Human Resources News & Insights

Pending pay bill could ‘cripple small businesses’

Congress is set to consider yet another law on pay discrimination — and if it passes, employers are not going to be happy.

The Paycheck Fairness Act (PFA) is again on the table — Senate Majority Leader Harry Reid (D-NV) recently placed the measure on the legislative agenda.

Not a pretty picture

What’s all the fuss about? Here’s what employers need to be worried about, according to the Society for Human Resource Management:

  • The bill would make employers liable for unlimited punitive damages under the FLSA for even unintentional pay disparities, and eliminate current limits for back pay as well as for punitive and compensatory damages on employers
  • It would pave the way for more class action lawsuits against employers by repealing the requirement that employees must give their written consent to become a party in an Equal Pay Act class action, and
  • PFA would restrict an employer’s flexibility to compensate its employees based on current law criteria, such as cost-of-living differences among geographic locations, different work responsibilities within similar job categories or prior salary history.

Business advocates fire back

The bill’s drawn a lot of fire from business groups, including the U.S. Chamber of Commerce. And during hearings last March, one labor attorney said the PFA “has the potential to cripple companies, particularly smaller businesses.”

The bill’s already passed the House. It was introduced in the Senate in early 2009, but never came to a vote.

Dems rally support

Make no mistake, the Democratic administration’s fully behind the bill. Latest evidence: Labor Secretary Hilda Solis’ statement, via Webcast, of support for the measure.

Also appearing on the Webcast: Lilly Ledbetter, for whom an earlier “fair pay” law was named.

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  1. I haven’t read the actual bill (House or Senate versions). But what it sounds like to me is that this would set up businesses to have to have a government style pay table. That is, this position holds this pay grade, and with this seniority, you get this much pay. Now THERE’S an incentive to be more productive!

  2. Diane Kelly says:

    This is crazy….

  3. And then people complain when so many companies outsource jobs…there’s a cause-and-effect at work in this country.

  4. I can’t believe this could possibly pass all the way through to law. There has got to be someone in Washington that has some business sense. I cannot imagine that Senators from states with big cities would be able to let this get passed and expect to get re-elected. Our government is so out of touch with reality and bills like this prove it. When are we going to get the Communism Czar?

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