[House Report 117-13]
[From the U.S. Government Publishing Office]
117th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 117-13
======================================================================
PAYCHECK FAIRNESS ACT
_______
April 5, 2021.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Scott of Virginia, from the Committee on Education and Labor,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 7]
The Committee on Education and Labor, to whom was referred
the bill (H.R. 7) to amend the Fair Labor Standards Act of 1938
to provide more effective remedies to victims of discrimination
in the payment of wages on the basis of sex, and for other
purposes, having considered the same, reports favorably thereon
with an amendment and recommends that the bill as amended do
pass.
CONTENTS
Page
Purpose and Summary.............................................. 8
Committee Action................................................. 9
Committee Views.................................................. 18
Section-by-Section Analysis...................................... 41
Explanation of Amendments........................................ 44
Application of Law to the Legislative Branch..................... 45
Unfunded Mandate Statement....................................... 45
Earmark Statement................................................ 45
Roll Call Votes.................................................. 45
Statement of Performance Goals and Objectives.................... 48
Duplication of Federal Programs.................................. 48
Hearings......................................................... 48
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 48
New Budget Authority and CBO Cost Estimate....................... 48
Committee Cost Estimate.......................................... 48
Changes in Existing Law Made by the Bill, as Reported............ 49
Minority Views................................................... 67
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Paycheck Fairness Act''.
SEC. 2. ENHANCED ENFORCEMENT OF EQUAL PAY REQUIREMENTS.
(a) Definitions.--Section 3 of the Fair Labor Standards Act of 1938
(29 U.S.C. 203) is amended by adding at the end the following:
``(z) `Sex' includes--
``(1) a sex stereotype;
``(2) pregnancy, childbirth, or a related medical condition;
``(3) sexual orientation or gender identity; and
``(4) sex characteristics, including intersex traits.
``(aa) `Sexual orientation' includes homosexuality, heterosexuality,
and bisexuality.
``(bb) `Gender identity' means the gender-related identity,
appearance, mannerisms, or other gender-related characteristics of an
individual, regardless of the individual's designated sex at birth.''.
(b) Bona Fide Factor Defense and Modification of Same Establishment
Requirement.--Section 6(d)(1) of the Fair Labor Standards Act of 1938
(29 U.S.C. 206(d)(1)) is amended--
(1) by striking ``No employer having'' and inserting ``(A) No
employer having'';
(2) by striking ``any other factor other than sex'' and
inserting ``a bona fide factor other than sex, such as
education, training, or experience''; and
(3) by inserting at the end the following:
``(B) The bona fide factor defense described in subparagraph
(A)(iv) shall apply only if the employer demonstrates that such
factor (i) is not based upon or derived from a sex-based
differential in compensation; (ii) is job-related with respect
to the position in question; (iii) is consistent with business
necessity; and (iv) accounts for the entire differential in
compensation at issue. Such defense shall not apply where the
employee demonstrates that an alternative employment practice
exists that would serve the same business purpose without
producing such differential and that the employer has refused
to adopt such alternative practice.
``(C) For purposes of subparagraph (A), employees shall be
deemed to work in the same establishment if the employees work
for the same employer at workplaces located in the same county
or similar political subdivision of a State. The preceding
sentence shall not be construed as limiting broader
applications of the term `establishment' consistent with rules
prescribed or guidance issued by the Equal Employment
Opportunity Commission.''.
(c) Nonretaliation Provision.--Section 15 of the Fair Labor Standards
Act of 1938 (29 U.S.C. 215) is amended--
(1) in subsection (a)--
(A) in paragraph (3), by striking ``employee has
filed'' and all that follows and inserting ``employee--
``(A) has made a charge or filed any complaint or
instituted or caused to be instituted any
investigation, proceeding, hearing, or action under or
related to this Act, including an investigation
conducted by the employer, or has testified or is
planning to testify or has assisted or participated in
any manner in any such investigation, proceeding,
hearing or action, or has served or is planning to
serve on an industry committee;
``(B) has opposed any practice made unlawful by this
Act; or
``(C) has inquired about, discussed, or disclosed the
wages of the employee or another employee (such as by
inquiring or discussing with the employer why the wages
of the employee are set at a certain rate or
salary);'';
(B) in paragraph (5), by striking the period at the
end and inserting ``; or''; and
(C) by adding at the end the following:
``(6) to require an employee to sign a contract or waiver
that would prohibit the employee from disclosing information
about the employee's wages.''; and
(2) by adding at the end the following:
``(c) Subsection (a)(3)(C) shall not apply to instances in which an
employee who has access to the wage information of other employees as a
part of such employee's essential job functions discloses the wages of
such other employees to individuals who do not otherwise have access to
such information, unless such disclosure is in response to a complaint
or charge or in furtherance of an investigation, proceeding, hearing,
or action under section 6(d), including an investigation conducted by
the employer. Nothing in this subsection shall be construed to limit
the rights of an employee provided under any other provision of law.''.
(d) Enhanced Penalties.--Section 16(b) of the Fair Labor Standards
Act of 1938 (29 U.S.C. 216(b)) is amended--
(1) by inserting after the first sentence the following:
``Any employer who violates section 6(d), or who violates the
provisions of section 15(a)(3) in relation to a violation of
section 6(d), shall additionally be liable for such
compensatory damages, or, where the employee demonstrates that
the employer acted with malice or reckless indifference,
punitive damages as may be appropriate, except that the United
States shall not be liable for punitive damages.'';
(2) in the sentence beginning ``An action to'', by striking
``the preceding sentences'' and inserting ``any of the
preceding sentences of this subsection'';
(3) in the sentence beginning ``No employees shall'', by
striking ``No employees'' and inserting ``Except with respect
to class actions brought to enforce section 6(d), no
employee'';
(4) by inserting after the sentence referred to in paragraph
(3), the following: ``Notwithstanding any other provision of
Federal law, any action brought to enforce section 6(d) may be
maintained as a class action as provided by the Federal Rules
of Civil Procedure.''; and
(5) in the sentence beginning ``The court in''--
(A) by striking ``in such action'' and inserting ``in
any action brought to recover the liability prescribed
in any of the preceding sentences of this subsection'';
and
(B) by inserting before the period the following: ``,
including expert fees''.
(e) Action by the Secretary.--Section 16(c) of the Fair Labor
Standards Act of 1938 (29 U.S.C. 216(c)) is amended--
(1) in the first sentence--
(A) by inserting ``or, in the case of a violation of
section 6(d), additional compensatory or punitive
damages, as described in subsection (b),'' before ``and
the agreement''; and
(B) by inserting before the period the following: ``,
or such compensatory or punitive damages, as
appropriate'';
(2) in the second sentence, by inserting before the period
the following: ``and, in the case of a violation of section
6(d), additional compensatory or punitive damages, as described
in subsection (b)'';
(3) in the third sentence, by striking ``the first sentence''
and inserting ``the first or second sentence''; and
(4) in the sixth sentence--
(A) by striking ``commenced in the case'' and
inserting ``commenced--
``(1) in the case'';
(B) by striking the period and inserting ``; or'';
and
(C) by adding at the end the following:
``(2) in the case of a class action brought to enforce
section 6(d), on the date on which the individual becomes a
party plaintiff to the class action.''.
(f) Joint Enforcement Authority.--
(1) In general.--Notwithstanding section 1 of Reorganization
Plan No. 1 of 1978 (92 Stat. 3781; 5 U.S.C. App.) and any other
provision of law, the Secretary of Labor, acting through the
Office of Federal Contract Compliance Programs, and the Equal
Opportunity Employment Commission shall jointly carry out the
functions and authorities described in such section and any
other provision of law to enforce and administer the provisions
of section 6(d) of the Fair Labor Standards Act of 1938 (29
U.S.C. 206(d)) with respect to Federal contractors, Federal
subcontractors, and federally-assisted construction
contractors, within the jurisdiction of the Office of Federal
Contract Compliance Programs under Executive Order 11246 (42
U.S.C. 2000e note; relating to equal employment opportunity) or
a successor Executive Order.
(2) Coordination.--The Equal Opportunity Employment
Commission and the Secretary of Labor shall establish such
coordinating mechanisms as necessary to carry out the joint
authority under paragraph (1).
SEC. 3. TRAINING.
The Equal Employment Opportunity Commission and the Secretary of
Labor, acting through the Office of Federal Contract Compliance
Programs, subject to the availability of funds appropriated under
section 11, shall provide training to employees of the Commission and
the Office of Federal Contract Compliance Programs and to affected
individuals and entities on matters involving discrimination in the
payment of wages.
SEC. 4. NEGOTIATION SKILLS TRAINING.
(a) Program Authorized.--
(1) In general.--The Secretary of Labor, after consultation
with the Secretary of Education, is authorized to establish and
carry out a grant program.
(2) Grants.--In carrying out the program, the Secretary of
Labor may make grants on a competitive basis to eligible
entities to carry out negotiation skills training programs for
the purposes of addressing pay disparities, including through
outreach to women and girls.
(3) Eligible entities.--To be eligible to receive a grant
under this subsection, an entity shall be a public agency, such
as a State, a local government in a metropolitan statistical
area (as defined by the Office of Management and Budget), a
State educational agency, or a local educational agency, a
private nonprofit organization, or a community-based
organization.
(4) Application.--To be eligible to receive a grant under
this subsection, an entity shall submit an application to the
Secretary of Labor at such time, in such manner, and containing
such information as the Secretary of Labor may require.
(5) Use of funds.--An entity that receives a grant under this
subsection shall use the funds made available through the grant
to carry out an effective negotiation skills training program
for the purposes described in paragraph (2).
(b) Incorporating Training Into Existing Programs.--The Secretary of
Labor and the Secretary of Education shall issue regulations or policy
guidance that provides for integrating the negotiation skills training,
to the extent practicable, into programs authorized under--
(1) in the case of the Secretary of Education, the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.),
the Carl D. Perkins Career and Technical Education Act of 2006
(20 U.S.C. 2301 et seq.), the Higher Education Act of 1965 (20
U.S.C. 1001 et seq.), and other programs carried out by the
Department of Education that the Secretary of Education
determines to be appropriate; and
(2) in the case of the Secretary of Labor, the Workforce
Innovation and Opportunity Act (29 U.S.C. 3101 et seq.), and
other programs carried out by the Department of Labor that the
Secretary of Labor determines to be appropriate.
(c) Report.--Not later than 18 months after the date of enactment of
this Act, and annually thereafter, the Secretary of Labor, in
consultation with the Secretary of Education, shall prepare and submit
to Congress a report describing the activities conducted under this
section and evaluating the effectiveness of such activities in
achieving the purposes of this section.
SEC. 5. RESEARCH, EDUCATION, AND OUTREACH.
(a) In General.--Not later than 18 months after the date of enactment
of this Act, and periodically thereafter, the Secretary of Labor shall
conduct studies and provide information to employers, labor
organizations, and the general public concerning the means available to
eliminate pay disparities between men and women (including women who
are Asian American, Black or African-American, Hispanic American or
Latino, Native American or Alaska Native, Native Hawaiian or Pacific
Islander, and White American), including--
(1) conducting and promoting research to develop the means to
correct expeditiously the conditions leading to the pay
disparities, with specific attention paid to women and girls
from historically underrepresented and minority groups;
(2) publishing and otherwise making available to employers,
labor organizations, professional associations, educational
institutions, the media, and the general public the findings
resulting from studies and other materials, relating to
eliminating the pay disparities;
(3) sponsoring and assisting State, local, and community
informational and educational programs;
(4) providing information to employers, labor organizations,
professional associations, and other interested persons on the
means of eliminating the pay disparities; and
(5) recognizing and promoting the achievements of employers,
labor organizations, and professional associations that have
worked to eliminate the pay disparities.
(b) Report on Gender Pay Gap in Teenage Labor Force.--
(1) Report required.--Not later than one year after the date
of the enactment of this Act, the Secretary of Labor, acting
through the Director of the Women's Bureau and in coordination
with the Commissioner of Labor Statistics, shall--
(A) submit to Congress a report on the gender pay gap
in the teenage labor force; and
(B) make the report available on a publicly
accessible website of the Department of Labor.
(2) Elements.--The report under subsection (a) shall include
the following:
(A) An examination of trends and potential solutions
relating to the teenage gender pay gap.
(B) An examination of how the teenage gender pay gap
potentially translates into greater wage gaps in the
overall labor force.
(C) An examination of overall lifetime earnings and
losses for informal and formal jobs for women,
including women of color.
(D) An examination of the teenage gender pay gap,
including a comparison of the average amount earned by
males and females, respectively, in informal jobs, such
as babysitting and other freelance jobs, as well as
formal jobs, such as retail, restaurant, and customer
service.
(E) A comparison of--
(i) the types of tasks typically performed by
women from the teenage years through adulthood
within certain informal jobs, such as
babysitting and other freelance jobs, and
formal jobs, such as retail, restaurant, and
customer service; and
(ii) the types of tasks performed by younger
males in such positions.
(F) Interviews and surveys with workers and employers
relating to early gender-based pay discrepancies.
(G) Recommendations for--
(i) addressing pay inequality for women from
the teenage years through adulthood, including
such women of color;
(ii) addressing any disadvantages experienced
by young women with respect to work experience
and professional development;
(iii) the development of standards and best
practices for workers and employees to ensure
better pay for young women and the prevention
of early inequalities in the workplace; and
(iv) expanding awareness for teenage girls on
pay rates and employment rights in order to
reduce greater inequalities in the overall
labor force.
SEC. 6. ESTABLISHMENT OF THE NATIONAL AWARD FOR PAY EQUITY IN THE
WORKPLACE.
(a) In General.--There is established the National Award for Pay
Equity in the Workplace, which shall be awarded by the Secretary of
Labor in consultation with the Equal Employment Opportunity Commission,
on an annual basis, to an employer to encourage proactive efforts to
comply with section 6(d) of the Fair Labor Standards Act of 1938 (29
U.S.C. 206(d)), as amended by this Act.
(b) Criteria for Qualification.--The Secretary of Labor, in
consultation with the Equal Employment Opportunity Commission, shall--
(1) set criteria for receipt of the award, including a
requirement that an employer has made substantial effort to
eliminate pay disparities between men and women and deserves
special recognition as a consequence of such effort; and
(2) establish procedures for the application and presentation
of the award.
(c) Business.--In this section, the term ``employer'' includes--
(1)(A) a corporation, including a nonprofit corporation;
(B) a partnership;
(C) a professional association;
(D) a labor organization; and
(E) a business entity similar to an entity described in any
of subparagraphs (A) through (D);
(2) an entity carrying out an education referral program, a
training program, such as an apprenticeship or management
training program, or a similar program; and
(3) an entity carrying out a joint program, formed by a
combination of any entities described in paragraph (1) or (2).
SEC. 7. COLLECTION OF PAY INFORMATION BY THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION.
Section 709 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-8) is
amended by adding at the end the following:
``(f)(1) Not later than 18 months after the date of enactment of this
subsection, the Commission shall provide for the collection from
employers of compensation data and other employment-related data
(including hiring, termination, and promotion data) disaggregated by
the sex, race, and national origin of employees.
``(2) In carrying out paragraph (1), the Commission shall have as its
primary consideration the most effective and efficient means for
enhancing the enforcement of Federal laws prohibiting pay
discrimination. For this purpose, the Commission shall consider factors
including the imposition of burdens on employers, the frequency of
required reports (including the size of employers required to prepare
reports), appropriate protections for maintaining data confidentiality,
and the most effective format to report such data.
``(3)(A) For each 12-month reporting period for an employer, the
compensation data collected under paragraph (1) shall include, for each
range of taxable compensation described in subparagraph (B),
disaggregated by the categories described in subparagraph (E)--
``(i) the number of employees of the employer who earn
taxable compensation in an amount that falls within such
taxable compensation range; and
``(ii) the total number of hours worked by such employees.
``(B) Subject to adjustment under subparagraph (C), the taxable
compensation ranges described in this subparagraph are as follows:
``(i) Not more than $19,239.
``(ii) Not less than $19,240 and not more than $24,439.
``(iii) Not less than $24,440 and not more than $30,679.
``(iv) Not less than $30,680 and not more than $38,999.
``(v) Not less than $39,000 and not more than $49,919.
``(vi) Not less than $49,920 and not more than $62,919.
``(vii) Not less than $62,920 and not more than $80,079.
``(viii) Not less than $80,080 and not more than $101,919.
``(ix) Not less than $101,920 and not more than $128,959.
``(x) Not less than $128,960 and not more than $163,799.
``(xi) Not less than $163,800 and not more than $207,999.
``(xii) Not less than $208,000.
``(C) The Commission may adjust the taxable compensation ranges under
subparagraph (B)--
``(i) if the Commission determines that such adjustment is
necessary to enhance enforcement of Federal laws prohibiting
pay discrimination; or
``(ii) for inflation, in consultation with the Bureau of
Labor Statistics.
``(D) In collecting data described in subparagraph (A)(ii), the
Commission shall provide that, with respect to an employee who the
employer is not required to compensate for overtime employment under
section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207), an
employer may report--
``(i) in the case of a full-time employee, that such employee
works 40 hours per week, and in the case of a part-time
employee, that such employee works 20 hours per week; or
``(ii) the actual number of hours worked by such employee.
``(E) The categories described in this subparagraph shall be
determined by the Commission and shall include--
``(i) race;
``(ii) national origin;
``(iii) sex; and
``(iv) job categories, including the job categories described
in the instructions for the Equal Employment Opportunity
Employer Information Report EEO-1, as in effect on the date of
the enactment of this subsection.
``(F) The Commission shall use the compensation data collected under
paragraph (1)--
``(i) to enhance--
``(I) the investigation of charges filed under
section 706 or section 6(d) of the Fair Labor Standards
Act of 1938 (29 U.S.C. 206(d)); and
``(II) the allocation of resources to investigate
such charges; and
``(ii) for any other purpose that the Commission determines
appropriate.
``(G) The Commission shall annually make publicly available aggregate
compensation data collected under paragraph (1) for the categories
described in subparagraph (E), disaggregated by industry, occupation,
and core based statistical area (as defined by the Office of Management
and Budget).
``(4) The compensation data under paragraph (1) shall be collected
from each employer that--
``(A) is a private employer that has 100 or more employees,
including such an employer that is a contractor with the
Federal Government, or a subcontractor at any tier thereof; or
``(B) the Commission determines appropriate.''.
SEC. 8. REINSTATEMENT OF PAY EQUITY PROGRAMS AND PAY EQUITY DATA
COLLECTION.
