More Fodder for the Fair Pay Debate

The debate about equal pay is bound to continue in light of pending legislation like the Fair Pay Act and the Paycheck Fairness Act, which was passed by the House on July 21, 2008. Here are the nuts and bolts every employer should know about these important new developments.

The Fair Pay Act

The Fair Pay Act seeks to end wage discrimination against those who work in female-dominated or minority-dominated jobs by establishing equal pay for equivalent work. Under the Fair Pay Act, employers could not pay jobs that are held predominately by women less than jobs held predominately by men if those jobs are equivalent in value to the employer. The bill also protects workers on the basis of race or national origin. The Fair Pay Act makes exceptions for different wage rates based on seniority, merit, or quantity or quality of work.

The Paycheck Fairness Act

The Paycheck Fairness Act seeks to strengthen the Equal Pay Act of 1963.  The bill expands damages under the Equal Pay Act and amends its very broad fourth affirmative defense. In addition, the Paycheck Fairness Act calls for a study of data collected by the EEOC and proposes voluntary guidelines to show employers how to evaluate jobs with the goal of eliminating unfair disparities.

Ledbetter Fair Pay Act / Fair Pay Restoration Act

Another interesting piece of pay-related legislation to watch is the Lilly Ledbetter Fair Pay Act / Fair Pay Restoration Act, which seeks to amend the Civil Rights Act of 1964 and other anti-discrimination laws to clarify at which points in time discriminatory actions qualify as an “unlawful employment practice.”  The Fair Pay Restoration Act seeks to change the results of Ledbetter v. Goodyear Tire & Rubber.  (For more information about the Ledbetter decision, see Equal Pay: Fair Pay Restoration Act Voted Down in Senate).

Under the Fair Pay Restoration Act, an unlawful discriminatory act is committed when a discretionary compensation decision is adopted, when an employee becomes subject to the decision, or when an individual is affected by the application of a decision, including each time compensation is paid.   This is inapposite to Ledbetter, where the U.S. Supreme Court held that employees cannot challenge ongoing pay discrimination if the employer’s original discrimination decision occurred more than 180 days before the most recent discrimination, even when an employee continues to receive paychecks that have been discriminatorily reduced for some time. The law further states that individuals may receive back pay as compensation for discrimination that occurred up to two years preceding the filing of a charge.