycheck Fairness Act ‘could cripple small businesses’

Now that healthcare reform is a done deal, employers have a new Congressional concern: The Paycheck Fairness Act.

The PFA “has the potential to cripple companies, particularly smaller businesses,” attorney Jane McFetridge told the Senate Committee on Health, Education, Labor and Pensions in a recent hearing on the proposal (S. 182).

Why’s that? Because the PFA has no statutory cap on damages.

Bigger burden on employers

The PFA’s other big danger for employers: A narrowing of the acceptable reasons for pay differentials between sexes. Current law — the Equal Pay Act of 1963 — allows a company to defend unfair pay practices by proving the comp decision was based on “any factor other than sex.”

The PFA would force employers to show the difference in pay was based on a “bona fide factor other than sex” that is “job related” and “consistent with business necessity” — a much stricter standard.

McFetridge is a partner in the employment law firm Jackson Lewis. A full account of her testimony can be found here.

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  1. Real HR Pro says:

    I think it’s sad what a tabloid these forums have become. When George W was in office, all the headlines focused on what an idiot he was and now that Obama is in office what a socialist he is; these forums are tabloid jokes and I can’t believe for half a second that the majority of the participants are business professionals, let alone HR professionals. Bunch of punks who can’t hang is more likely.

    These headlines just DARE people to post a response.

  2. This was illegal before the new law is passed. If the small business is a restaurant and the cooks are guys and the servers are ladies there is no problem. If the cooks are both genders and males are paid more than females it is already a problem now.

    Nothing to see here. Just move along…..

  3. Small Manufacturer HR says:

    I heartily agree with Real HR Pro, but it’s more than the forums aspect, it starts with the chosen headlines and stories themselves. It’s an incredible shame that so many issues are presented in the most incendiary manner. I DARE the publishersto report in a balanced fashion without resorting to the most eye catching outrageous headlines and slant, left, right, or other, and instead offer a format more informative and productive.

  4. I’m with Real HR Pro and Small Manufacturer HR… let’s lose the sensationalism.

  5. I was losing faith in these forums until today. It is nice to see others too are calling for honest discussions without emotions or sensationalism. Thanks for speaking up Real HR Pro and Small Manufacturer HR.

  6. Merlynn Bertini says:

    I am glad to see that other posters sharing my position. I have previously posted my disappointment at an article taking what here has been described very appropriately above as “sensationalism”. Hopefully, this forum will start paying attention to what the responders are “saying”, refocus and return to presenting information in an informative rather than sensational manner.

  7. I’m glad that the people posting here have good common sense, even if the publishers don’t. Illegal then equals illegal now. Let’s have sensible articles about issues that are real.

  8. Dave Dingee says:

    So far the comments are surprising if they are from HR professionals. Why is this article sensationalism? Have you read what the Paycheck Fairness Act (PFA) does? It has a nice name, as does the pro-union Employee Free Choice Act. The PFA removes the Equal Pay Act’s caps on punitive and compensatory damages. It makes it easier to bring class action lawsuits. It is heavily favored by trial lawyers, a group that heavily contributes to the Democratic Party.
    Most small and large business leaders don’t want to discriminate. However, this bill will make it much more difficult to defend these cases, forcing costly settlements that could put some companies out of business.

    HR professionals need to have business savy. This bill does not help business–especially at a time when unemployment is almost 10% and many companies are barely surviving.

  9. I agree with Real HR Pro. This forum has become too polictical and “sensational”. As to the removing of penitive and compensatory damages, this will probably be put back in. All bills change as they go through the “Congressional” process so I usually do not pay attention until it is close to passing.

  10. There will always be a gender gap in payroll amounts – the company I work for while they have been very good to me in the years that I have been with them, ALWAYS pay men higher salaries than women.

    My superior told one lady working here he would always hire women for certain jobs because he could pay them less than a man because a man had a family to support.

    while we know wage discrimination is illegal it happens all the time – the part I find hard is doing my job and someone elses too and not being compensated for it. When they do get a man in the job, he can’t perform the duties, is constantly getting someone (me or someone else) to help him and all the time he is making at least 1/3 more in salary.

    The good ole boys network is alive and well in America that will never change.

  11. Doris R, it’s talk like this that allows wage inequities to continue. You make broad generalizations about the men you have worked with, lumping them all into one useless category. You expect your employer to make distinctions based on individual performance, skill and merit and that you are not even willing to make yourself.

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