(a) Bureau of Labor Statistics Data Collection.--The Commissioner of
Labor Statistics shall continue to collect data on women workers in the
Current Employment Statistics survey.
(b) Office of Federal Contract Compliance Programs Initiatives.--The
Director of the Office of Federal Contract Compliance Programs shall
collect compensation data and other employment-related data (including,
hiring, termination, and promotion data) by demographics and designate
not less than half of all nonconstruction contractors each year to
prepare and file such data, and shall review and utilize the responses
to such data to identify contractors for further evaluation and for
other enforcement purposes as appropriate.
(c) Department of Labor Distribution of Wage Discrimination
Information.--The Secretary of Labor shall make readily available (in
print, on the Department of Labor website, and through any other forum
that the Department may use to distribute compensation discrimination
information), accurate information on compensation discrimination,
including statistics, explanations of employee rights, historical
analyses of such discrimination, instructions for employers on
compliance, and any other information that will assist the public in
understanding and addressing such discrimination.
SEC. 9. PROHIBITIONS RELATING TO PROSPECTIVE EMPLOYEES' SALARY AND
BENEFIT HISTORY.
(a) In General.--The Fair Labor Standards Act of 1938 (29 U.S.C. 201
et seq.) is amended by inserting after section 7 the following new
section:
``SEC. 8. REQUIREMENTS AND PROHIBITIONS RELATING TO WAGE, SALARY, AND
BENEFIT HISTORY.
``(a) In General.--It shall be an unlawful practice for an employer
to--
``(1) rely on the wage history of a prospective employee in
considering the prospective employee for employment, including
requiring that a prospective employee's prior wages satisfy
minimum or maximum criteria as a condition of being considered
for employment;
``(2) rely on the wage history of a prospective employee in
determining the wages for such prospective employee, except
that an employer may rely on wage history if it is voluntarily
provided by a prospective employee, after the employer makes an
offer of employment with an offer of compensation to the
prospective employee, to support a wage higher than the wage
offered by the employer;
``(3) seek from a prospective employee or any current or
former employer the wage history of the prospective employee,
except that an employer may seek to confirm prior wage
information only after an offer of employment with compensation
has been made to the prospective employee and the prospective
employee responds to the offer by providing prior wage
information to support a wage higher than that offered by the
employer; or
``(4) discharge or in any other manner retaliate against any
employee or prospective employee because the employee or
prospective employee--
``(A) opposed any act or practice made unlawful by
this section; or
``(B) took an action for which discrimination is
forbidden under section 15(a)(3).
``(b) Definition.--In this section, the term `wage history' means the
wages paid to the prospective employee by the prospective employee's
current employer or previous employer.''.
(b) Penalties.--Section 16 of such Act (29 U.S.C. 216) is amended by
adding at the end the following new subsection:
``(f)(1) Any person who violates the provisions of section 8 shall--
``(A) be subject to a civil penalty of $5,000 for a first
offense, increased by an additional $1,000 for each subsequent
offense, not to exceed $10,000; and
``(B) be liable to each employee or prospective employee who
was the subject of the violation for special damages not to
exceed $10,000 plus attorneys' fees, and shall be subject to
such injunctive relief as may be appropriate.
``(2) An action to recover the liability described in paragraph
(1)(B) may be maintained against any employer (including a public
agency) in any Federal or State court of competent jurisdiction by any
one or more employees or prospective employees for and on behalf of--
``(A) the employees or prospective employees; and
``(B) other employees or prospective employees similarly
situated.''.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
(a) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this Act.
(b) Prohibition on Earmarks.--None of the funds appropriated pursuant
to subsection (a) for purposes of the grant program in section 5 of
this Act may be used for a congressional earmark as defined in clause
9(e) of rule XXI of the Rules of the House of Representatives.
SEC. 11. SMALL BUSINESS ASSISTANCE.
(a) Effective Date.--This Act and the amendments made by this Act
shall take effect on the date that is 6 months after the date of
enactment of this Act.
(b) Technical Assistance Materials.--The Secretary of Labor and the
Commissioner of the Equal Employment Opportunity Commission shall
jointly develop technical assistance material to assist small
enterprises in complying with the requirements of this Act and the
amendments made by this Act.
(c) Small Businesses.--A small enterprise shall be exempt from the
provisions of this Act, and the amendments made by this Act, to the
same extent that such enterprise is exempt from the requirements of the
Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) pursuant to
clauses (i) and (ii) of section 3(s)(1)(A) of such Act (29 U.S.C.
203(s)(1)(A)).
SEC. 12. RULE OF CONSTRUCTION.
Nothing in this Act, or in any amendments made by this Act, shall
affect the obligation of employers and employees to fully comply with
all applicable immigration laws, including being subject to any
penalties, fines, or other sanctions.
SEC. 13. SEVERABILITY.
If any provision of this Act, an amendment made by this Act, or the
application of that provision or amendment to particular persons or
circumstances is held invalid or found to be unconstitutional, the
remainder of this Act, the amendments made by this Act, or the
application of that provision to other persons or circumstances shall
not be affected.
Purpose
When President John F. Kennedy signed the Equal Pay Act of
1963 (EPA) into law, he observed that the statute ``adds to our
laws another structure basic to democracy'' and ``affirms our
determination that when women enter the labor force, they will
find equality in their pay envelope.''\1\ Fifty-eight years
later, women have made tremendous progress in the workplace.
Women comprise almost half of this country's workforce and own
more than 11 million businesses.\2\ Despite these gains, women
continue to be held back by wage discrimination. Because of
loopholes in the law and weak sanctions for violations, the EPA
is ineffective in combating unequal pay. Women working full
time, year-round typically are paid 82 cents for every dollar
earned by a man.\3\ H.R. 7, the Paycheck Fairness Act (the
Act), modernizes the EPA and brings the country one step closer
to ensuring that women receive equal pay for equal work.
---------------------------------------------------------------------------
\1\Remarks Upon Signing the Equal Pay Act, The American Presidency
Project, https://www.presidency.ucsb.edu/documents/remarks-upon-
signing-the-equal-pay-act (last visited Mar. 25, 2021).
\2\Employment Status of the Civilian Population by Sex and Age,
Bureau of Labor Statistics, https://www.bls.gov/news.release/
empsit.t01.htm (last visited Mar. 25, 2021); see also Am. Express, The
2018 State of Women-Owned Businesses Report 3 (2018), https://
about.americanexpress.com/files/doc_library/file/2018-state-of-women-
owned-businesses-report.pdf.
\3\Am. Ass'n of Univ. Women, The Simple Truth about the Gender Pay
Gap 2020 Update 2 (2020), https://www.aauw.org/app/uploads/2020/12/
SimpleTruth_2.1.pdf.
---------------------------------------------------------------------------
The long-term impact of pay disparity on women's lifetime
earnings is substantial, costing a woman anywhere from
$400,000\4\ to $2 million\5\ over the course of her career.
H.R. 7 will strengthen the EPA to make it a more effective
means to combat wage discrimination on the basis of gender.
Specifically, the Act builds upon the EPA and closes loopholes
that have enabled unscrupulous employers to evade liability
under the law. The Act prohibits retaliation against workers
who discuss or disclose salary information; prohibits relying
on pay history in considering an individual for prospective
employment; expands the definition of ``establishment'' so that
an employee can find a comparator at any workplace in the same
county or political subdivision; clarifies that an employer's
affirmative defense of ``any factor other than sex'' must be
related to the job in question and consistent with business
necessity; reforms the EPA's collective action standard so that
women with claims of unequal pay will automatically be part of
a class action lawsuit unless they choose to ``opt-out'' of the
case; equalizes damages for discrimination based on sex with
damages for discrimination based on race and national origin;
and authorizes the U.S. Department of Labor (Department of
Labor) to award competitive grants to be used for salary
negotiation education and training programs. The Act amends
Title VII of the Civil Rights Act of 1964 (Title VII) to expand
the Equal Employment Opportunity Commission's (EEOC) authority
to collect pay data from certain employers in addition to data
already collected from employers on employment by race, gender,
and national origin.\6\ This will help employers and the
relevant enforcement agencies identify unknown gender-based pay
discrimination. The Act also strengthens the role government
will play in combating wage discrimination. The Act authorizes
additional training for EEOC and OFCCP staff on recognizing and
remedying wage discrimination; codifies the Bureau of Labor
Statistics' collection of data on female workers that compares
them to their male counterparts as part of the Current
Employment Statistics survey; and requires the Department of
Labor to collect employment and pay data from federal
contractors.
---------------------------------------------------------------------------
\4\Nat'l Women's Law Ctr., The Wage Gap: The Who, How, Why and What
to Do 2 (2020), https://nwlc.org/resources/the-wage-gap-the-who-how-
why-and-what-to-do/.
\5\The Wage Gap Over Time: In Real Dollars, Women See a Counting
Gap, National Committee on Pay Equity, https://www.pay-equity.org/info-
time.html (last visited Mar. 25, 2021).
\6\Based on the number of employees and federal contract
activities, certain employers are required to file an EEO-1 report on
an annual basis under the EEOC and the OFCCP regulations.
---------------------------------------------------------------------------
Committee Action
105TH CONGRESS
Senator Thomas Daschle (D-SD) first introduced S. 71, the
Paycheck Fairness Act, on January 21, 1997. The bill had 23
cosponsors and was referred to the Senate Committee on Labor
and Human Resources. Congresswoman Rosa DeLauro (D-CT-3)
introduced H.R. 2023, the Paycheck Fairness Act, on June 24,
1997. The bill had 95 cosponsors and was referred to the House
Committee on Education and the Workforce. H.R. 2023 was then
referred to the Subcommittees on Workforce Protections and
Employer-Employee Relations. No further action was taken on
either bill.
106TH CONGRESS
Senator Daschle introduced S. 74, the Paycheck Fairness
Act, on January 19, 1999. The bill had 31 cosponsors and was
referred to the Senate Committee on Health, Education, Labor,
and Pensions. The Senate Committee on Health, Education, Labor,
and Pensions held a hearing on gender-based wage discrimination
on June 8, 2000. The hearing, entitled ``Examining the Bureau
of Labor Statistics Report Which Provides a Full Picture of the
Gender-Based Wage Gap, the Reasons for These Gaps and the
Impact This Discrimination Has on Women and Families, and the
Effectiveness of Current Laws and Proposed Legislative
Solutions, and S. 74, to Amend the Fair Labor Standards Act of
1938 to Provide More Effective Remedies to Victims of
Discrimination in the Payment of Wages on the Basis of Sex,''
featured testimony from Dr. Katherine Abraham, Commissioner,
Bureau of Labor Statistics; Dr. June O'Neill, Professor of
Economics and Finance, Baruch College, Zicklin School of
Business; Dr. Heidi Hartmann, Director, Institute for Women's
Policy Research; Anita Hattiangadi, Economist, Employment
Policy Foundation; Barbara Berish Brown, Partner, Paul,
Hastings, Janofsky & Walker, LLP; Judith Applebaum, Vice
President and Director of Employment Opportunities, National
Women's Law Center; and Gail Shaffer, Chief Executive Officer,
Business and Professional Women/USA. Testimony was submitted
for the record by Irasema Garza, Director, Women's Bureau, U.S.
Department of Labor.
Congresswoman DeLauro introduced H.R. 541, the Paycheck
Fairness Act, on February 3, 1999. The bill had 122 cosponsors
and was referred to the House Committee on Education and the
Workforce. Once in committee, the bill was referred to the
Subcommittees on Workforce Protections and Employer-Employee
Relations. Congresswoman DeLauro introduced an updated version
of the bill as H.R. 2397 on June 30, 1999, with 170 cosponsors
(166 Democrats, 3 Republicans, and 1 Independent). The bill was
referred only to the Subcommittee on Workforce Protections. No
further action was taken on either bill.
107TH CONGRESS
Senator Daschle introduced S. 77, the Paycheck Fairness
Act, on January 22, 2001. The bill had 32 cosponsors and was
referred to the Senate Committee on Health, Education, Labor,
and Pensions. Congresswoman DeLauro introduced H.R. 781, the
Paycheck Fairness Act, on February 22, 2001. The bill had 196
cosponsors and was referred to the House Committee on Education
and the Workforce. Once in committee, it was referred to the
Subcommittees on Workforce Protections and Employer-Employee
Relations. No further action was taken on either bill.
108TH CONGRESS
Senator Daschle introduced S. 76, the Paycheck Fairness
Act, on January 7, 2003. The bill had 20 cosponsors and was
referred to the Senate Committee on Health, Education, Labor,
and Pensions. Congresswoman DeLauro introduced H.R. 1688, the
Paycheck Fairness Act, on April 9, 2003. The bill had 116
cosponsors and was referred to the House Committee on Education
and the Workforce. The committee referred it to the
Subcommittees on Workforce Protections and Employer-Employee
Relations. No further action was taken on either bill.
109TH CONGRESS
On April 19, 2005, Senator Hillary Rodham Clinton (D-NY)
and Congresswoman DeLauro introduced the Paycheck Fairness Act,
S. 841 and H.R. 1687, respectively. S. 841 had 18 cosponsors
and was referred to the Senate Committee on Health, Education,
Labor, and Pensions. H.R. 1687 had 111 cosponsors and was
referred to the House Committee on Education and the Workforce,
where it was referred to the Subcommittees on Workforce
Protections and Employer-Employee Relations. No further action
was taken on either bill.
110TH CONGRESS
On March 6, 2007, Senator Clinton and Congresswoman DeLauro
introduced the Paycheck Fairness Act, S. 766 and H.R. 1338,
respectively. S. 766 had 24 cosponsors and was referred to the
Senate Committee on Health, Education, Labor, and Pensions.
H.R. 1338 had 230 cosponsors and was referred to the House
Committee on Education and Labor, where it was referred to the
Subcommittee on Workforce Protections.
On Thursday, April 12, 2007, the Senate Committee on
Health, Education, Labor, and Pensions held a hearing entitled
``Closing the Gap: Equal Pay for Women Workers.'' The hearing
examined enforcement of the EPA, the Fair Pay Act and the
Paycheck Protection Act. At the hearing, the following people
presented testimony: Evelyn Murphy, President, WAGE Project,
Inc. and Resident Scholar of the Women's Research Center at
Brandeis University; Jocelyn Samuels, Vice-President for
Education and Employment at the National Women's Law Center;
Dr. Philip Cohen, Associate Professor and Director of Graduate
Studies for the Department of Sociology at the University of
North Carolina; and Barbara Brown, Attorney at Paul Hastings.
On Tuesday, April 24, 2007, the House Committee on
Education and Labor held a hearing entitled ``Strengthening the
Middle Class: Ensuring Equal Pay for Women.'' The hearing
examined the scope and causes of gender-based wage disparity.
Witnesses included Congresswoman DeLauro; Congresswoman Eleanor
Holmes Norton (D-D.C.); Catherine Hill, Research Director for
the American Association of University Women; Heather Boushey,
Senior Economist at the Center for Economic and Policy
Research; Dedra Farmer, Plaintiff in the Wal-Mart sex-
discrimination class-action lawsuit\7\; and Diana Furchtgott-
Roth, Director of the Center for Employment Policy at the
Hudson Institute.
---------------------------------------------------------------------------
\7\Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137, 141-42 (N.D.
Cal. 2004).
---------------------------------------------------------------------------
On Wednesday, July 11, 2007, the House Education and Labor
Subcommittee on Workforce Protections held a hearing titled
``H.R. 1338, The Paycheck Fairness Act.'' The hearing focused
on the wage disparity that exists from the moment men and women
enter the workforce--a gap that only grows over time.\8\
Witnesses included Evelyn Murphy, President, WAGE Project, Inc.
and Resident Scholar of the Women's Research Center at Brandeis
University; Joseph Sellers, Partner with the law firm of Cohen,
Milstein, Hausfeld & Toll, PLLC; Marcia Greenberger, Co-
President of the National Women's Law Center; and Camille A.
Olson, Partner at Seyfarth Shaw, LLP.
---------------------------------------------------------------------------
\8\The Paycheck Fairness Act: Hearing on H.R. 1338 Before H.
Subcomm. on Workforce Prots. of the H. Comm. on Educ. and Labor, 110th
Cong. (2007) (statement of Rep. Lynn Woolsey, Chairwoman, Subcomm. on
Workforce Protections).
---------------------------------------------------------------------------
On Thursday, July 24, 2008, the Committee on Education and
Labor met for a full committee markup of H.R. 1338. The
Committee adopted by voice vote an amendment in the nature of a
substitute offered by Congressman George Miller (D-CA-7),
Chairman, and ordered the bill, as amended, be favorably
reported to the House of Representatives by a vote of 26-17.
On July 31, 2008, the House debated and passed H.R. 1338
with a recorded vote of 247-178.
111TH CONGRESS
On January 8, 2009, Senator Clinton introduced S. 182, the
Paycheck Fairness Act. The bill had 42 cosponsors (41 Democrats
and 1 Independent). On March 11, 2010, the Committee on Health,
Education, Labor, and Pensions held a hearing entitled ``A Fair
Share for All: Pay Equity in the New American Workplace.''
Witnesses included Congresswoman DeLauro; Commissioner Stuart
Ishimaru, Acting Chairman, Equal Opportunity Commission;
Heather Boushey, Senior Economist, Center for American
Progress; Deborah L. Brake, Professor of Law, University of
Pittsburgh; Deborah L. Frett, Chief Executive Officer, Business
and Professional Women's Foundation; and Jane McFetridge,
Partner, Jackson Lewis, LLP.
On September 13, 2010, Senator Harry Reid (D-NV) re-
introduced the Paycheck Fairness Act as S. 3772. On September
14, 2010, the bill was placed on the Senate Legislative
Calendar. On September 29, 2010, Senator Reid filed a motion to
proceed to consideration; he withdrew the motion on the same
day. On November 17, 2010, Senator Reid filed a motion a motion
to proceed; cloture on the motion to proceed on the bill was
not invoked by a Yea-Nay vote of 58-41. No further action was
taken on either Senate version of the Paycheck Fairness Act.
On January 6, 2009, Congresswoman DeLauro introduced H.R.
12, the Paycheck Fairness Act with 200 cosponsors. The bill was
referred to the House Committee on Education and Labor, where
it was referred to the Subcommittee on Workforce Protections.
