H.R. 1338, the Paycheck Fairness Act, amends the portion of the Fair Labor Standards Act of 1938 (FLSA) known as the Equal Pay Act to revise remedies for, enforcement of, and exceptions to prohibitions against sex discrimination in the payment of wages. It passed 256-163.
While touted by many, including the National Organization of Women, as necessary to protect women in the workplace, it will make it harder for employers to hire and pay women and men based upon their qualifications.
You're probably wondering how I, as a woman, can object to a law which is supposed to prevent me from being compensated differently because of my gender. But I look not at just how this could benefit me, but also how it could prove detrimental and/or burdensome to employers - which will make them NOT want to deal with the issue and maybe not hire me because of my gender.
The new law allows for civil penalties including both compensatory and punitive damages. The lawmakers, in their infinite wisdom however, exempted the federal government from the punitive damages. One rule for us - a more lenient rule for them.
It also allows the Secretary of Labor to seek additional compensatory and punitive damages in such actions. So now an employer can be penalized twice for the same action - once by the employee's lawsuit and a second time by the federal government.
The rules for defense against the claim were also tightened, pretty much ensuring that an employer spend tons of money just to provide a defense within the narrow constraints of the law.
"... the bill amends the broad affirmative defense previously available to employers that the pay differential in question is caused by a factor other than sex. Under the new legislation, an employer is required to show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity. An employee can rebut this claim by showing that there exists an alternative employment practice that would serve the same business purpose without resulting in the pay disparity, and that the employer has refused to adopt this alternative practice. It is this portion of the affirmative defense that will likely cause significant litigation, pitting the viability of an alternative work practice against the employer’s sound business discretion.
The Act also eliminates the “establishment” requirement that employees must work in the same place of employment for wage comparison purposes. Under this bill, an employer’s establishment would include workplaces located in the same county or similar political subdivision of a state."
When faced with such potential negative consequences from making a decision to pay a woman a different wage than a man who happens to work in the same area - or even in a different one, an employer will either chose an identical pay (thus negating the concept of being compensated for the value you provide the firm) or will seek men so they don't have to worry about the issue.
(Yes, I know it's not supposed to work that way, but it does. It's a simple matter of putting the price on the potential cost, something the private sector does on a regular basis that seems foreign to government.)
The problem is that the federal law has just interfered in my employment decisions. If I'm offered a position at a certain rate of pay and I accept that position, why would I suddenly be 'entitled' to more compensation just because another employee, who happens to be a man, has negotiated a better contract? If I'm more valuable to the company than the man, I can negotiate higher compensation based upon what I provide to the company. When government dictates the value of my services through mandated wages, it negates my ability to do something different. And I think I'm better than the government at negotiations.
The other piece of legislation was H.R.2831, the Lilly Ledbetter Fair Pay Act of 2007. Ledbetter, a 19-year veteran of Goodyear Tire & Rubber Co., sued the company when she learned that, for much of her career, male counterparts had been paid more for doing the same work. The case went all the way to the Supreme Court which ruled that she should have filed suit within 180 days of her first unfair paycheck, not 180 days from the time she learned of the difference in pay. They dismissed her case, ruling on the way the law was written, thus setting up the 'need' for Congress to change the law.
This bill, which passed 247-171, was to make that 'correction':
"Amends the Civil Rights Act of 1964 to declare that an unlawful employment practice occurs when: (1) a discriminatory compensation decision or other practice is adopted; (2) an individual becomes subject to the decision or practice; or (3) an individual is affected by application of the decision or practice, including each time compensation is paid. Accrues liability, and an aggrieved person may obtain relief including recovery of back pay for up to two years preceding the filing of the charge, where the unlawful employment practices that have occurred during the charge filing period are similar or related to practices that occurred outside the time for filing a charge. Applies the amendments of this paragraph to claims of compensation discrimination under the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973.
Amends the Age Discrimination in Employment Act of 1967 to declare that an unlawful practice occurs when a discriminatory compensation decision or other practice is adopted when a person becomes subject to the decision or other practice, or when a person is affected by the decision or practice, including each time compensation is paid."
The bill expressly states that an individual is affected by the discriminatory compensation decision or practice each time the individual receives a payment of wages, benefits, or other compensation. Thus, the applicable 180- or 300-day time period for filing an EEOC charge challenging an allegedly discriminatory compensation practice would begin to run anew with the receipt of each paycheck or benefit reimbursement check reflecting the discriminatory compensation action, no matter how long it has been since the discriminatory practice began.
Under the Lilly Ledbetter Fair Pay Act, employers could be scrutinized – and made liable for – acts and decisions made years earlier. Moreover, a worker or retiree could seek damages against a company run by employees and executives who had nothing to do with the initial act of alleged discrimination that occurred 5, 10, or even 20 years earlier. Trying to reconstruct ancient alleged acts of discrimination in order to defend these lawsuits could prove challenging for employers.
Don't misconstrue my position. Employers should not discriminate against me just because I happen to be a woman. Employers should compensate me based upon my contribution and value to the company - not because of, or in spite of, my gender. But both of these bills increase regulations on employers, increase the damages for violating the law, and increase the likelihood of lawsuits. They raise the costs and consequences of hiring women - and Congress thinks this is supposed to 'help'?
There are always unintended consequences of good intentions.