Paycheck Fairness Act-Proving Females Are Paid Equally

Congress has nothing better to do but create more potential litigation headaches for employers. If Congress passes the Paycheck Fairness Act, it has the potential to cripple small businesses. Let me go back in time for a moment. In 1973 The Equal Pay Act (EPA) was created to ensure that female employees were not paid less than a male employee for “substantially equal work.” The law does not require any showing of discriminatory intent. The EPA permitted an employer to defend unfair pay practices by proving the compensation was based on “any factor other than sex.” Examples included; a seniority system, a merit system, or a system which measures earnings by quantity or quality of production.

The Paycheck Fairness Act could create a problem in that it would replace the EPA’s “any factor other than sex” defense with a much more demanding requirement. The employer would have to prove the difference in pay was based on a “bona fide factor other than sex” that is “job related” and “consistent with business necessity.” Furthermore, the “business necessity” defense would be unavailable if the female employee could prove that there was an alternative employment practice available to determine her rate of compensation.   

Don’t get me wrong! I do believe everyone should be paid equally but, there are sooooooo many factors that goes into determining compensation. This law would open the door to female employees challenging every raise, every commission structure,  and every bonus. In addition, under the California Labor Code, employers cannot prohibit employees from discussing salaries which means that the office rumor mills will really begin to buzz if this law is passed.

It should also be noted that there are currently laws to protect against gender-based pay discrimination. Besides the Equal Pay Act, there is Title VII of the Civil Rights Act of 1964 and under California we have the Fair Employment & Housing Act. This new act would make it much more difficult to fight off these types of claims which would expose businesses  to unlimited compensatory and punitive damages.

I will update you if this is passed.