On January 9, 2009, the House of Representatives passed the
Paycheck Fairness Act as a part of H.R. 11, the Lilly Ledbetter
Fair Pay Act of 2009, with a recorded vote of 256-163. However,
the Paycheck Fairness Act was not included in the final version
of the Lilly Ledbetter Fair Pay Act of 2009, which was signed
into law (Pub. L. No. 111-2) on January 29, 2009.
112TH CONGRESS
On April 12, 2011, Senator Barbara Mikulski (D-MD)
introduced S. 797, the Paycheck Fairness Act. The bill had 36
cosponsors (35 Democrats and 1 Independent) and was referred to
the Senate Committee on Health, Education, Labor, and Pensions.
On May 22, 2012, Senator Mikulski re-introduced the Paycheck
Fairness Act as S. 3220 with 37 cosponsors (36 Democrats and 1
Independent). On June 5, 2012, Senator Reid filed a motion to
proceed to consideration on S. 3220. Cloture was not invoked by
Yea-Nay vote of 52-47. Senator Reid filed a motion to
reconsider the vote, but the motion was withdrawn later that
day. No further action was taken on any of the three bills.
On April 13, 2011, Congresswoman DeLauro introduced H.R.
1519, the Paycheck Fairness Act. It had 197 Democratic
cosponsors and was referred to the House Committee on Education
and the Workforce, where it was referred to the Subcommittee on
Workforce Protections.
113TH CONGRESS
On January 23, 2013, Senator Mikulski introduced S. 84, the
Paycheck Fairness Act with 56 cosponsors (55 Democrats and 1
Independent). The bill was referred to the Senate Committee on
Health, Education, Labor, and Pensions. On April 1, 2014, the
Senate Committee on Health, Education, Labor, and Pensions held
a hearing entitled ``Access to Justice: Ensuring Equal Pay with
the Paycheck Fairness Act.'' The hearing featured testimony
from Professor Deborah Thompson Eisenberg, Associate Professor
of Law, University of Maryland Francis King Carey School of
Law; ReShonda Young, Operations Manager, Alpha Express, Inc.;
Kerri Sleeman, Mechanical Engineer, Houton; and Camille A.
Olson, Partner, Seyfarth Shaw, LLP.
On April 1, 2014, Senator Mikulski re-introduced the
Paycheck Fairness Act as S. 2199 with 42 cosponsors (41
Democrats and 1 Independent). On April 7, Senator Reid filed a
motion to proceed to consideration of the measure, but cloture
was not invoked by a Yea-Nay vote of 53-44. On September 9,
2014, Senator Reid motioned to reconsider the vote, which was
agreed to by voice vote on September 10, 2014. The same day,
cloture on the motion to proceed to the measure was invoked in
the Senate by a Yea-Nay vote of 73-25, and the measure was laid
before the Senate. On September 15, 2014 the cloture motion
failed by a Yea-Nay vote of 52-40. No further action was taken
on any of the bills.
On January 23, 2013, Congresswoman DeLauro introduced H.R.
377, the Paycheck Fairness Act. It had 208 cosponsors (207
Democrats and 1 Republican). The bill was referred to the House
Committee on Education and the Workforce. On April 11, 2013,
Congresswoman DeLauro filed a motion to discharge the Committee
from consideration of H.R. 377. The discharge petition received
197 signatures, fewer than the 218 signatures needed for
further action. On April 23, 2013, the bill was referred to the
Subcommittee on Workforce Protections. No further action was
taken.
114TH CONGRESS
On March 25, 2015, Senator Mikulski and Congresswoman
DeLauro introduced the Paycheck Fairness Act, S. 862 and H.R.
1619, respectively. S. 862 had 44 cosponsors (43 Democrats and
1 Independent) and was referred to the Senate Committee on
Health, Education, Labor, and Pensions. H.R. 1619 had 193
cosponsors (192 Democrats and 1 Republican). The bill was
referred to the House Committee on Education and the Workforce,
where it was referred to the Subcommittee on Workforce
Protections. No further action was taken on either bill.
115TH CONGRESS
On April 4, 2017, Senator Murray and Congresswoman DeLauro
and introduced the Paycheck Fairness Act, S. 819 and H.R. 1869,
respectively. S. 819 had 48 cosponsors (47 Democrats and 1
Independent) and was referred to the Senate Committee on
Health, Education, Labor, and Pensions. H.R. 1869 had 201
cosponsors (200 Democrats and 1 Republican) and was referred to
the House Committee on Education and the Workforce. No further
action was taken on either bill.
116TH CONGRESS
On January 30, 2019, Senator Murray introduced, S. 270, the
Paycheck Fairness Act, with 45 cosponsors. The bill was
referred to the Senate Committee on Health, Education, Labor,
and Pensions.
On January 30, 2019, Congresswoman DeLauro introduced H.R.
7, the Paycheck Fairness Act with 239 original co-sponsors,
including 1 Republican. The bill was referred to the House
Committee on Education and Labor. On February 13, 2019, the
House Committee on Education and Labor held a joint hearing in
the Subcommittee on Workforce Protections and the Subcommittee
on Civil Rights and Human Services (2019 Joint Subcommittee
Hearing) entitled ``Paycheck Fairness Act (H.R. 7): Equal Pay
for Equal Work.'' The Committee heard testimony on how the
weaknesses in the EPA have left the law ineffective in
preventing gender-based wage discrimination. Witnesses included
Congresswoman DeLauro; Congresswoman Holmes Norton; Congressman
Beyer; Fatima Goss Graves, CEO and President of the National
Women's Law Center; Camille A. Olson, Partner at Seyfarth Shaw,
LLP; Kristin Rowe-Finkbeiner, CEO of Moms Rising; and Jenny
Yang, Partner at Working Ideal.
On February 26, 2019, the House Committee on Education and
Labor met for a full committee markup of H.R. 7, the Paycheck
Fairness Act. The Committee adopted an amendment in the nature
of a substitute (ANS) offered by Congressman Robert C.
``Bobby'' Scott (D-VA-3), Chairman, and reported the bill
favorably, as amended, to the House of Representatives by a
vote of 27-19. H.R. 7 then passed the House on March 27, 2019,
with bipartisan support by a vote of 242 Yeas and 187 Nays.
117TH CONGRESS
On January 28, 2021, Congresswoman DeLauro introduced H.R.
7, the Paycheck Fairness Act, with 224 original co-sponsors
(including 2 Republicans). The bill was referred to the House
Committee on Education and Labor. On March 18, 2021, the House
Committee on Education and Labor held a joint hearing in the
Subcommittee on Workforce Protections and the Subcommittee on
Civil Rights and Human Services (2021 Joint Subcommittee
Hearing) entitled ``Fighting for Fairness: Examining
Legislation to Confront Workplace Discrimination.'' The
Committee heard testimony on how the weaknesses in the EPA have
left the law ineffective in preventing gender-based wage
discrimination. Witnesses included Fatima Goss Graves, CEO and
President of the National Women's Law Center, Washington, DC;
Camille A. Olson, Partner at Seyfarth Shaw, LLP, Chicago, IL;
Dina Bakst, Co-Founder & Co-President, A Better Balance: The
Work & Family Legal Center, New York City, NY; and Laurie
McCann, Senior Attorney, AARP, Washington, DC.
On February 3, 2021, Senator Murray introduced S. 205, the
Paycheck Fairness Act, with 49 cosponsors. The bill was
referred to the Senate Committee on Health, Education, Labor,
and Pensions.
On March 24, 2021, the House Committee on Education and
Labor met for a full committee markup of H.R. 7, the Paycheck
Fairness Act. The Committee adopted an amendment in the nature
of a substitute (ANS) offered by Congresswoman Suzanne Bonamici
(D-OR-1), and reported the bill favorably, as amended, to the
House of Representatives by a vote of 25 Yeas and 22 Nays.
The ANS incorporates the provisions of H.R. 7 with the
following modifications:
Removes the bill's findings section;
Updates the EPA's definition of sex to
include sexual orientation and gender identity;
Strengthens the nonretaliation provisions by
ensuring that workers cannot be retaliated against for
opposing unlawful pay discrimination and by authorizing
compensatory and punitive damages;
Ensures that both the EEOC and the Office of
Federal Contractor Compliance (OFCCP) in the U.S.
Department of Labor (DOL) have joint enforcement
authority over the Equal Pay Act with respect to
federal contractors;
Clarifies that the EEOC and the OFCCP
coordinate in the establishment of the national award
for pay equity in the workplace; and
Modernizes the OFCCP's pay data collection
requirement.
A substitute amendment was offered by Congresswoman Elise
Stefanik (R-NY-21) to: amend the EPA's employer defense of
``any factor other than sex'' with a vague and legally
ambiguous standard; provide employers with a liability shield
to EPA claims if they conduct self-audits; restrict employer
reliance on prospective employees' salary history but allow the
employer to rely on salary history at any time in the hiring
process if a prospective employee self-discloses; and authorize
negotiation skills training grants. The amendment failed by a
vote of 19 Yeas and 28 Nays.
Summary
Neither the EPA nor Title VII is sufficient in their
current forms to provide protection against illegal wage
inequality. The EPA prohibits gender-based wage discrimination
between men and women in the same establishment who perform
jobs that require substantially equal skill, effort, and
responsibility under similar working conditions. Under the EPA,
an aggrieved person has two years (or three years in a case of
a willful violation) from the date of any instance of unequal
pay to file a claim in court.\9\ Under the EPA, there is no
requirement to seek any remedies through the EEOC first. A
plaintiff does not bear the burden of proving that the employer
intentionally committed wage-based gender discrimination, but
employers have a very broad business necessity defense for
``factors other than sex.'' A plaintiff who successfully proves
wage discrimination under the EPA can recover back pay, and the
EPA also provides for liquidated damages in an amount equal to
back pay, unless the employer can show that it acted in good
faith and it had reasonable grounds to believe that its actions
did not violate the EPA.\10\
---------------------------------------------------------------------------
\9\29 U.S.C. Sec. 255.
\10\29 U.S.C. Sec. 216; 29 U.S.C. Sec. 260.
---------------------------------------------------------------------------
Title VII also has limitations when it comes to closing the
gender wage gap. Title VII prohibits discrimination based on
race, color, national origin, religion, and sex. To bring a
case of wage discrimination under Title VII, a plaintiff must
prove intentional discrimination. Before bringing a case to
court, a claimant must exhaust administrative remedies through
the EEOC. Cases under Title VII must be filed with the EEOC
within 180 days of the violation, or longer in states where
there is a state fair employment practices law.\11\ Although a
plaintiff bringing a gender-based wage discrimination claim is
entitled to back pay, compensatory damages,\12\ and punitive
damages,\13\ compensatory and punitive damages do have monetary
caps. These caps vary depending on the size of the employer\14\
and under no circumstance can these damages exceed
$300,000.\15\ However, compensatory and punitive damages for
Title VII wage discrimination claims based upon race and
national origin may be uncapped when combined with Section 1981
claims, creating a two-tiered system where pay discrimination
based on race and national origin is sanctioned more severely
than pay discrimination based on sex.\16\
---------------------------------------------------------------------------
\11\42 U.S.C. Sec. 2000-e-5(e).
\12\Jody Feder & Benjamin Collins, Cong. Research Serv., RL31867,
Pay Equity: Legislative and Legal Developments 3 (2016) (stating that
compensatory damages include such items as pain and suffering, medical
expenses and emotional distress).
\13\Id. (punitive damages may be recovered when the employer acted
with malice or reckless indifference).
\14\Id.
\15\42 U.S.C. Sec. 1981a.
\16\See 29 U.S.C. Sec. 216(b); 29 C.F.R. Sec. 1620.33.
---------------------------------------------------------------------------
Due to weaknesses in the EPA, the landmark legislation has
not lived up to its original purpose. Women working full-time
earned just 58.9 cents to the dollar that men earned when the
EPA was passed in 1963. The wage gap has narrowed somewhat
since then, but it persists as a significant problem for
American women. Today, women are typically paid 82 cents for
every dollar paid to a man.\17\ The wage gap is even more
substantial for women of color. For every dollar white, non-
Hispanic men make, Black women typically make only 63 cents,
Latina women only 55 cents, and American Indian or Alaskan
Native women only 60 cents.\18\ H.R. 7 is a critical step
forward in the fight to eliminate pay disparity that
``depresses wages and living standards for employees necessary
for their health and efficiency; prevents maximum utilization
of the available labor resources; tends to cause labor
disputes, thereby burdening, affecting, and obstructing
commerce; and constitutes an unfair method of
competition.''\19\ Congress has a responsibility to modernize
the EPA so that it can better achieve its intended purpose.
---------------------------------------------------------------------------
\17\Am. Ass'n of Univ. Women, The Simple Truth about the Gender Pay
Gap: 2020 Update 2 (2020), https://www.aauw.org/app/uploads/2020/12/
SimpleTruth_2.1.pdf.
\18\Id.
\19\Equal Pay Act of 1963, Pub. L. No. 88-38, 77 Stat. 56-57.
---------------------------------------------------------------------------
Hundreds of organizations have expressed support for H.R.
7, including: 9to5; A Better Balance; AFCPE (Association for
Financial Counseling & Planning Education); All-Options;
American Association of University Women (AAUW); AAUW of
Alabama; AAUW of Alaska (AAUW Fairbanks (AK) Branch); AAUW of
Arizona; AAUW of Arkansas; AAUW of California; AAUW of
Colorado; AAUW of Connecticut; AAUW of Delaware; AAUW of
District of Columbia (AAUW Washington (DC) Branch; AAUW Capitol
Hill (DC) Branch); AAUW of Florida; AAUW of Georgia; AAUW of
Hawaii; AAUW of Idaho; AAUW of Illinois; AAUW of Indiana; AAUW
of Iowa; AAUW of Kansas; AAUW of Kentucky; AAUW of Louisiana;
AAUW of Maine; AAUW of Maryland; AAUW of Massachusetts; AAUW of
Michigan; AAUW of Minnesota; AAUW of Mississippi; AAUW of
Missouri; AAUW of Montana; AAUW of Nebraska; AAUW of Nevada;
AAUW of New Hampshire; AAUW of New Jersey; AAUW of New Mexico;
AAUW of New York; AAUW of North Carolina; AAUW of North Dakota;
AAUW of Ohio; AAUW of Oklahoma; AAUW of Oregon; AAUW of
Pennsylvania; AAUW of Puerto Rico; AAUW of Rhode Island; AAUW
of South Carolina; AAUW of South Dakota; AAUW of Tennessee;
AAUW of Texas; AAUW of Utah; AAUW of Vermont; AAUW of Virginia;
AAUW of Washington; AAUW of West Virginia; AAUW of Wisconsin;
AAUW of Wyoming; American Federation of Labor-Congress of
Industrial Unions (AFL-CIO); American Federation of State;
County and Municipal Employees; American Federation of
Teachers; AnitaB.org; Association of Flight Attendants-CWA;
Bend the Arc Jewish Action; California Women's Law Center;
Catalyst; Center for American Progress; Center for Law and
Social Policy (CLASP); Center for LGBTQ Economic Advancement &
Research; Clearinghouse on Women's Issues; Coalition of Labor
Union Women; Philadelphia Coalition of Labor Union Women;
Community Health Councils; Congregation of Our Lady of Charity
of the Good Shepherd; U.S. Provinces; Connecticut Women's
Education and Legal Fund (CWEALF); Disciples Center for Public
Witness; Equal Pay Today; Equal Rights Advocates; Every Texan;
Family Forward Oregon; Family Values @ Work; Feminist Majority
Foundation; Futures Without Violence; Gender Justice; Holy
Spirit Missionary Sisters; USA JPIC; In Our Own Voice: National
Black Women's Reproductive Justice Agenda; Indiana Institute
for Working Families; Institute for Women's Policy Research;
Justice for Migrant Women; KWH Law Center for Social Justice
and Change; Labor Council for Latin American Advancement;
Leadership Conference on Civil and Human Rights; League of
Women Voters of the United States; Legal Aid at Work; Legal
Momentum; The Women's Legal Defense and Education Fund; Legal
Voice; MANA; A National Latina Organization; Methodist
Federation for Social Action; Mi Familia Vota; Michigan League
for Public Policy; MomsRising; NAACP; National Advocacy Center
of the Sisters of the Good Shepherd; National Asian Pacific
American Women's Forum (NAPAWF); National Association of Social
Workers; National Center for Law and Economic Justice; National
Committee on Pay Equity; National Council of Jewish Women;
National Domestic Violence Hotline; National Education
Association; National Employment Law Project; National
Employment Lawyers Association; National Employment Lawyers
Association--Eastern Pennsylvania; National Employment Lawyers
Association--Georgia; National Network to End Domestic
Violence; National Organization for Women; Florida NOW;
Illinois NOW; Indiana NOW; Jacksonville NOW; Kanawha Valley
NOW; Maryland NOW; Monroe County NOW; Montana NOW; Northwest
Indiana NOW; South Jersey NOW Alice Paul chapter; National
Partnership for Women & Families; National WIC Association;
National Women's Law Center; National Women's Political Caucus;
Native Women Lead; NETWORK Lobby for Catholic Social Justice;
New Jersey Citizen Action; NewsGuild-CWA; New York Women's
Foundation; North Carolina Justice Center; People For the
American Way; PowHer New York; Prosperity Now; Reinventure
Capital; Restaurant Opportunities Centers (ROC) United; Service
Employees International Union; Shriver Center on Poverty Law;
TIME'S UP Now; U.S. Women's Chamber of Commerce; Union for
Reform Judaism; United State of Women; WNY Women's Foundation;
Women and Girls Foundation of Southwest Pennsylvania; Women
Employed; Women of Reform Judaism; Women's Fund of Rhode
Island; Women's Fund of the Greater Cincinnati Foundation;
Women's Law Project; Women's Media Center; Women's Rights and
Empowerment Network; YWCA USA; YWCA Allentown; YWCA Arizona
Metropolitan Phoenix; YWCA Billings; YWCA Butler; YWCA Central
Alabama; YWCA Central Indiana; YWCA Central Maine; YWCA Central
Virginia; YWCA Dayton; YWCA Duluth; YWCA Elgin; YWCA Genesee
County; YWCA Greater Austin; YWCA Greater Baton Rouge; YWCA
Greater Cincinnati; YWCA Greater Cleveland; YWCA Greater
Portland; YWCA Greenwich; YWCA Hartford Region; YWCA Kalamazoo;
YWCA Kauai; YWCA Kitsap County; YWCA Knoxville and the
Tennessee Valley; YWCA Lower Cape Fear; YWCA McLean County;
YWCA Metro Detroit--Interim House; YWCA National Capital Area;
YWCA New Hampshire; YWCA North Central Indiana; YWCA Northern
New Jersey; YWCA Oahu; YWCA Pierce County; YWCA Princeton; YWCA
QUINCY; YWCA Sauk Valley; YWCA Seattle King Snohomish; YWCA
South Hampton Roads; YWCA Southeastern Massachusetts; YWCA
Southern Arizona; YWCA University of Illinois; YWCA Utah; YWCA
Western New York; YWCA Wheeling; YWCA Yakima; and Zonta USA
Caucus.
