The House approved the Paycheck Fairness Act. Now, it will probably die in the Senate. 💀💀💀

“Equal Pay for Equal Work” has been the rallying cry in support of the Paycheck Fairness Act (PFA), which the House passed last week by a 217-210 vote.

According to the U.S. Bureau of Labor Statistics, in 2020, women earned 82 cents for every dollar men received. So, on paper, paying men and women the same wages for the same work — “paycheck fairness” — sounds, err, fair.

So, why has the PFA never reached the President’s desk in any of the past dozen attempts going back to 1997 that it’s been introduced in Congress? Let’s find out.

What is the PFA?

When Congress amended the Fair Labor Standard Act in 1963, it included equal-pay provisions. These equal-pay provisions make it unlawful for an employer to pay men and women doing the same or similar work differently — unless the employer can demonstrate that it based the pay differential on “any other factor other than sex.”

The PFA would strike “any other factor other than sex” and insert “a bona fide factor other than sex, such as education, training, or experience.”

Additionally, the PFA enhances nonretaliation prohibitions and makes it unlawful to require an employee to sign a contract or waiver prohibiting the employee from disclosing information about the employee’s wages. The bill also increases civil penalties for violations of equal pay provisions.

The bill directs the Department of Labor to (1) establish and carry out a grant program for negotiation skills training for girls and women, (2) conduct studies to eliminate pay disparities between men and women, and (3) make available information on wage discrimination to assist the public in understanding and addressing such discrimination.

The bill also establishes the National Award for Pay Equity in the Workplace for an employer who has made a substantial effort to eliminate pay disparities between men and women.

Finally, the bill requires the EEOC to issue regulations for collecting from employers compensation and other employment data according to the sex, race, and national origin of employees to enforce laws prohibiting pay discrimination.

What’s the problem with the PFA?

President Biden is chomping at the bit to sign the PFA into law. But, it has to get through the Senate first.

And why is that unlikely to happen?

1. The Senate cloture rule. Sixty Senators must agree to end the debate (e.g., filibuster) on the PFA and move to a vote on the actual legislation. The PFA does not have Republican support (more on this in a bit). There are 50 Republicans in the Senate. Good luck finding ten for cloture.
2. Business groups dislike the PFA. In March, the Chamber wrote to the House of Representatives to explain why it opposed the PFA. Here are a few reasons:
   • “The PFA imposes a new multi-factor test that includes a vague ‘business necessity’ test that would effectively eliminate the ability of an employer to make compensation decisions based on [experience, education, location, and shift work].
   • “[The PFA] would also for the first time allow for compensatory and punitive damages, [which Title VII already permits].”
   • “This bill would also modify existing rules concerning collective actions, making it easier for plaintiffs’ attorneys to mount class action suits by reducing the criteria necessary for employees to join a class.”
3. The return of the EEO-1, Component 2 data collection. Who wants that anyway? 🤢🤮

What will happen to the PFA?

Probably the same thing that happened the last 12 times that Congress introduced it. It won’t make it to a vote in the Senate.

The Employer Handbook Zoom Office Hour – April Schedule

A special thank you to Lori Ecker, who spent an hour on Friday with me discussing the next wave of employment lawsuits in 2021 and what businesses can do now to prepare for (and hopefully avoid) them. If you missed it, you can catch the replay here on The Employer Handbook YouTube Channel.

On Friday, April 23, from 12-1 PM ET, by popular demand, it’s Beverages and Benefits, where my partners Mark Mathis, Bob Ellerbrock, and Amy Epstein Gluck will take a deep dive into the new U.S. Department of Labor guidance and model notices to support the new COBRA premium subsidy under the American Rescue Plan Act of 2021. You can register for that here. If you have hypothetical questions for a friend, please complete this form. We’ll do our best to answer them without providing any legal advice whatsoever.

Friday, April 30, from 12-1 PM ET, my rockstar partner, Susan Warner, will join us to discuss Title III, the Winn-Dixie victory, and proactive steps that your business can take to bulletproof itself against these types of ADA claims. Click here to register.