Client Alert

On January 6, 2009, H.R. 12, the Paycheck Fairness Act, was introduced in the House; three days later, it passed by a 247-178 margin, with 9 Representatives present but not voting. Although consideration of the PFA in the lower chamber was done in tandem with the Lily Ledbetter Fair Pay Act, and both pieces of legislation were approved the same day, the quick turnaround of the Ledbetter Act in the Senate was not mirrored by progress on the companion bill. Instead, the PFA remains pending in the Senate where its future is uncertain.

The principal features of the PFA are:

• It revises the Equal Pay Act’s provisions for remedies, enforcement, and exceptions to prohibitions regarding sex discrimination in compensation.
• It modifies the “Bennett Amendment" proviso of both the EPA and Title VII; currently, differential compensation may lawfully be based on “any factor other than sex," but the PFA would limit this defense to “bona fide factors such as education, training or experience." The burden on the employer to establish this defense would be stringent. It would establish much greater protection against retaliation against employees who complain, or who inquire about, discuss or disclose compensation issues or actual data in response to a complaint or in connection with an internal or third-party investigation.
• It authorizes compensatory and punitive damages for violations of either law.
• It would amend Title VII to require the Equal Employment Opportunity Commission to collect pay information from employers regarding employees’ gender, race, and national origin as part of its investigation and enforcement of pay discrimination laws.

The ramifications of the PFA are of great significance to employers, and extend far beyond the issues dealt with in the Ledbetter Act. In fact, President Obama seemed a bit unclear on the distinction between the two bills; his remarks accompanying the signing of the Ledbetter Act addressed the theme of equal pay rather than focusing on the alteration of the statute of limitations. In fact, the message omitted any reference to the expansion of claims of pay discrimination which began long before the lodging of a complaint. The only aspect of the comments which would serve to differentiate the Ledbetter Act from its yet-to-be-enacted partner was the explanation that “it’s not just unfair and illegal, it’s bad for business to pay somebody less because of their gender or their age or their race or their ethnicity, religion or disability" – enumerating subjects not touched on in the PFA, which deals only with sex discrimination.

To read the rest of this client alert (printable version), click here.

Contacts:
Charlie Edwards: 336-721-3795