Committee Views
The Committee on Education and Labor (Committee) is
committed to protecting the rights of individuals in the
workplace. Fifty-eight years after the passage of the EPA,
women continue to earn less than men for the same work. The
long-term impact of pay disparity on women's earnings is
substantial. Many women have been unable to utilize the
protections afforded under the EPA because loopholes, court
interpretations, and ineffective sanctions have made
enforcement extremely difficult. H.R. 7 strengthens the EPA to
more effectively combat wage discrimination. The Act builds
upon Congress' efforts 58 years ago when the EPA was enacted
and is a necessary step forward to close the persistent wage
gap between men and women.
HISTORY OF THE EQUAL PAY ACT
In 1963, Congress first addressed the issue of unequal
pay\20\ when it passed the EPA as an amendment to the Fair
Labor Standards Act of 1938 (FLSA).\21\ The purpose of the
legislation was broadly remedial to eliminate once and for all
gender-based discriminatory pay practices:
---------------------------------------------------------------------------
\20\Support for ``equal pay'' dates back to World War I when the
War Board enforced regulations requiring pay equity; see Elizabeth
Wyman, The Current Framework of Sex/Gender Discrimination Law: The
Unenforced Promise of Equal Pay Acts: A National Problem and Possible
Solution from Maine, 55 Me. L. Rev. 23 (2004).
\21\29 U.S.C. Sec. 206(d).
The objective of the legislation is to ensure that
those who perform tasks which are determined to be
equal shall be paid equal wages. The wage structure of
all too many segments of American industry has been
based on an ancient but outmoded belief that a man,
because of his role in society, should be paid more
than a woman even though his duties are the same. This
bill would provide, in effect, that such an outmoded
belief can no longer be implemented and that equal work
will be rewarded with equal wages.\22\
---------------------------------------------------------------------------
\22\H.R. Rep. No. 110-783 at 12 (2008) (internal citations and
quotations omitted).
The EPA enshrined ``equal work for equal pay regardless of
sex'' alongside minimum wages, overtime pay, and the protection
of child laborers as a fair labor standard in the FLSA.\23\
Other versions of equal pay legislation had been introduced
prior to and during 1963, but because the Department of Labor
had already developed ``a now familiar system of regulations
and procedures for investigation, administration, and
enforcement,'' Congress decided that a simple expansion of the
FLSA to include pay equity was the ``most efficient and least
difficult course of action.''\24\ Upon introduction of the
bill, Senator Patrick McNamara (D-MI) stated:
---------------------------------------------------------------------------
\23\Id. (internal citations and quotations omitted).
\24\Id. (internal citations and quotations omitted).
Such a utilization serves two purposes: First, it
eliminates the need for a new bureaucratic structure to
enforce equal pay legislation. And second, compliance
should be made easier because of both industry and
labor's long-established familiarity with existing fair
labor standards provisions.\25\
---------------------------------------------------------------------------
\25\Id. (internal citations and quotations omitted).
Some legislators felt that the legislation did not go far
enough but voted for it nonetheless because it was ``a good
start . . . in eliminating the unfairness of unequal pay.''\26\
---------------------------------------------------------------------------
\26\Id. (internal citations and quotations omitted).
---------------------------------------------------------------------------
In passing the EPA, Congress intended that ``men and women
doing the same job under the same working conditions . . .
receive equal pay.''\27\ Congressman Rodney Frelinghuysen (R-
NJ-11) elaborated on the standard:
---------------------------------------------------------------------------
\27\Id. at 12-13 (internal citations and quotations omitted).
[T]he jobs in dispute must be the same in work
content, effort, skill and responsibility requirements,
and in working conditions . . . it is not intended to
compare unrelated jobs or jobs that have been
historically and normally considered by the industry to
be different.\28\
---------------------------------------------------------------------------
\28\H.R. Rep. No. 110-783 at 12 (2008) (internal citations and
quotations omitted).
At the same time, ``equal pay for equal work'' did not mean
that the jobs in question had to be identical. They were to be
similar in terms of ``work content, effort, skill and
responsibility requirements and in working conditions.''\29\
---------------------------------------------------------------------------
\29\Id. at 13 (internal citations and quotations omitted).
In addition, the floor debate made clear that under the
EPA, discrimination against one individual would be actionable,
and a showing of a pattern and practice of discrimination would
---------------------------------------------------------------------------
not be required. Senator McNamara stated:
It is inconceivable that this Congress should write
legislation that would permit selective discrimination
which, without doubt, would occur mostly likely against
those individuals who are least able to protest. It is
certainly the intent of the Senate that an employer
will have violated this act if he discriminates against
one employee, just as he will violate it if he
discriminates against many.\30\
---------------------------------------------------------------------------
\30\Id. (internal citations and quotations omitted).
While the EPA was aimed at eradicating wage differentials
based on sex, it was not intended to limit other kinds of pay
inequity. As such, even though the female employee might show
that the employer's wages were unequal compared to a man, the
EPA does provide employers with affirmative defenses to justify
the differences in pay if such differences are based on: (1)
seniority systems; (2) merit systems; (3) methods that measure
earnings by quality or quantity of production; or (4) any
factor other than sex.\31\
---------------------------------------------------------------------------
\31\29 U.S.C. Sec. 206(d)(1).
---------------------------------------------------------------------------
While the ``any factor other than sex'' affirmative defense
was broadly written, Congress intended that any proffered
reason for a pay differential be a bona fide one. Also, the
drafters made sure that the employer shouldered the burden of
proving the legitimacy of its practice,\32\ making clear that
these affirmative defenses were never intended to ``shield
employers who have a plan or system in place that is devised to
evade the law.''\33\
---------------------------------------------------------------------------
\32\H.R. Rep. No. 110-783 at 13 (2008) (internal citations and
quotations omitted).
\33\Id. (internal citations and quotations omitted).
---------------------------------------------------------------------------
EPA, TITLE VII, AND SECTION 1981
On July 2, 1964, President Lyndon Johnson signed the Civil
Rights Act of 1964\34\ into law. It was historic legislation
prohibiting discrimination in employment, among other things,
on the basis of race, color, religion, national origin, and
sex.\35\ The EPA and Title VII, passed only one year apart,
both prohibited sex discrimination in pay and provided
overlapping coverage.
---------------------------------------------------------------------------
\34\Civil Rights Act of 1964, Pub. L. No. 88-352, 78 Stat. 241.
\35\42 U.S.C. Sec. 2000e et seq.
---------------------------------------------------------------------------
Although the Civil Rights Act of 1991 amended Title VII to
allow women to recover compensatory and punitive damages for
intentional sex discrimination, the damages were capped at a
maximum award of $300,000 and were based upon the size of the
employer rather than the amount of harm to the victim.\36\
During the two years of debate, Congress acknowledged that caps
on damages for victims of sex discrimination created a two-
tiered system where damages for sex discrimination were less
than damages available for race and national origin
discrimination. Congress considered and ultimately rejected
uncapped damages in cases of sex discrimination as part of a
compromise to avoid a presidential veto by President George
H.W. Bush.\37\ The judgment made by Congress established a
``disparate treatment of the law which seems to imply that some
forms of discrimination are more tolerable than others.''\38\
---------------------------------------------------------------------------
\36\Lynn Ridgeway Zehrt, Twenty Years of Compromise: How the Cap on
Damages in the Civil Rights Act of 1991 Codified Sex Discrimination, 25
Yale J.L. & Feminism 250, 249-50 (2013).
\37\Id. at 301.
\38\Id. at 271 n.162.
---------------------------------------------------------------------------
Eighteen years after Congress acknowledged that it was
creating a two-tiered system of damages where discrimination
based upon race and national origin is elevated over
discrimination based on gender, distinct differences remain
between the application of Title VII and the EPA in sex-based
wage discrimination cases.\39\ Key differences are outlined
below.
---------------------------------------------------------------------------
\39\H.R. Rep. No. 110-783 at 14 n.28 (2008) (internal citations and
quotations omitted).
---------------------------------------------------------------------------
Statute of Limitations/Exhaustion of Administrative
Remedies. Under the EPA, an aggrieved person has two years (or
three years in a case of a willful violation) from the date of
any instance of unequal pay to file a claim in court.\40\
Generally, under Title VII, the aggrieved person must file a
charge with the EEOC within 180 days. In Ledbetter v. Goodyear
Tire & Rubber Company, Inc., the U.S. Supreme Court found that
Lilly Ledbetter's equal pay claim was time-barred because it
was filed more than 180 days after the initial act of
discrimination.\41\ The Lilly Ledbetter Fair Pay Act of 2009
directly addressed the 180-day statute of limitation and now
enables workers to file Title VII pay discrimination claims 180
days from the last discriminatory paycheck as opposed to 180
days from when the discrimination first began.\42\
---------------------------------------------------------------------------
\40\29 U.S.C. Sec. 255.
\41\Ledbetter v. Goodyear Tire & Rubber Co., Inc., 127 S. Ct. 2162
(2007).
\42\42 U.S.C. Sec. 2000-e-5(e).
---------------------------------------------------------------------------
Burden of Proof. When alleging discrimination under the
EPA, an employee is required to show that two employees working
in the same establishment and doing substantially similar jobs
are receiving unequal pay. However, the plaintiff does not bear
the burden of proving that the employer intentionally committed
wage-based gender discrimination. Once the plaintiff has made a
showing of unequal pay, the burden of proof shifts to the
employer to show that the pay inequity is not due to gender
discrimination.\43\
---------------------------------------------------------------------------
\43\EEOC Compliance Manual, No. 915.003 Sec. 10-5 (Dec. 5, 2000),
https://www.eeoc.gov/policy/docs/compensation.html.
---------------------------------------------------------------------------
In contrast, a plaintiff under Title VII must typically
prove that the employer engaged in intentional discrimination
and retains the burden of proving discrimination throughout the
case. However, unlike an EPA complainant, Title VII plaintiffs
are not required to demonstrate that the performance of
substantially similar (or equal) work so long as plaintiffs
have other evidence of discrimination. (E.g. Proof that a male
employee worked fewer hours or evidence that a female employee
would have been paid more had she been a man).\44\
---------------------------------------------------------------------------
\44\Id.
---------------------------------------------------------------------------
Damages. A plaintiff who successfully proves gender-based
wage discrimination under the EPA can only recover backpay,
and, unless the employer can show that it acted in good faith,
an equal amount in liquidated damages.\45\ Conversely, under
Title VII, a prevailing plaintiff for a gender-based wage claim
is entitled to back pay, compensatory damages,\46\ and punitive
damages\47\ for intentional wage discrimination.\48\ However,
as noted above, there are monetary caps on compensatory and
punitive damages, which vary depending on the size of the
employer rather than the extent of a victim's injuries.\49\
However, in no event may these damages exceed $300,000.\50\
---------------------------------------------------------------------------
\45\29 U.S.C. Sec. 216; 29 U.S.C. Sec. 260.
\46\H.R. Rep. No. 110-783 at 14 (2008) (internal citations and
quotations omitted).
\47\Id. (internal citations and quotations omitted) (punitive
damages may be recovered when the employer acted with malice or
reckless indifference).
\48\Id.
\49\Id.
\50\Id.
---------------------------------------------------------------------------
Section 1981. While Section 1981 of the Civil Rights Act of
1866 (Section 1981) does not cover sex-based discrimination, it
is worth comparing as well. Section 1981 forbids discrimination
on the basis of race or national origin in the making and
enforcement of contracts.\51\ Such contracts may be between
employee and employer or between businesses. Plaintiffs in
Section 1981 cases may recover compensatory and punitive
damages, and the damages are not limited. Thus, under current
law, an employee receiving unequal pay for equal work on the
basis of race or national origin may recover punitive damages
without an arbitrary statutory limit, but an employee receiving
unequal pay on the basis of sex cannot. In this way,
limitations on damage awards based on gender are considered by
some to be another form of discrimination based upon sex.
---------------------------------------------------------------------------
\51\42 U.S.C. Sec. 1981(a).
---------------------------------------------------------------------------
WOMEN CONTINUE TO BE PAID LESS THAN MEN
While progress has been made, equal pay for women is not
yet a reality. As previously noted, a woman working full-time,
year-round is typically paid 82 cents for every dollar a man
makes.\52\ This gap can cause significant economic loss for a
working woman over the course of her career. For example, a
woman working full-time and year-round earning the median
income for women would lose $406,280 in earnings over a 40-year
career.\53\ To make up for the gender pay gap in lifetime
earnings, a working woman would have to work almost nine years
longer than her male counterpart.\54\ The gender wage gap's
ultimate result is lower lifetime earnings for women, and as a
result of these lower lifetime earnings, women's retirement
savings and social security benefits are greatly affected.\55\
In 2011, women aged 65 and older received a total income of
$22,069 on average compared to $41,134 for men.\56\ The average
Social Security benefit is $15,846 for women compared to
$20,153 for men of the same age.\57\
---------------------------------------------------------------------------
\52\Am. Ass'n of Univ. Women, The Simple Truth about the Gender Pay
Gap: 2020 Update 1 (2020), https://www.aauw.org/app/uploads/2020/12/
SimpleTruth_2.1.pdf.
\53\Nat'l Women's Law Ctr., The Wage Gap: The Who, How, Why and
What to Do 2 (2020), https://nwlc.org/wp-content/uploads/2019/09/Wage-
Gap-Who-how.pdf.
\54\Id.
\55\Jocelyn Fischer & Jeff Hayes, The Importance of Social Security
in the Incomes of Older Americans: Differences by Gender, Age, Race/
Ethnicity, and Marital Status 1-4 (2013), https://iwpr.org/iwpr-
general/the-importance-of-social-security-in-the-incomes-of-older-
americans-differences-by-gender-age-race-ethnicity-and-marital-status/.
\56\Id.
\57\Nat'l Women's Law Ctr., The Wage Gap: The Who, How, Why and
What to Do 2 (2020), https://nwlc.org/wp-content/uploads/2019/09/Wage-
Gap-Who-how.pdf; see also Jocelyn Fischer & Jeff Hayes, The Importance
of Social Security in the Incomes of Older Americans: Differences by
Gender, Age, Race/Ethnicity, and Marital Status 1-4 (2013), https://
iwpr.org/iwpr-general/the-importance-of-social-security-in-the-incomes-
of-older-americans-differences-by-gender-age-race-ethnicity-and-
marital-status/ (see figure 4).
---------------------------------------------------------------------------
Because of the gender wage gap, the economy as a whole
suffers. For example, researchers estimate that in 2016, the
U.S. economy would have produced additional income of $512.6
billion if women received equal pay--an amount equivalent to
2.8 percent of the 2016 gross domestic product (GDP).\58\ In
addition to boosting the economy, pay equity would cut the
poverty rate for all working women by more than half, from 8
percent to 3.8 percent.\59\
---------------------------------------------------------------------------
\58\Jessica Milli et al., The Impact of Equal Pay on Poverty and
the Economy 2 (2017), https://iwpr.org/iwpr-publications/briefing-
paper/the-impact-of-equal-pay-on-poverty-and-the-economy/.
\59\Id.
---------------------------------------------------------------------------
Research indicates that women experience a pay gap in
nearly every line of work, regardless of education, experience,
occupation, industry, and job title.\60\ In fact, 38 percent of
the pay gap remains unexplained even when accounting for these
variables.\61\ ``Most researchers attribute this portion [of
the wage gap] to factors such as discrimination and socially
constructed gender norms. . .''\62\ The wage gap remains even
when controlling for educational attainment.\63\ Women with a
bachelor's degree earn less than do men with an associate's
degree and men with only a high school degree but no college
education typically make more than women with an Associate's
degree.\64\ Even in fields where women make up a substantial
share of the workforce and controlling for experience, skills,
education, race, and region, a gender wage gap remains in 98
percent of occupations.\65\ Additionally, research demonstrates
that when women move into a field of work in large numbers,
wages decline.\66\
---------------------------------------------------------------------------
\60\Council of Economic Advisers, The Gender Pay Gap on the
Anniversary of the Lilly Ledbetter Fair Pay Act 3 (2016), https://
obamawhitehouse.archives.gov/sites/default/files/page/files/
20160128_cea_gender_pay_gap_issue_brief.pdf.
\61\Washington Ctr for Equitable Growth, Gender Wage Inequality:
What We Know and How We Can Fix It 18 (2018), https://
equitablegrowth.org/research-paper/gender-wage-inequality/.
\62\Id.
\63\Anthony P. Carnevale et al., Women Can't Win 4 (2018), https://
1gyhoq479ufd3yna29x7ubjn-wpengine.netdna-ssl.com/wp-content/uploads/
Women_FR_Web.pdf; see also Nat'l Women's Law Ctr., The Wage Gap: The
Who, How, Why and What to Do 2 (2020), https://nwlc.org/wp-content/
uploads/2019/09/Wage-Gap-Who-how.pdf.
\64\Id.; see also Am. Ass'n of Univ. Women, The Simple Truth about
the Gender Pay Gap 1 (2018), https://www.aauw.org/aauw_check/
pdf_download/show_pdf.php?file=The_Simple_Truth.
\65\Asaf Levanon et al., Occupational Feminization and Pay:
Assessing Causal Dynamic Using 1950-2000 U.S. Census Data, 88 Social
Forces 865 (2009); see also Jasmine Tucker, Women Experience a Wage Gap
in Nearly Every Occupation 2 (2018), https://nwlc-
ciw49tixgw5lbab.stackpathdns.com/wp-content/uploads/2018/04/Wage-Gap-
Fact-Sheet-Occupation.pdf; see also Nat'l Women's Law Ctr., The Wage
Gap: The Who, How, Why and What to Do (2020), https://nwlc.org/wp-
content/uploads/2019/09/Wage-Gap-Who-how.pdf.
\66\Asaf Levanon, et al., Occupational Feminization and Pay:
Assessing Causal Dynamic Using 1950-2000 U.S. Census Data, 88 Social
Forces 865 (2009).
