Ready to overhaul your policies? You may have to, if you want to avoid a lawsuit.
After failing to move forward last year, the Fair Pay Act (not be confused with the already-passed Lilly Ledbetter Fair Pay Act) has been reintroduced into both the House and the Senate.
Pay bias is already illegal, so what’s new about the bill? Language is changed to make it easier for employees to sue.
Under the FPA, it would be unlawful to use sex, race, religion, national origin or disability as a reason to pay an employee less than someone else who performs “equivalent” work. “Equivalent” jobs are defined as “jobs that may be dissimilar, but whose requirements are equivalent, when viewed as a composite of skills, effort, responsibility, and working conditions.” The goal is to keep pay for jobs dominated by women and minorities at the same level as comparable jobs dominated by men.
The bill also eliminates some of the defenses employers can currently use. Under the current Equal Pay Act, companies stay off the hook if they prove a pay disparity was based on “any factor other than sex.” Under the FPA, though, the factor must also be “job-related with respect to the position in question” and “further a legitimate business purpose.”
For example, companies would still be OK when pay is based on seniority, merit or a measure of the quality or quantity of work. But right now, employers have also had success arguing that some employees are paid more than others because they negotiated for a higher salary or earned more in their previous jobs.
But under the FPA, those reasons likely wouldn’t be considered job-related.
