By Fran Haas
National “Equal Pay Day” is observed on April 8, 2014. To commemorate Equal Pay Day, the United States Senate plans to hold a vote on the Paycheck Fairness Act. The stated purpose of the Paycheck Fairness Act is to enhance the Fair Labor Standards Act (“FLSA”) to take further steps to reduce pay disparity between men and women.
The Paycheck Fairness Act would prevent employers from taking action against workers who discuss wage or salary information with other employees. Lawmakers believe so-called “wage secrecy” or discouragement of employee discussion of wages has inhibited measures to reduce pay disparity.
Most employers are aware of the current prohibition against disciplining workers for discussing wage information—this is a protection contained in the National Labor Relations Act (“NLRA”). The Paycheck Fairness Act would have a broader application than the NLRA. It would apply to a larger group of employees and would give employees a private cause of action if the employee was disciplined for discussing wage and salary information with co-workers. The NLRA currently does not provide an employee with such a straight-forward right to commence a lawsuit for this conduct.
The Paycheck Fairness Act would also change the way employers defend gender-neutral pay policies in litigation. Currently, the law allows employers an affirmative defense to an equal pay claim under the FLSA if the employer can prove pay disparity is due to “any factor other than sex.” The new law would change that. It would require the employer to show the pay disparity is based upon a factor other than sex that “is job-related with respect to the position in question” and “is consistent with business necessity.” It would also allow a plaintiff to defeat this defense by showing an alternative employment practice would serve the same business purpose but eliminate the pay disparity.
What chance does the Paycheck Fairness Act have to pass the Senate? Experts expect the current version of the bill to fail. Two prior versions of the bill failed due to concern that the bill would harm businesses. However, you should expect to hear a lot about this bill, or variations of it, in the coming days. Even if the law does not pass this time, we will likely see it come up again. And, many states are passing their own version of this law (though Iowa has not yet joined the pack).