---------------------------------------------------------------------------
Wage inequality experienced by mothers threatens the
stability of families across the United States. Mothers now
represent a larger share of the breadwinners for their families
than in previous years, and this ``is the continuation of a
long-running trend, as women's earnings and economic
contributions to their families continue to grow in
importance.''\67\ In 2015, 64.4 percent of mothers in the
United States were either the sole family breadwinner (42
percent) or the co-breadwinner (22.4 percent).\68\ Meanwhile,
mothers do not see the wage bump seen by fathers and in fact,
statistics show that mothers receive a 7 percent penalty per
child.\69\ Mothers on average are paid less than fathers, with
mothers receiving 75 cents for every dollar a father earns, and
low-wage working mothers see the biggest penalty of all groups
in the workforce.\70\ The motherhood penalty is particularly
staggering for Latina, Black, and Native American mothers who
are paid 46, 52, and 50 cents to the dollar, respectively,
compared to white non-Hispanic fathers.\71\ Households headed
by working mothers are also more likely to be in poverty than
their single father counterparts. Only about one in four
households headed by single mothers in the United States are
economically secure.\72\ Conversely, households headed by
single fathers are nearly twice as likely to have incomes that
provide economic security.\73\ Eliminating pay inequality would
cut the poverty rate for working single mothers in nearly half,
from 28.9 percent to 14.5 percent.\74\
---------------------------------------------------------------------------
\67\Sarah Jane Glynn, Breadwinning Mothers are Increasingly the
U.S. Norm, Center for American Progress (Dec. 19, 2016, 11:59 AM),
https://www.americanprogress.org/issues/women/reports/2016/12/19/
295203/breadwinning-mothers-are-increasingly-the-u-s-norm/.
\68\Id.
\69\Michelle J. Budig & Paula England, The Wage Penalty for
Motherhood, 66 American Sociological Review 204, 204-25 (2001).
\70\Nat'l Women's Law Ctr., The Wage Gap Has Robbed Women of Their
Ability to Weather COVID-19 2 (2021), https://nwlc.org/wp-content/
uploads/2021/03/EPD-2021-v1.pdf; see also Michelle J. Budig & Melissa
J. Hodges, Differences in Disadvantage: Variation in the Motherhood
Penalty across White Women's Earnings Distribution, 75 American
Sociological Review 1, 1-24 (2010).
\71\Nat'l Women's Law Ctr., The Wage Gap Has Robbed Women of Their
Ability to Weather COVID-19 2 (2021), https://nwlc.org/wp-content/
uploads/2021/03/EPD-2021-v1.pdf.
\72\Institute for Women's Policy Research, Basic Economic Security
in the United States: How much Income Do Working Adults Need in Each
State? 4 (2018), https://iwpr.org/job-quality-income-security/basic-
economic-security-in-the-united-states/.
\73\Id.
\74\Jessica Milli et al., The Impact of Equal Pay on Poverty and
the Economy 2 (2017), https://iwpr.org/iwpr-publications/briefing-
paper/the-impact-of-equal-pay-on-poverty-and-the-economy/; see also Am.
Ass'n of Univ. Women, The Simple Truth about the Gender Pay Gap: 2020
Update 6 (2020), https://www.aauw.org/app/uploads/2020/12/
SimpleTruth_2.1.pdf.
---------------------------------------------------------------------------
The total increase in earnings by women through pay equity
would be 16 times what the Federal Government and all state
governments combined spent on Temporary Assistance to Needy
Families (TANF) in Fiscal Year 2015.\75\ Additionally,
approximately 25.8 million children would benefit from the
increased earnings of their mothers, and the number of children
with working mothers living in poverty would drop from 5.6
million to 3.1 million.\76\
---------------------------------------------------------------------------
\75\Jessica Milli et al., The Impact of Equal Pay on Poverty and
the Economy 2 (2017), https://iwpr.org/iwpr-publications/briefing-
paper/the-impact-of-equal-pay-on-poverty-and-the-economy/.
\76\Id.
---------------------------------------------------------------------------
Pay discrimination is difficult to detect
In today's workplace, pay discrimination is often extremely
difficult to detect. Discriminatory salary decisions are seldom
obvious to employees because pay is often cloaked in
secrecy.\77\ As Justice Ginsburg observed in Ledbetter v.
Goodyear Tire & Rubber Company, Inc., ``comparative pay
information . . . is often hidden from the employee's
view.''\78\ This lack of transparency creates significant
obstacles for employees to gather information that would
indicate that they have experienced pay discrimination.\79\
Ultimately, this undermines an employee's ability to challenge
pay discrimination.\80\ Also, many employers have policies
prohibiting salary discussions.\81\ About 60 percent of workers
in the for-profit, private sector are subject to rules
prohibiting or strongly discouraging employees from discussing
their wages with co-workers.\82\ Finally, for those employees
who do know what their colleagues earn, they often lack
information about the contributing factors that might influence
pay levels, such as performance, education, or training.
---------------------------------------------------------------------------
\77\Fighting for Fairness: Examining Legislation to Confront
Workplace Discrimination Before H. Subcomm. on Civil Rights and Human
Servs. & H. Subcomm. on Workforce Prots. of the H. Comm. on Educ. and
Labor, 117th Cong. (2021) (written testimony of Fatima Goss Graves,
President and CEO of National Women's Law Center, at 4) [Hereinafter
Goss Graves Testimony].
\78\Ledbetter v. Goodyear Tire & Rubber Co. Inc., 127 S. Ct. 2162,
2179 (2007) (Ginsburg, J., dissenting).
\79\Goss Graves Testimony at 6.
\80\Id.
\81\Id.
\82\Shengwei Sun et al., On the Books, Off the Record: Examining
the Effectiveness of Pay Secrecy Laws in the U.S. 7 (2021), https://
iwpr.org/wp-content/uploads/2021/01/Pay-Secrecy-Policy-Brief-v4.pdf.
---------------------------------------------------------------------------
Disparate pay might not begin with a woman's initial salary
determination, but it can readily develop with a decision to
increase the pay of male colleagues. Women risk being
overlooked for promotions and raises, the impact of which
compounds throughout their careers.
Discussions about wages are necessary to identify pay
disparity because ``without this knowledge, [women] are unable
to report these problems to the EEOC.''\83\ Once a lawsuit is
filed, the discovery of wage data is available to help
aggrieved employees develop their cases; however, in order
learn more about employee salaries, women need to have some
basis to file suit in the first place.
---------------------------------------------------------------------------
\83\The Paycheck Fairness Act (H.R. 7): Equal Pay for Equal Work
Before H. Subcomm. on Civil Rights and Human Servs. & H. Subcomm. on
Workforce Prots. of the H. Comm. on Educ. and Labor, 116th Cong. (2019)
(written testimony of Jenny Yang, Partner at Working Ideal, at 2)
[Hereinafter Yang Testimony].
---------------------------------------------------------------------------
Lack of data on pay disparity
Data about pay discrimination is an invaluable tool for
enforcement agencies such as the EEOC and the Office of Federal
Contract Compliance Programs (OFCCP). Experts agree that these
agencies currently receive minimal information about gender-
based disparities in pay at the establishment level.\84\
---------------------------------------------------------------------------
\84\Id.
---------------------------------------------------------------------------
Bureau of Labor Statistics--Occupational Employment
Statistics. For over forty years, the Bureau of Labor
Statistics (BLS) had been collecting data on female workers and
comparing them to their male counterparts. This data had formed
the basis for its monthly report on the employment
situation.\85\ In 2005, BLS stopped collecting this data,
citing employer inconvenience.\86\ In response to this,
Congress included in the Fiscal Year 2006, 2007, 2008, 2009,
and 2010 Labor, Health and Human Services, Education, and
Related Agencies appropriations bills that were enacted into
law a provision requiring BLS to continue to collect data on
women workers. However, beginning in Fiscal Year 2011 and
continuing through Fiscal Year 2019, Congress did not include
the requirement for BLS to collect data on women workers as
part of the Current Employment Statistics (CES) survey.
Recognizing the value of collecting these statistics, the
Paycheck Fairness Act makes permanent a requirement for BLS to
gather these statistics as part of the CES.
---------------------------------------------------------------------------
\85\H.R. Rep. No. 110-783 at 18 (2008) (internal citations and
quotations omitted).
\86\Id. at 18 n.76.
---------------------------------------------------------------------------
Equal Employment Opportunity Commission. The EEOC was
created by the Civil Rights Act of 1964 and was given
litigation enforcement authority in 1972.\87\ The EEOC has
collected employment data categorized by race/ethnicity,
gender, and job category through the Employer Information
Report EEO-1 (EEO-1) from employers since 1966. The EEOC has
also collected and maintained sensitive employer information
gathered through its investigations since it opened its doors
in 1965. Title VII requires that the EEOC keep this information
confidential and imposes criminal sanctions on EEOC employees
who unlawfully disclose confidential information.
---------------------------------------------------------------------------
\87\35 Years of Ensuring the Promise of Opportunity, EEOC, https://
www.eeoc.gov/eeoc/history/35th/pre1965/index.html (last visited Mar.
11, 2019).
---------------------------------------------------------------------------
In 2016, the Obama Administration expanded the data
collection requirements for the EEO-1 to include, in addition
to employment demographic data (Component 1), pay data
disaggregated by race/ethnicity, gender, and job category
(Component 2). Collecting pay data can expose trends in the
hiring, payment, and promotion of employees; the sex-
segregation of jobs; and the inequity of salaries, benefits, or
bonuses. Data may show that employees of the opposite sex are
not paid comparably for the same job, or for different jobs
that require similar skills, education, and experience. Some
businesses may not be aware of the discriminatory practices
until the data is collected and analyzed. Once these issues are
brought to light, businesses can create interventions aimed at
correcting or eliminating the problem before it even starts.
The Trump Administration indefinitely stayed the expanded
pay data collection reporting requirements,\88\ but following
litigation, a court ordered the EEOC to collect pay data from
employers for 2017 and 2018, and it did so. Nevertheless, in
2019, the EEOC revised the EEO-1 form to eliminate future pay
data reporting, and the OFCCP announced that it would neither
seek nor rely on the Component 2 pay data collected by the EEOC
for its enforcement efforts. While the EEOC recently announced
that it will resume the EEO-1 Component 1 demographic data
collection, which was paused in 2020, this does not include the
expanded pay data reporting requirements. The Paycheck Fairness
Act requires the Department of Labor and the EEOC to collect
data on compensation and other employment-related data by race,
nationality, and sex in order to enhance the ability of both
agencies to detect violations and improve enforcement of the
EPA.
---------------------------------------------------------------------------
\88\What You Should Know: Statement of Acting Chair Victoria A.
Lipnic about OMB Decision on EEO-1 Pay Data Collection, https://
www.eeoc.gov/eeoc/newsroom/wysk/eeo1-pay-data.cfm (last visited Mar.
11, 2019).
---------------------------------------------------------------------------
Office of Federal Contract Compliance Programs. The OFCCP
is unique in that it is required by law to affirmatively
conduct reviews to ensure that contractors with federal
contracts are in compliance with equal employment measures,
including Executive Order 11246, which prohibits discrimination
in employment on the basis of race, color, religion, national
origin, and gender. An estimated 4.1 million individuals work
for an employer who contracts with the federal government.\89\
---------------------------------------------------------------------------
\89\Janet Nguyen, The U.S. Government is Becoming More Dependent on
Contract Workers, Marketplace (Jan. 17, 2019, 2:17 PM), https://
www.marketplace.org/2019/01/17/business/rise-federal-contractors.
---------------------------------------------------------------------------
The OFCCP's Equal Opportunity (EO) Survey was developed
over three administrations to ensure nondiscrimination in
federal contractor employment. It was intended to track
employment data and to improve the enforcement of anti-
discrimination requirements, including gender-based wage
discrimination, on federal contractors.\90\ Prior to the EO
Survey, the OFCCP conducted targeted compliance reviews.
Because of limited resources, the OFCCP only audited
approximately four percent of contractors each year for
compliance.\91\
---------------------------------------------------------------------------
\90\H.R. Rep. No. 110-783 at 18 (2008) (internal citations and
quotations omitted).
\91\Id. at 19 (internal citations and quotations omitted).
---------------------------------------------------------------------------
The EO Survey was designed to enable the OFCCP to be far
more effective in detecting and remedying wage discrimination
and encouraging self-awareness and self-evaluation among
contractors as a means of increasing compliance.\92\ It was
developed to query employers on an annual basis (to be
eventually sent to at least one-half of all contractors each
year) about their affirmative action program activities,
personnel actions (e.g., hires and promotions), and
compensation of full-time employees, all aggregated by job
group, race, and gender.\93\ The first survey was sent out in
2000 during the last year of the Clinton Administration, but
the Bush Administration that followed did not take any action
on the surveys that were returned and did not follow up on
those surveys that were not returned.\94\
---------------------------------------------------------------------------
\92\Id. (internal citations and quotations omitted).
\93\Id. (internal citations and quotations omitted).
\94\Id. (internal citations and quotations omitted).
---------------------------------------------------------------------------
In 2003 and 2004, the Bush Administration sent out fewer
and fewer surveys, and in 2005 it failed to send out any at
all. In January 2006, the OFCCP proposed eliminating the EO
Survey altogether.\95\ The Obama Administration recognized that
the gender pay gap continued to exist despite the prohibitions
against gender-based pay discrimination. In May 2014, President
Barack Obama issued a Memorandum instructing the Secretary of
Labor to establish regulations requiring federal contractors
and subcontractors to submit summary data on employee
compensation, including data by sex and race.\96\ As discussed
above, this important data was not collected due to actions
taken by the Trump Administration.\97\
---------------------------------------------------------------------------
\95\Id. (internal citations and quotations omitted).
\96\Memorandum on Advancing Pay Equality through Compensation Data
Collection, 2014 Daily Comp. Pres. Doc. 20751 (Apr. 11, 2014).
\97\Neomi Rao, EEO-1 Form; Review Stay, 1-2 (2017), https://
www.reginfo.gov/public/jsp/Utilities/Review_and_Stay_Memo_for_EEOC.pdf.
---------------------------------------------------------------------------
H.R. 7 expands the EEOC's and the OFCCP's authority to
collect pay data from certain employers, in addition to data
already collected from employers in Component 1, on employment
by race, gender, and national origin. This data will help
employers and these enforcement agencies identify gender-based
pay discrimination.
Women are less likely to negotiate
High numbers of women fail to negotiate for higher salaries
and promotions.\98\ Although lack of negotiation is a
contributing factor to the wage gap, it does not justify
gender-based pay discrimination. Researchers have discovered
several reasons women fail to negotiate for themselves in the
workplace. Women often do not promote their own interests,
choosing instead to focus on others believing that employers
will recognize and reward them for good work. Women tend to be
more successful when negotiating for others--negotiating 18
percent greater salaries for others than they negotiate for
themselves.\99\
---------------------------------------------------------------------------
\98\Shankar Vedantam, Salary, Gender and the Social Cost of
Haggling, Washington Post
(July 30, 2007), http://www.washingtonpost.com/wp-dyn/content/article/
2007/07/29/AR2007072900827.html.
\99\Dina W. Pradel et al., When Gender Changes the Negotiation,
Harvard Business School (Feb. 13, 2006), https://hbswk.hbs.edu/item/
when-gender-changes-the-negotiation.
---------------------------------------------------------------------------
The hesitation of women to negotiate for themselves is not
unreasonable. ``Employers tend to penalize women who initiate
negotiations for higher compensation more than they do men, as
women are often judged more harshly for seeking higher pay than
men.''\100\ H.R. 7 authorizes the Secretary of Labor, in
conjunction with the EEOC, to award competitive grants to
eligible entities to provide negotiation skills training
programs for the purposes of addressing pay disparities,
including through outreach to women and girls.
---------------------------------------------------------------------------
\100\Yang Testimony at 6.
---------------------------------------------------------------------------
Reliance on salary history perpetuates historic discrimination
Asking job applicants their prior salary history has long
been a routine part of the hiring process. However, the
practice of utilizing prior salary, or pay history, in the
hiring process perpetuates gender and racial wage gaps in the
workplace. Salary history is not an objective factor because it
assumes that prior salaries were fairly established in the
first place.\101\ Using salary histories, which may have been
tainted by bias or impacted by gender-based wage
discrimination, whether intentional or not, means that
discriminatory pay follows workers wherever they go. As the
EEOC's Compliance Manual states, ``[p]rior salary cannot, by
itself, justify a compensation disparity. This is because prior
salaries of job candidates can reflect sex-based compensation
discrimination.''\102\
---------------------------------------------------------------------------
\101\Nat'l Women's Law Ctr., Asking for Salary History Perpetuates
Pay Discrimination from Job to Job 2 (2020), https://nwlc.org/wp-
content/uploads/2018/12/Asking-for-Salary-History-Perpetuates-
Discrimination-1.14.2020-v2.pdf.
\102\EEOC Compliance Manual, No. 915.003 Sec. 10-IV.F.2.g (Dec. 5,
2000), https://www.eeoc.gov/policy/docs/compensation.html.
---------------------------------------------------------------------------
Businesses often decide what to pay new hires based in-
part, or in whole, on how much they earned from a previous job,
which can exacerbate prior pay discrimination. As Fatima Goss
Graves explained in her testimony at the 2021 Joint
Subcommittee Hearing:
According to a recent study by Harvard Business
Review, a significant percentage of employers who
conduct pay equity audits found that relying on
applicants' salary history is a key driver of gender
pay gaps within their companies. . . . By using a
woman's salary history to evaluate her suitability for
a position or to set her new salary, new employers
allow past discrimination to drive hiring and pay
decisions, which in turn, keeps women's pay stagnant.
Gender based discrimination in pay is further
compounded by race for women of color. . . . Recent
research shows that state salary history bans are
helping to narrow gender and racial wage gaps,
including increasing employer transparency when it
comes to pay. These bans have resulted in higher wages
for job-changers by an average of 8% for women and 13%
for African Americans compared to control groups.\103\
---------------------------------------------------------------------------
\103\Goss Graves Testimony at 8.
Relying on a prospective employee's skills and abilities
rather than prior pay ensures that employers reduce past
discrimination in the hiring and pay decision process.
Salary history bans are becoming increasingly popular; 15
states, Puerto Rico, and at least 17 cities or counties have
enacted salary history bans.\104\ Recent research also suggests
that these efforts are working; Black and female candidates who
took new jobs in states with a ban appear to have achieved
notable pay increases.\105\
---------------------------------------------------------------------------
\104\Am. Ass'n of Univ. Women, Pay Equity Laws Chart (2020),
https://www.aauw.org/app/uploads/2021/01/Pay-Equity-Laws-Chart_2020-
for-website.pdf; Am. Ass'n of Univ. Women, State and Local Salary
History bans, https://www.aauw.org/resources/policy/state-and-local-
salary-history-bans/.
\105\James Beesen et al., Stop Asking Job Candidates for Their
Salary History, Harvard Business Review (July 2020), https://hbr.org/
2020/07/stop-asking-job-candidates-for-their-salary-history.
---------------------------------------------------------------------------
THE EQUAL PAY ACT MUST BE STRENGTHENED TO EFFECTIVELY ERADICATE PAY
DISPARITY
The Paycheck Fairness Act strengthens the EPA as a tool to
achieve pay parity by addressing the shortcomings described
below.
Establishment
Plaintiffs raising a claim under the EPA carries a heavy
burden of proof in establishing a case for gender-based wage
discrimination. To make out a prima facie case, plaintiffs must
not only show that a pay disparity exists between employees of
the same ``establishment,'' but plaintiffs must also identify
specific employees of the opposite sex holding equal positions
who are paid higher wages.\106\ The courts have strictly
defined the term ``same establishment'' to mean ``a distinct
physical place of business.''\107\ ``This can be an obstacle
for an employee who seeks to compare her job to a male employee
who does the same work in a different physical location for the
same employer in the same town.''\108\
---------------------------------------------------------------------------
\106\Id. at 13.
\107\A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 496 (1945); 29
C.F.R. Sec. 1620.9(a).
\108\Goss Graves Testimony at 10.
---------------------------------------------------------------------------
The establishment requirement limits the ability of
plaintiffs to prevail in EPA claims since many plaintiffs may
not have a true comparator in their physical workplace. Today's
employers are much different than they were fifty-eight years
ago when the EPA was first enacted. Some employers may have
multiple facilities at which the same jobs are performed.
However, other locations may have only one person in a certain
position (e.g., manager or supervisor), and employers have
successfully asserted that plaintiffs in higher-level positions
have unique job duties and therefore have no comparator in the
same establishment.\109\
---------------------------------------------------------------------------
\109\Juliene James, The Equal Pay Act in the Courts: A De-Facto
White-Collar Exemption, 79 N.Y.U. L. Rev. 1873 (2004).
---------------------------------------------------------------------------
Georgen-Saad v. Texas Mutual Insurance Company illustrates
the obstacle the establishment requirement creates for
executive and professional women.\110\ In that case, the
complainant was a senior vice-president of finance who was
being paid less than the other senior-vice presidents in the
company. The court rejected Georgen-Saad's claim that any of
the positions required ``equal skill, effort, and
responsibility,'' and elaborated:
---------------------------------------------------------------------------
\110\Georgen-Saad v. Texas Mut. Ins. Co., 195 F. Supp. 2d 853 (W.D.
Tex. 2002).
According to Defendant, there are no male comparators
working in a position requiring equal skill, effort,
and responsibility under similar working conditions.
The Court agrees. The sealed exhibits filed with
Defendant's Motion for Summary Judgment include job
descriptions for the Senior Vice Presidents of
Investments, Insurance Services, Underwriting Services,
Underwritingand Policy Holder Services, Public Affairs,
Internal Audit, Benefits/Loss Prevention,
Administration, Data Processing Services, and Branch
Operations/Marketing.
The assertion that any one of these jobs requires
``equal skill, effort, and responsibility'' as
Plaintiff's Senior Vice President of Finance position
cannot be taken seriously. These are Senior Vice
Presidents in charge of different aspects of
Defendant's operations; these are not assembly-line
workers or customer-service representatives. In the
case of such lower level workers, the goals of the
Equal Pay Act can be accomplished due to the fact that
these types of workers perform commodity-like work and,
therefore, should be paid commodity-like salaries.
However, the practical realities of hiring and
compensating high-level executives deal a fatal blow to
Equal Pay Act claims.\111\
---------------------------------------------------------------------------
\111\Georgen-Saad v. Texas Mut. Ins. Co., 195 F. Supp. 2d 853 (W.D.
Tex. 2002).
In 1986, the EEOC issued regulations interpreting the
definition of ``establishment'' under the EPA.\112\ The
regulation provides in part that an establishment can encompass
more than a single physical establishment when the employer has
a central administrative unit charged with making salary and
employee decisions.
---------------------------------------------------------------------------
\112\29 C.F.R. Sec. 1620.9(a)-(b).
---------------------------------------------------------------------------
Courts have interpreted ``establishment'' to apply to
different locations. In Grumbine v. United States,\113\ the
Court held that for purposes of the EPA, ``the `establishment'
was the Civil Service in its entirety and that a woman could
not be paid less than a man merely because she worked in a
different location.''\114\ The plaintiff in Grumbine was a
Regional Counsel of Customs Service working in Baltimore,
Maryland and was the only female among the nine Regional
Counsels. The counsels were spread out among nine regions;
however, the eight males were paid more than the one female
counsel. Consequently, the plaintiff raised a claim of pay
discrimination under the EPA. The government argued that the
Regional Counsels each worked in different ``establishments'''
for purposes of the EPA. The court rejected this defense and
found, ``[i]t would hardly make sense to permit an employer to
rely on [the] geographic `establishment' concept in defense of
an equal pay practice when that employer has itself adopted a
uniform, non-geographic pay policy, and system.''\115\
---------------------------------------------------------------------------
\113\Grumbine v. United States, 586 F. Supp. 1144 (D.D.C. 1984).
\114\Id.
\115\Id. at 1148.
---------------------------------------------------------------------------
In 2000, a Texas court\116\ held that a female district
sales manager in the Dallas/Fort Worth facility could compare
herself to other district sales managers in the state of Texas
for purposes of the plaintiff's EPA claim. The plaintiff in the
case had no comparator in her physical establishment. As a
result, the court reasoned that limiting her comparators to a
single physical establishment ``would effectively permit a
large employer with national operations to exempt its
managerial staff (each of whom is in charge of a single
facility) from the reach of the EPA.''\117\ The Fifth Circuit
held that a school district in Dallas with 182 schools was a
single establishment for purposes of an EPA claim\118\ as were
13 elementary schools operated by a single school district near
Houston.\119\
---------------------------------------------------------------------------
\116\Vickers v. Int'l Baking Co., No. 398CV1864D, 2000 U.S. Dist.
LEXIS 17995 (N.D. Tex. Dec. 7, 2000).
\117\Id. at *15.
\118\Marshall v. Dallas Indep. Sch. Dist., 605 F.2d 191, 194 (5th
Cir. 1979).
\119\Brennan v. Goose Creek Consol. Indep. Sch. Dist., 519 F.2d 53
(5th Cir. 1975).
---------------------------------------------------------------------------
Numerous courts have recognized that there is a trend in
the law interpreting ``establishment'' to include all places of
business of one corporation or a multi-site employer.\120\
Under these circumstances, the courts have recognized that
accountability flows from the decision-making structure. The
single-location establishment interpretation is an unworkable
standard in today's workplace and threatens to eliminate a
large number of women from the EPA's protections.
---------------------------------------------------------------------------
\120\Meeks v. Computer Ass'n Int'l, 15 F.3d 1013, 1017 (courts
presume that multiple offices are not a single establishment unless
unusual circumstances are demonstrated); see also Kassman v. KPMG LLP,
No. 11 Civ. 3743, 2018 U.S. Dist. LEXIS 203561, at *81 (S.D.N.Y. Nov.
30, 2018) (denying class status of plaintiff and holding that ``[p]ay
and promotion decisions were not sufficiently `centralized' to amount
to `unusual circumstances' warranting a finding that the many offices
and practice areas represented in the 1,100-member proposed collective
qualify as a single `establishment' under the EPA'').
---------------------------------------------------------------------------
Recognizing that the single-site ``establishment''
definition is linked to an outdated employer-employee system
and that it has limited women's ability to assert an EPA claim,
H.R. 7 expands a worker's opportunity to find a valid
comparator. Under H.R. 7, a woman can look to a similarly
situated male co-worker anywhere in the same county or similar
political subdivision of a state. Workplaces in the same county
operate under the same cost of living and labor market
conditions. County-wide comparisons are already the law in
Illinois under the state's Equal Pay Act.\121\ However,
consistent with EEOC rules, guidance, and regulations,
including 29 C.F.R. 1620.9, the Act does not restrict courts
from applying establishment more broadly than the county.
---------------------------------------------------------------------------
\121\820 Ill. Comp. Stat. 112/10 (2003) (``Nothing in this Act may
be construed to require an employer to pay, to any employee at a
workplace in a particular county, wages that are equal to the wages
paid by that employer at a workplace in another county to employees in
jobs the performance of which requires equal skill, effort, and
responsibility, and which are performed under similar working
conditions.'').
---------------------------------------------------------------------------
Any factor other than sex
Under the EPA, employers can affirmatively defend and
justify unequal pay if it is based on: (1) seniority systems;
(2) merit systems; (3) systems that measure earnings by quality
or quantity of production; or (4) ``any factor other than
sex.''\122\ Historically, courts interpret the ``any factor
other than sex'' criteria so broadly that it embraces an almost
limitless number of factors, so long as they do not involve
sex.\123\ Employers have been able to prevail in EPA cases by
asserting a range of ``other than sex'' factors.
---------------------------------------------------------------------------
\122\29 U.S.C. Sec. 206(d)(1); see also Yang Testimony at 4.
\123\See Fallon v. Illinois, 882 F.2d 1206 (7th Cir. 1989).
---------------------------------------------------------------------------
There is no consensus among the circuit courts as to
whether a ``factor other than sex'' under the EPA needs to be
business related, and the Supreme Court has failed to resolve
this issue.\124\ Additionally, employers have been able to
successfully argue that factors such as market forces and prior
salaries (even if they are based on a discriminatory wage) fall
within the ``any factor other than sex'' defense, undermining
the goals of the EPA. ``Consideration of market forces shifts
focus from the central question of whether an employer is
providing equal pay for equal work. Bias can taint pay
decisions when the employer assesses an artificially higher or
nebulous `market value' to male candidates.''\125\
---------------------------------------------------------------------------
\124\Randolph Cent. Sch. Dist. v. Aldrich, 506 U.S. 965 (1992)
(denying cert and acknowledging the conflict among the circuits).
\125\Yang Testimony at 6.
---------------------------------------------------------------------------
In Boriss v. Addison Farmers Insurance Company,\126\ the
plaintiff brought an EPA claim alleging that in the ten years
she worked for the employer as an underwriter, she was paid
less than her male colleagues while performing substantially
equal work. When comparing the plaintiff to three of her male
colleagues, the employer alleged that the difference in pay was
due to more underwriting experience and college education, even
though a college degree was not a prerequisite for the
position.
---------------------------------------------------------------------------
\126\Boriss v. Addison Farmers Ins. Co., No. 91 C 3144, 1993 U.S.
Dist. LEXIS 10331 (N.D. Ill. July 27, 1993).
---------------------------------------------------------------------------
The court found that the employer successfully met its
burden; the difference in pay was due to a ``factor other than
sex.'' The court noted that the higher salaries of the male
employees were based on the pay they received at their prior
employment.\127\ The court relied on a very broad
interpretation of the ``factor other than sex'' and that the
factor need not be related to the ``requirements of the
particular position in question, nor that it be a `business-
related' reason.''\128\ All that needs to be evaluated is
``whether the factor is discriminatorily applied or if it
causes a discriminatory effect.''\129\
---------------------------------------------------------------------------
\127\Id. at 23.
\128\Id. (citing Covington v. S. Ill. Univ., 816 F.2d 317, 321-22
(1987)); see also Fallon v. Illinois, 882 F.2d 1206 (7th Cir. 1989).
\129\Boriss v. Addison Farmers Ins. Co., No. 91 C 3144, 1993 U.S.
Dist. LEXIS 10331 at *27 (N.D. Ill. July 27, 1993).
---------------------------------------------------------------------------
In addition, the court held that employers can lawfully pay
a male more than a similarly situated female employee if the
motivation is to induce the male worker to take the job and/or
if employers take into account what the employee was making at
his prior job.\130\ Even though these situations may result in
female employees being paid less, the court stated that none of
these situations violate the EPA.\131\
---------------------------------------------------------------------------
\130\Id.
\131\Id.
---------------------------------------------------------------------------
In Warren v. Solo Company,\132\ the court reaffirmed its
position that the defendant need not show that a ``factor other
than sex'' is related to the requirements of the particular
position or a ``business-related'' decision when it found that
unequal pay is justified because the male employee had a
college degree and two masters degrees, despite the fact that
the degrees were unrelated to the jobs they were both
performing.
---------------------------------------------------------------------------
\132\Warren v. Solo Cup Co., 516 F.3d 627 (7th Cir. 2008); see
Lauderdale v. Ill. Dep't of Human Servs., 210 F. Supp. 3d 1012, 1019
(C.D. Ill. 2016) (``[T]he EPA's fourth affirmative defense is a broad
catch-all exception that embraces an almost limitless number of
factors, as long as they do not involve sex.''); see also Dey v. Colt
Constr. & Dev. Co., 28 F.3d 1446, 1462 (7th Cir. 1994).
---------------------------------------------------------------------------
Despite clear direction from the Supreme Court,\133\ lower
courts have accepted market forces as a defense to a pay
disparity.\134\ In Merillat v. Metal Spinners,
Incorporated,\135\ the plaintiff, who was with the company for
nearly 20 years, was promoted to a senior buyer position in the
materials department. Around that time, the employer created a
new position entitled ``Vice President of Procurement and
Materials Management.''\136\ While the duties of both jobs were
similar, the new position also included managing materials
department employees (including the plaintiff). The job was
offered to a male with a starting salary of $62,500.\137\ At
that time, the plaintiff earned $49,800, and she helped to
train the new employee for his position.\138\
---------------------------------------------------------------------------
\133\See Corning Glass Works v. Brennan, 417 U.S. 188 (1974)
(holding that ``market forces''--such as the value given by the market
to men's and women's work or the more effective bargaining power that
men historically have--cannot be cited as a ``factor other than sex''
to evade liability. The court in Corning Glass Works noted that the
company's decision to pay women less for the same work that men
performed ``took advantage of the market and was illegal under the
EPA).
\134\See Brokaw v. Weiser Sec. Servs., Inc., 780 F. Supp. 2d 1233,
1252 (S.D. Ala. 2011).
\135\Merillat v. Metal Spinners, Inc., 470 F.3d 685 (7th Cir.
2006).
\136\Id.
\137\Id.
\138\Id.
---------------------------------------------------------------------------
The Merillat plaintiff brought an EPA claim against the
employer who asserted the affirmative defense that the pay
disparity was due to factors other than sex such as education,
experience, and market forces. The employer alleged that the
male hired to fill the new position was paid more, in part
because of education and experience, but also because his
salary represented the market rate for the position in
question. The court agreed and held that the pay disparity was
due to factors other than sex, including education, experience,
and ``the market forces at the time of [his] hire.''\139\ The
court noted that it previously ``held that an employer may take
into account market forces when determining the salary of an
employee,''\140\ although cautioning in a footnote against
employers taking advantage of market forces to justify
discrimination.
---------------------------------------------------------------------------
\139\Merillat v. Metal Spinners, Inc., 470 F.3d 685, 698 (7th Cir.
2006).
\140\Id. at 697.
---------------------------------------------------------------------------
Similarly, the Third Circuit, in the case of Hodgson v.
Robert Hall Clothes,\141\ found that the employer was justified
in paying the female workers less than the male workers because
the ``economic benefits to the employer justified a wage
differential even where the men and women were performing the
same task.''\142\ In Hodgson, the court compared the higher
wages of male salespeople working in the men's department of a
store with the lower wages being paid to female salespeople
working in the ladies' department.
---------------------------------------------------------------------------
\141\Hodgson v. Robert Hall Clothes, Inc., 473 F.2d 589 (3d Cir.
1973).
\142\Id. (in addition, women were not allowed to apply to work in
the men's department in this case).
---------------------------------------------------------------------------
In finding for the employer, the court based its decision
on the fact that the men's department was more profitable than
the ladies' department even though the products sold by the
women were of lesser quality and cost less than the goods sold
in the men's department. It concluded, ``[w]ithout a more
definite indication from Congress, it would not seem wise to
impose the economic burden of higher compensation on employers.
It could serve to weaken their competitive position.''\143\
---------------------------------------------------------------------------
\143\Id. at 596.
---------------------------------------------------------------------------
Some courts hold that it is acceptable for an employer to
pay male employees more than similarly situated female
employees based on the higher prior salaries enjoyed by the
male workers. In addition, employers can successfully justify
paying a male employer more if the higher salary is a business
tactic to lure or retain an employee.
In Drury v. Waterfront Media, Incorporated,\144\ the
plaintiff was hired as the Director of Project Management--
responsible for organizing and managing all corporate
projects--at a salary of $85,000 with an annual bonus of
$15,000 and $25,000 in stock options (in her previous position,
she had earned $85,000).\145\ Over a year later she was
promoted to Vice-President of Production and Operations with a
salary of $95,000 and a bonus potential of $20,000.\146\
---------------------------------------------------------------------------
\144\Drury v. Waterfront Media, Inc., 05 Civ. 10646 (JSR), 2007
U.S. Dist. LEXIS 18435(S.D.N.Y. Mar. 8, 2007).
\145\Id.
\146\Id.
---------------------------------------------------------------------------
However, another vice-president (for customer service) was
paid $110,000 with the possibility of a $25,000 bonus and
$50,000 in stock options. This difference was the basis of the
plaintiff's equal pay claim. In asserting its affirmative
defense, the employer claimed that it was forced to pay the
male vice-president more, not based on any sex-based wage
differential but in order to lure him away from his prior
employer. The court agreed and held that ``salary matching and
experience-based compensation are reasonable, gender-neutral
business tactics, and therefore qualify as a ``factor other
than sex.''\147\
---------------------------------------------------------------------------
\147\Drury v. Waterfront Media, Inc., 05 Civ. 10646 (JSR), 2007
U.S. Dist. LEXIS 18435 (S.D.N.Y. Mar. 8, 2007).
---------------------------------------------------------------------------
The same conclusion was reached in Glunt v. GES Exposition
Services,\148\ where the plaintiff brought a claim that her
employer violated the EPA in two ways. First, she alleged that
in her capacity as a project coordinator she was paid less than
three male co-workers while performing essentially the same
function. Second, she alleged that after being promoted to
account executive, her employer failed to raise her salary to a
level parallel to the starting salaries of the three male
account executives. The court found that in each case, factors
other than sex justified the employer paying Glunt less than
her similarly situated male co-workers.
---------------------------------------------------------------------------
\148\Glunt v. GES Exposition Servs., 123 F. Supp. 2d 847 (D. Md.
2000).
---------------------------------------------------------------------------
In its decision, the court noted that ``offering a higher
starting salary in order to induce a candidate to accept the
employer's offer over competing offers has been recognized as a
valid factor other than sex justifying a wage disparity.''\149\
Furthermore, ``prior salary may be one of several gender-
neutral factors employed in setting the higher salary of a male
coming in from the outside.''\150\ In cases where a male
employee is transferred or reassigned, ``it is widely
recognized that an employer may continue to pay [a transferred
or reassigned employee] his or her previous higher wage without
violating the EPA, even though the current work may not justify
the higher wage.''\151\
---------------------------------------------------------------------------
\149\Id. at 859.
\150\Id.
\151\Id.
---------------------------------------------------------------------------
Several other court decisions have similarly upheld such
pay disparities. In Horner v. Mary Institute,\152\ the Eighth
Circuit allowed a private school to justify paying a male
teacher it wanted to hire from the outside more pay because
such payment was necessary to secure him for the position. In
Engelmann v. NBC,\153\ the court found that ``salary matching''
was a valid defense to pay disparity. In Sobol v. Kidder,
Peabody & Company,\154\ the court held that a pay disparity is
permissible when an employer paid males more as a ``premium to
attract and hire talented new bankers.''\155\
---------------------------------------------------------------------------
\152\Horner v. Mary Inst., 613 F.2d 706 (8th Cir. 1980).
\153\Engelmann v. Nat'l Broad. Co., 94 Civ. 5616 (MBM), 1996 U.S.
Dist. LEXIS 1865 (S.D.N.Y. Feb. 22, 1996).
\154\Sobol v. Kidder, Peabody & Co., 49 F. Supp. 2d 208, 220
(S.D.N.Y. 1999).
\155\Id.
---------------------------------------------------------------------------
While the EPA affords employers opportunities to defend
their practices, the ``factor other than sex'' defense under
the EPA has been interpreted by the courts so broadly that
nearly any explanation for a wage differential is acceptable.
This is one of the main loopholes found in the EPA that has
perpetuated the gender-wage gap. The Paycheck Fairness Act
resolves this loophole by requiring that the EPA's affirmative
defense of ``any factor other than sex'' must be clarified to
require that the factor be job-related, not derived or based
upon a sex-based differential, and consistent with business
necessity.
Under Title VII, in order to justify an employment practice
that has the effect of discriminating against an employee on
the basis of race, color, religion, national origin, or sex
(i.e., a disparate impact case), an employer must assert that
the practice is consistent with business necessity. Like a
disparate impact case under Title VII, cases brought under the
EPA do not require a showing of intent. So, just as a practice
(which includes the payment of wages) that may be ``fair in
form but discriminatory in operation''\156\ is prohibited under
Title VII, the same is true with regard to the EPA.
---------------------------------------------------------------------------
\156\Griggs v. Duke Power, 515 F.2d 86 (4th Cir. 1975).
---------------------------------------------------------------------------
Both Title VII and the EPA afford the employer
opportunities to defend their practices, but as previously
explained, the ``factor other than sex'' defense under the EPA
has been interpreted by the courts so broadly that nearly any
explanation for a wage differential is acceptable. This is one
of the main reasons that the EPA is ineffective.\157\
---------------------------------------------------------------------------
\157\H.R. Rep. No. 110-783 at 12 (2008) (internal citations and
quotations omitted).
---------------------------------------------------------------------------
The business necessity defense originated in the case of
Griggs v. Duke Power Company,\158\ decided in 1975. In that
case, the Supreme Court determined that an employment practice
that resulted in the exclusion of Black employees from certain
jobs could only be justified in the case of ``business
necessity.''\159\ However, because the Court also introduced
the concept of ``job relatedness,'' and it appeared to use the
two concepts interchangeably, there was some confusion over the
years as what the correct standard should be.\160\ This
culminated in the case of Wards Cove Packing Company,
Incorporated, et al. v. Atonio et al.,\161\ where the Court
abandoned the concept of business necessity altogether:
---------------------------------------------------------------------------
\158\Griggs v. Duke Power, 401 U.S. 424 (1971).
\159\Id. at 431.
\160\See Earl M. Maltz, The Legacy of Griggs v. Duke Power Co.: A
Case Study in the Impact of a Modernist Statutory Precedent, 1994 Utah
L. Rev. 1353, 1371-72 (1994).
\161\Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989).
[T]he dispositive issue is whether a challenged
practice serves, in a significant way the legitimate
employment goals of the employer [citations omitted].
The touchstone of this inquiry is a reasoned review of
the employer's justification for his use of the
challenged practice. A mere insubstantial justification
will not suffice
. . . [a]t the same time, though, there is no
requirement that the challenged practice be
``essential'' or ``indispensable'' to the employer's
business.\162\
---------------------------------------------------------------------------
\162\Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 659 (1989).
Congress responded with the passage of the Civil Rights Act
of 1991, which overturned Wards Cove Packing and enshrined the
business necessity defense into law in Title VII cases of
disparate impact.\163\ Subsequent cases applying the business
necessity standard illustrate that the more rigorous showing an
employer must make to justify disparate treatment furthers the
remedial purposes of Title VII.\164\
---------------------------------------------------------------------------
\163\Civil Rights Act of 1991, Pub. L. No. 102-166, Sec. 2, 105
Stat. 1071.
\164\Lanning v. SEPTA, 308 F.3d 286 (3d. Cir. 2002); see also
United States v. Delaware, Civ. A. No. 01-020-KAJ, 2004 U.S. Dist.
LEXIS 4560 (D. Del. March 22, 2004).
---------------------------------------------------------------------------
The Paycheck Fairness Act strengthens the EPA by insisting
that the ``factor other than sex'' defense be limited to a
legitimate business purpose.\165\ Requiring an employer to show
that a job is consistent with business necessity applies a term
that is already specifically defined in civil rights law and
thereby provides workers and employers with a known legal
standard for assessing pay disparities.\166\
---------------------------------------------------------------------------
\165\Yang Testimony at 8.
\166\H.R. Rep. No. 110-783 at 12 (2008) (internal citations and
quotations omitted).
---------------------------------------------------------------------------
Class actions
The EPA requires plaintiffs to affirmatively ``opt-in'' to
a collective action.\167\ This is contrary to other employment
discrimination laws, which allow women with a pay
discrimination claim within a certified class to ``opt-out'' of
a multiple-claim case pursuant to Rule 23 of the Federal Rules
of Civil Procedure.\168\ Title VII, for example, provides for
claimants to ``opt-out'' of multi-party claims.\169\
---------------------------------------------------------------------------
\167\Class-action lawsuits filed under the EPA are called
collective actions because plaintiffs must ``opt-in'' in order to
participate.
\168\Yang Testimony at 13.
\169\42 U.S.C. Sec. 2000e-2(n).
---------------------------------------------------------------------------
The current EPA rule excludes workers who may not be aware
they have a claim and also excludes workers who may even be
aware they have a claim but are afraid that they will be
retaliated against in the workplace if they affirmatively opt-
in. H.R. 7 puts claimants under the EPA in the same position as
other victims of discrimination who automatically become part
of a class-action unless they affirmatively opt-out of the
class.\170\
---------------------------------------------------------------------------
\170\Goss Graves Testimony at 10.
---------------------------------------------------------------------------
Damages
Damages under the EPA are limited to backpay and liquidated
damages in the form of double back pay. No compensatory or
punitive damages are available under the EPA, and liquidated
damages may only be recovered if the employer fails to
demonstrate good faith and reasonable grounds for believing it
complied with the law.\171\ By contrast, claims for
discrimination based on race and national origin under Title
VII permit successful complainants to recover compensatory and
punitive damages, except that damages under Title VII are
capped depending on the size of the employer.\172\ ``For a
plaintiff succeeding in a Title VII case against an employer
with 15-100 employees, damages are capped at $50,000, no matter
how severe the harassment or how culpable the employer. Even
for employers with more than 500 employees, damages are capped
at $300,000.''\173\ The lack of punitive or compensatory
damages in the EPA, as well as caps on damages in Title VII,
does little to further the actual purpose of punitive damages,
which is to punish the defendant and deter future misconduct by
the defendant and others similarly situated.\174\
---------------------------------------------------------------------------
\171\29 U.S.C. Sec. 260.
\172\42 U.S.C. Sec. 1981a (Section 1981 of the Civil Rights Act of
1866, forbids discrimination on the basis of race or national origin in
the making and enforcement of contracts. Plaintiffs in Section 1981
cases may recover compensatory and punitive damages. However, unlike
gender discrimination claims under Title VII, damages sought pursuant
to Section 1981 are not limited.).
\173\Nat'l Women's Law Ctr., #Metoowhatnext: Strengthening
Workplace Sexual Harassment Protections and Accountability 4 (2017),
https://nwlc.org/wp-content/uploads/2017/12/MeToo-Strengthening-
Workplace-Sexual-Harassment-Protections.pdf.
\174\Vanessa Ruggles, The Ineffectiveness of Capped Damages in
Cases of Employment Discrimination: Solutions Toward Deterrence, 6
Conn. Pub. Interest L.J. 143, 147 (2006); see also Kemezy v. Peters, 79
F.3d 33, 34 (7th Cir. 1996) (noting that ``deterrence is a purpose of
punishment, rather than, as the formulation implies, a parallel
purpose, along with punishment itself, for imposing the specific form
of punishment that is punitive damages.'').
---------------------------------------------------------------------------
``These limitations on remedies not only deprive women
subjected to wage discrimination of full relief--they also
substantially limit the deterrent effect of the Equal Pay
Act.''\175\ Fatima Goss Graves, testifying at the 2021 Joint
Subcommittee Hearing, explained:
---------------------------------------------------------------------------
\175\Goss Graves Testimony at 11.
Limited remedies and damages caps mean that employers
can refrain from addressing, or even examining, pay
disparities in their workforces without fear of
substantial penalties for this failure. Arbitrary
limits on damages also encourage employers to frame the
discrimination faced by women of color as only sex-
based, and therefore subject to limitations--ignoring
the complex nature of the discrimination employees have
suffered.\176\
---------------------------------------------------------------------------
\176\Id.
The Paycheck Fairness Act provides for uncapped damages
under the EPA so that damages for discrimination based upon sex
are consistent with damages for discrimination based upon race
and national origin.
The injustice of capped damages is illustrated in Brady v.
Wal-Mart Stores, Incorporated.\177\ In this case, the plaintiff
Patrick Brady brought a suit against Wal-Mart and the store
manager, alleging violations of the Americans with Disabilities
Act of 1990 (ADA) and the New York Human Rights Law. In his
suit, Brady, who has cerebral palsy, claimed Wal-Mart subjected
him to adverse work conditions and a hostile work environment
based on his disability. The jury agreed with Brady and awarded
him a settlement for back pay and emotional pain and suffering,
as well as a $5 million award in punitive damages.
Unfortunately, the ADA's remedies are capped, and the judge was
required to reduce the award to $300,000.\178\ In his opinion,
Judge Orenstein stated that his ruling ``respects the law, but
it does not achieve a just result,''\179\ especially for one of
the biggest companies in America.\180\
---------------------------------------------------------------------------
\177\Brady v. Wal-Mart Stores, Inc., CV 03-3843 (JO), 2005 U.S.
Dist. LEXIS 12151 ( E.D.N.Y. June 21, 2005).
\178\Id.
\179\Id. at *10.
\180\Id.
---------------------------------------------------------------------------
Punitive damages, especially uncapped punitive damages, are
necessary to deter unscrupulous businesses from harming workers
and consumers to gain a competitive advantage.\181\ Often,
without punitive damages, a business may treat its labor
violations as merely a cost of doing business.
---------------------------------------------------------------------------
\181\Michael L. Rustad, In Defense of Punitive Damages in Products
Liability: Testing Tort Anecdotes with Empirical Data, 78 Iowa L. Rev.
1, 12 (1992).
---------------------------------------------------------------------------
There is precedent for uncapped damages against employers
who intentionally discriminate;\182\ damages awarded under
Section 1981 for race or national origin discrimination are not
subject to statutory limitations. Additionally, some states
allow for uncapped compensatory and punitive damages within
their antidiscrimination laws.\183\
---------------------------------------------------------------------------
\182\42 U.S.C. Sec. 1981.
\183\California, Hawaii, Massachusetts, New Jersey, Ohio, Oregon,
Vermont, and West Virginia do not limit plaintiffs' compensatory and
punitive damages, ensuring that victims of harassment can be fully
compensated for the harm they suffered. Nat'l Women's Law Ctr.,
#Metoowhatnext: Strengthening Workplace Sexual Harassment Protections
and Accountability 4 (2017), https://nwlc.org/wp-content/uploads/2017/
12/MeToo-Strengthening-Workplace-Sexual-Harassment-Protections.pdf.
---------------------------------------------------------------------------
It is important to note that courts generally do not award
unjustifiable or excessive damages and instead base relief upon
sound factors, such as the willfulness or egregiousness of the
violation\184\ and the effectiveness of damages as a
deterrent.\185\ Because decisions are made by each court on a
case by case basis, courts can strike the needed balance
between assessing damages based upon particular facts and
circumstances and assessing the severity of the
discrimination.\186\ The Paycheck Fairness Act provides for
uncapped damages in order to strengthen the EPA as a vehicle
for addressing unlawful pay disparities. Longstanding judicial
discretion under Section 1981 directly addresses and alleviates
concerns about frivolous and excessive claims for relief.\187\
---------------------------------------------------------------------------
\184\See Beauford v. Sisters of Mercy-Province of Detroit, Inc.,
816 F.2d 1104 (6th Cir. 1987) (finding that it is improper to award
punitive damages in the absence of evidence of egregious conduct,
willfulness, or malice on the part of the employer).
\185\See Lust v. Sealy, Inc., 383 F.3d 580 (7th Cir. 2004) (finding
that the employer's discriminatory act was minor and quickly remedied;
reducing the punitive award amount; reasoning that a higher penalty
would remove the monetary incentive to remedy minor violations).
\186\Id.
\187\See Jones v. W. Geophysical Co., 761 F.2d 1158 (5th Cir. 1985)
(finding that an employer engaged in racial discrimination need not pay
punitive damages to plaintiff if said employer is taking steps to
eliminate discrimination, and if evidence against employer is, at
times, ambiguous and does not necessarily lead to the conclusion that
the employer behaved maliciously in practice of racial discrimination).
---------------------------------------------------------------------------
Retaliation for discussing or disclosing salary information
The EPA does not explicitly protect employees who discuss
or disclose salary information. As previously noted, many
employers discourage and may even have workplace policies
against sharing salary information among coworkers. This makes
it extremely difficult to detect pay discrimination. For
example, in Ledbetter v. Goodyear Tire,\188\ the plaintiff did
not discover that she was paid less than her male co-workers
for years; company policy had prohibited her from discussing
her pay with her co-workers. The only reason she discovered the
pay discrimination was because someone sent her an anonymous
note.\189\
---------------------------------------------------------------------------
\188\ Ledbetter v. Goodyear Tire & Rubber Co. Inc., 127 S. Ct. 2162
(2007).
\189\ Id.
---------------------------------------------------------------------------
As Fatima Goss Graves testified at the 2021 Joint
Subcommittee Hearing:
About 60% of workers in the private sector nationally
are either forbidden or strongly discouraged from
discussing their pay with their colleagues. The
significantly narrower gender wage gap for employees
working in the public sector--where pay secrecy rules
are uncommon and pay is often publicly disclosed--
suggests the difference that transparency makes. Only
15.1% of public sector employees report that discussing
their wages is either prohibited or discouraged. In the
federal government, where pay rates and scales are more
transparent and publicly available, and unionization
rates are higher, the overall gender wage gap is 7%--
significantly smaller than the overall gender wage gap
of 18%.\190\
---------------------------------------------------------------------------
\190\ Goss Graves Testimony at 5-6 (internal citations omitted).
Employers are prohibited from retaliating against employees
who seek to assert their rights under the FLSA. This protection
extends to women claiming an EPA violation who have filed,
instituted, initiated, or participated in any capacity in a
proceeding under or related to the FLSA.\191\ However, in some
cases interpreting the anti-retaliatory provision,\192\ courts
have limited the protection afforded by the anti-retaliation
provision, particularly denying protection when they find that
an aggrieved worker has not stepped outside her role
representing the employer.
---------------------------------------------------------------------------
\191\ 29 U.S.C. Sec. 215(a)(3).
\192\ Id.
---------------------------------------------------------------------------
For example, in McKenzie v. Reinberg's Inc.,\193\ the
plaintiff alleged that she was fired in violation of the FLSA's
anti-retaliation provision because she questioned whether her
employer complied with the overtime provisions of the FLSA. The
plaintiff was a personnel director who, as part of her job,
monitored compliance with state and federal wage and hour laws.
After attending a training on the FLSA, she determined that her
employer was likely in violation of the law's overtime
provisions. She brought this to her employer's attention and
was fired as a result.\194\ The court held that because
McKenzie merely articulated her concerns about the wage and
hour violations with her employer:
---------------------------------------------------------------------------
\193\ McKenzie v. Renberg's Inc., 94 F.3d 1478 (10th Cir. 1996).
\194\ Id.; see also Hagan v. Echostar, 529 F.3d 617 (2008) (finding
that the plaintiff was not protected from termination after
participating in activities that were ``neither adverse to the company
nor supportive of adverse action to the company'').
[She] did not engage in activity protected under
Sec. 215(a)(3). To qualify for the protections, the
employee must step outside his or her role of
representing the company and either file (or threaten
to file) an action adverse to the employer, actively
assist other employees in asserting FLSA rights, or
otherwise, engage in activity that reasonably could be
perceived as directed towards the assertion of rights
protected by the FLSA.\195\
---------------------------------------------------------------------------
\195\ McKenzie v. Renberg's Inc., 94 F.3d 1478, 1487 (10th Cir.
1996).
A key component in eliminating the wage gap is protecting
workers who discuss wages or participate in an EPA suit by
ensuring that they can do so without fear of reprimand. Even
when employers do not have explicit policies ``legal or not,
workers are expected to keep their lips sealed about their
salaries. It's the unwritten law.''\196\ As one employer
advised other employers, ``sit down with people, talk to them .
. . be clear: it's not OK to talk salary at the office.''\197\
---------------------------------------------------------------------------
\196\ H.R. Rep. No. 110-783, at 34-35 (2008).
\197\ Id.
---------------------------------------------------------------------------
H.R. 7 protects the rights of employees to discuss and
disclose wage information with each other in the workplace and
affirms the rights of workers to disclose this information as
part of an employer or government investigation. It also
protects workers who oppose unlawful discrimination. Its
provisions are intended to give robust protection to those
employees who act to oppose violations of the EPA, as well as
to provide a shield of protection for the kinds of discussions
that will allow employees to uncover unequal pay. However, H.R.
7 recognizes that employers may entrust some employees with
access to wage information as part of an essential function of
their job. These confidential employees will not be protected
for disclosing information about wages to those who do not
otherwise have access to the information. However, they could:
(1) disclose their own wages; (2) disclose wage issues ``up the
chain'' or ``horizontally'' if they become aware of potential
pay discrimination regarding other employees; or (3) disclose
wages in response to or in furtherance of an employer or
government investigation or other proceeding under H.R. 7.
Prior salary history
H.R. 7 provides:
It shall be an unlawful practice for an employer to
(1) rely on the wage history of a prospective employee
in considering the prospective employee for employment,
including requiring that a prospective employee's prior
wages satisfy minimum or maximum criteria as a
condition of being considered for employment; (2) rely
on the wage history of a prospective employee in
determining the wages for such prospective employee,
except that an employer may rely on wage history if it
is voluntarily provided by a prospective employee,
after the employer makes an offer of employment with an
offer of compensation to the prospective employee, to
support a wage higher than the wage offered by the
employer; (3) seek from a prospective employee or any
current or former employer the wage history of the
prospective employee, except that an employer may seek
to confirm prior wage information only after an offer
of employment with compensation has been made to the
prospective employee and the prospective employee
responds to the offer by providing prior wage
information to support a wage higher than that offered
by the employer.\198\
---------------------------------------------------------------------------
\198\H.R. 7, 116th Cong. Sec. 10(a) (2019).
With this provision, the Paycheck Fairness Act prevents
employers from seeking or relying on a prospective employee's
wage or salary history that has been sought from the
prospective employee or their former employer. The employer can
only rely on the prospective employee's prior wage if it is
voluntarily provided by the prospective employee after the
employer has made an offer of employment. The employer may seek
a prospective (or current) employee's wage history to confirm
prior wage information after the employer has made an
employment offer. The Act does not provide for a complete ban
on the usage of an individual's salary history.
H.R. 7's requirements are similar to other anti-
discrimination statutes like the ADA and the Genetic
Information Nondiscrimination Act (GINA), which have been
valuable tools in fighting against other forms of
discrimination. The ADA prohibits employers from asking job
applicants disability-related questions and forbids employers
from relying on disability status in making employment
decisions. Similarly, GINA prohibits employers from relying on
genetic history when making an employment decision, and it also
restricts employers' and employment agencies' ability to
``request, require, or purchase genetic information'' regarding
applicants and employees or their family members.\199\ In all
three cases, the restrictions on pre-employment inquiries are
necessary to advance the government's compelling interest in
eliminating unlawful discrimination.
---------------------------------------------------------------------------
\199\See Facts about the Genetic Information Nondiscrimination Act,
EEOC, https://www.eeoc.gov/eeoc/publications/fs-gina.cfm (last visited
Mar. 11, 2019).
---------------------------------------------------------------------------
Joint EEOC-OFCCP enforcement
In the Reorganization Act of 1977,\200\ Congress authorized
the President to restructure Executive branch agencies to
``promote the better execution of the laws.''\201\
Reorganization Plan No. 1 of 1978\202\ transferred all
functions related to enforcing or administering the EPA from
the DOL to the EEOC. In response to the U.S. Supreme Court's
ruling in I.N.S. v. Chadha,\203\ in 1984, Congress passed
legislation codifying each part of the initial reorganization
plan, thus solidifying EEOC's enforcement authority over the
EPA. H.R. 7 would ensure that the EEOC and the OFCCP have joint
enforcement authority of the EPA over federal contracts. This
will not impact the EEOC's ability to adopt separate,
additional, or different policies for other private sector
employers under the EPA.
---------------------------------------------------------------------------
\200\5 U.S.C. Sec. 901.
\201\Id.
\202\43 Fed. Reg. 19,807 (July 1, 1978).
\203\462 U.S. 919 (1983).
---------------------------------------------------------------------------
Section-by-Section Analysis
Section 1. Short title
This section states that the title of the bill is the
Paycheck Fairness Act (the Act).
Section 2. Enhanced enforcement of equal pay requirements
Definitions. This section clarifies that the definition of
``sex'' includes sex stereotypes, pregnancy, childbirth or a
related medical condition, sexual orientation or gender
identity, and sex characteristics including intersex traits.
Bona Fide Factor Defense and Modification of Same
Establishment Requirement. This section amends the EPA by
defining the statute's ``any factor other than sex'' employer
affirmative defense as requiring employers to provide non-
gender, business reasons for the difference in wages. The
amended language lays out the requirement that to successfully
raise this affirmative defense, an employer must demonstrate
that the wage disparity is based on a bona fide factor other
than sex, such as education, training, or experience. The
differential must be: (1) not based upon or derived from a sex-
based differential in compensation; (2) related to the position
in question; (3) consistent with business necessity; and (4)
fully accounted for in the compensation at issue. Such defense
shall not apply if the employee can then demonstrate that her
employer has an alternative employment practice that would
serve the same business purpose without producing the pay
differential, and the employer refused to adopt the alternative
practice.
This section broadens the definition of ``establishment''
used to compare compensation with the compensation of an
employee of the opposite gender who performs substantially
equal work. Under the Act, an establishment now includes
workplaces located in the same county or similar political
subdivision of a state. In addition, the Act allows broader
applications of the term ``establishment'' as long as they are
consistent with EEOC.
Nonretaliation Provision. This section protects employees
from retaliation for seeking redress, inquiring about an
employer's wage practices, or disclosing their own wages to
coworkers. This section provides that employers are prohibited
from retaliating against employees who have made a charge;
filed any complaint; instituted any investigation, proceeding,
hearing, or action under the EPA; or opposed unlawful actions
under the Act. Employers are also prohibited from requiring an
employee to sign a contract or waiver that would prohibit the
employee from disclosing their wages. Employees are protected
from retaliation for initiating an employer investigation, or
for testifying or participating in any sort of investigation,
proceeding, hearing, or action. Employees are also protected
from inquiries and discussions about each other's wages.
This section does not provide anti-retaliation protections
to employees with access to wage information of other employees
as an essential function of their job if they disclose that
wage information to individuals who do not otherwise have
access to this information. However, they would be protected if
they were disclosing that wage information to someone who also
has access to such information, or the disclosure was in
response to a complaint or charge or in furtherance of an
investigation, proceeding, hearing, or action under the EPA,
including an internal employer investigation.
Enhanced Penalties. This section provides that uncapped
compensatory and punitive damages are available in private EPA
suits and suits brought by the Secretary of Labor. This section
provides that class action lawsuits brought under the EPA shall
proceed as opt-out class actions in conformity with the Federal
Rules of Civil Procedure, rather than the current law requiring
plaintiffs to opt-in. This section requires the EEOC and the
OFCCP to jointly enforce the Act with respect to federal
contractors.
Section 3. Training
This section requires the EEOC and the OFCCP to provide
training to both the EEOC and the OFCCP employees and affected
individuals on pay discrimination.
Section 4. Negotiation skills training
Program Authorization. This section authorizes the
Secretary of Labor (after consultation with the U.S. Secretary
of Education) to establish and carry out a grant program to
provide negotiation skills training programs that aim to
address all pay disparities, including through outreach to
women and girls. Eligible entities apply to the Secretary of
Labor to obtain grants. Eligible entities include states, local
governments, state or local educational agencies, private
nonprofit organizations, or community-based organizations.
Incorporating Training into Existing Programs. This section
requires the Secretary of Labor to issue regulation or policy
guidance on how it will, to the extent practicable, integrate
negotiation skills training into existing education and work
training programs, including those authorized under the
Elementary and Secondary Education Act, the Carl D. Perkins
Career and Technical Education Act, the Higher Education Act,
and the Workforce Innovation and Opportunity Act.
Report. This section mandates the Secretary of Labor, in
consultation with the U.S. Secretary of Education, to submit an
annual report to Congress on the grant program.
Section 5. Research, education, and outreach
This section requires the Secretary of Labor to conduct
studies and provide information to employers, labor
organizations, and the public on ways to eliminate pay
disparities. This includes conducting and promoting research,
publishing and making available findings from studies and other
materials; sponsoring and assisting state and community
informational and educational programs; providing information
on the means of eliminating pay disparities; and recognizing
and promoting achievements.
Section 6. Establishment of the National Award for Pay Equity in the
Workplace
This section establishes an annual award entitled the
``Secretary of Labor's National Award for Pay Equity in the
Workplace'' for an employer that demonstrates substantial
effort in eliminating pay disparities by complying with the
EPA. The Secretary of Labor, in consultation with the EEOC,
will set the criteria for the award. Eligible employers include
corporations (including nonprofit corporations); partnerships;
professional associations; labor organizations; and entities
carrying out educational referral programs or training
programs.
Section 7. Collection of pay information by the Equal Employment
Opportunity Commission
This section requires the EEOC, within 18 months of
enactment, to issue regulations to provide for the collection
of compensation data, including hiring, termination, and
promotion data, and other employment-related data from
employers. This information will be disaggregated by the sex,
race and national origin of employees. In collecting this data,
the EEOC will consider the most effective and least burdensome
means for enforcing the federal laws prohibiting pay
discrimination, including the consideration of employer burden.
This section requires that the compensation data the EEOC
collects be taxable compensation data. This data must be
collected from employers in accordance with twelve ``pay
bands'' listed in the section, and it may be adjusted for
inflation.
Section 8. Reinstatement of pay equity programs and pay equity data
collection
Bureau of Labor Statistics. This section requires the
continued collection by the Commissioner of Labor Statistics of
gender-based data in the Current Employment Statistics survey.
Office of Federal Contract Compliance Programs. This
section directs the OFCCP to collect compensation and other
employment data by demographics. It requires the Secretary of
Labor to make available information on pay information
including analyses of discrimination.
Section 9. Prohibitions relating to prospective employees' salary and
benefit history
This section makes it unlawful for employers to use wage
history to decide whether to hire a prospective employee.
Employers are prohibited from relying on or seeking a
prospective employee's wage history to determine their wages.
The employer can only rely on the prospective employee's prior
wage if the employee voluntarily provides it after the employer
makes an employment offer. Similarly, the employer may only
seek a prospective employee's wage history to confirm prior
wage information. The employer can obtain this information only
after an employment offer (with compensation) has been made,
and the employee responded by volunteering the prior wage
information. An employer may not retaliate against an employee
or prospective employee who has filed a complaint regarding the
use of the salary history. Employers who violate this provision
are subject to civil penalties.
Section 10. Authorization of appropriations
This section authorizes such sums as may be necessary to
carry out the Act.
Section 11. Small business assistance
Effective Date. This section states that the Act and
amendments made by the Act will take effect six months after
the date of enactment.
Small Business. This section also requires the Secretary of
Labor and the EEOC to jointly develop technical assistance
materials to assist small businesses in complying with the Act.
It further clarifies that to the extent small businesses are
exempt from the FLSA, they will also be exempt from the Act.
Section 12. Rule of construction
This section states that nothing in the Act will affect the
obligation of employers and employees to fully comply with all
applicable immigration laws.
Section 13. Severability
This section adds a standard severability clause.
Explanation of Amendments
The Amendment in the Nature of a Substitute is explained in
the descriptive portions of this report.
Application of Law to the Legislative Branch
Pursuant to section 102(b)(3) of the Congressional
Accountability Act, Pub. L. No. 104-1, H.R. 7, as amended,
applies to terms and conditions of employment within the
legislative branch by amending the EPA and the FLSA.
Unfunded Mandate Statement
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended
by Section 101(a)(2) of the Unfunded Mandates Reform Act of
1995, Pub. L. No. 104-4), the Committee traditionally adopts as
its own the cost estimate prepared by the Director of the
Congressional Budget Office (CBO) pursuant to section 402 of
the Congressional Budget and Impoundment Control Act of 1974.
The Committee reports that because this cost estimate was not
timely submitted to the Committee before the filing of this
report, the Committee is not in a position to make a cost
estimate for H.R. 7, as amended.
Earmark Statement
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 7 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as described in clauses 9(e), 9(f), and 9(g) of rule
XXI.
Roll Call Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following roll call votes occurred during the Committee's
consideration of H.R. 7:
Statement of Performance Goals and Objectives
Pursuant to clause (3)(c) of rule XIII of the Rules of the
House of Representatives, H.R. 7 would strengthen current law
in an effort to close the gender pay gap and provide more
effective remedies to victims of discrimination in the payment
of wages on the basis of gender.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of H.R. 7 establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
federal program, a program that was included in any report from
the Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139, or a program related to a
program identified in the most recent Catalog of Federal
Domestic Assistance.
Hearings
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the Committee held a hearing entitled
``Fighting for Fairness: Examining Legislation to Confront
Workplace Discrimination,'' which was used to consider H.R. 7.
The Committee heard testimony on how the weaknesses in the EPA
have left the law ineffective in preventing gender-based wage
discrimination. Witnesses included Fatima Goss Graves, CEO and
President of the National Women's Law Center, Washington, DC;
Camille A. Olson, Partner at Seyfarth Shaw, LLP, Chicago, IL;
Dina Bakst, Co-Founder & Co-President, A Better Balance: The
Work & Family Legal Center, New York City, NY; and Laurie
McCann, Senior Attorney, AARP, Washington, DC.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the descriptive portions of this report.
New Budget Authority and CBO Cost Estimate
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives and section 308(a) of the
Congressional Budget and Impoundment Control Act of 1974, and
pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives and section 402 of the Congressional
Budget and Impoundment Control Act of 1974, the Committee has
requested but not received a cost estimate for the bill from
the Director of the Congressional Budget Office.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 7. However,
clause 3(d)(2)(B) of that rule provides that this requirement
does not apply when the committee has included in its report a
timely submitted cost estimate of the bill prepared by the
Director of the Congressional Budget Office under section 402
of the Congressional Budget and Impoundment Control Act of
1974. The Committee reports that because this cost estimate was
not timely submitted to the Committee before the filing of this
report, the Committee is not in a position to make a cost
estimate for H.R. 7, as amended.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, H.R. 7, as reported, are shown as follows:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
FAIR LABOR STANDARDS ACT OF 1938
* * * * * * *
definitions
Sec. 3. As used in this Act--
(a) ``Person'' means an individual, partnership, association,
corporation, business trust, legal representative, or any
organized group of persons.
(b) ``Commerce'' means trade, commerce, transportation,
transmission, or communication among the several States or
between any State and any place outside thereof.
(c) ``State'' means any State of the United States or the
District of Columbia or any Territory or possession of the
United States.
(d) ``Employer'' includes any person acting directly or
indirectly in the interest of an employer in relation to an
employee and includes a public agency, but does not include any
labor organization (other than when acting as an employer) or
anyone acting in the capacity of officer or agent of such labor
organization.
(e)(1) Except as provided in paragraphs (2), (3), and (4),
the term ``employee'' means any individual employed by an
employer.
(2) In the case of an individual employed by a public agency,
such term means--
(A) any individual employed by the Government of the
United States--
(i) as a civilian in the military departments
(as defined in section 102 of title 5, United
States Code),
(ii) in any executive agency (as defined in
section 105 of such title),
(iii) in any unit of the judicial branch of
the Government which has positions in the
competitive service,
(iv) in a nonappropriated fund
instrumentality under the jurisdiction of the
Armed Forces,
(v) in the Library of Congress, or
(vi) the Government Printing Office;
(B) any individual employed by the United States
Postal Service or the Postal Rate Commission; and
(C) any individual employed by a State, political
subdivision of a State, or an interstate governmental
agency, other than such an individual--
(i) who is not subject to the civil service
laws of the State, political subdivision, or
agency which employs him; and
(ii) who--
(I) holds a public elective office of
that State, political subdivision, or
agency,
(II) is selected by the holder of
such an office to be a member of his
personal staff,
(III) is appointed by such an
officeholder to serve on a policymaking
level,
(IV) is an immediate adviser to such
an officeholder with respect to the
constitutional or legal powers of his
office, or
(V) is an employee in the legislative
branch or legislative body of that
State, political subdivision, or agency
and is not employed by the legislative
library of such State, political
subdivision, or agency.
(3) For purposes of subsection (u), such term does not
include any individual employed by an employer engaged in
agriculture if such individual is the parent, spouse, child, or
other member of the employer's immediate family.
(4)(A) The term ``employee'' does not include any individual
who volunteers to perform services for a public agency which is
a State, a political subdivision of a State, or an interstate
governmental agency, if--
(i) the individual receives no compensation or is
paid expenses, reasonable benefits, or a nominal fee to
perform the services for which the individual
volunteered; and
(ii) such services are not the same type of services
which the individual is employed to perform for such
public agency.
(B) An employee of a public agency which is a State,
political subdivision of a State, or an interstate governmental
agency may volunteer to perform services for any other State,
political subdivision, or interstate governmental agency,
including a State, political subdivision or agency with which
the employing State, political subdivision, or agency has a
mutual aid agreement.
(5) The term ``employee'' does not include individuals who
volunteer their services solely for humanitarian purposes to
private non-profit food banks and who receive from the food
banks groceries.
(f) ``Agriculture'' includes farming in all its branches and
among other things includes the cultivation and tillage of the
soil, dairying, the production, cultivation, growing, and
harvesting of any agricultural or horticultural commodities
(including commodities defined as agricultural commodities in
section 15(g) of the Agricultural Marketing Act, as amended),
the raising of livestock, bees, fur-bearing animals, or
poultry, and any practices (including any forestry or lumbering
operations) performed by a farmer or on a farm as an incident
to or in conjunction with such farming operations, including
preparation for market, delivery to storage or to market or to
carriers for transportation to market.
(g) ``Employ'' includes to suffer or permit to work.
(h) ``Industry'' means a trade, business, industry, or other
activity, or branch or group thereof, in which individuals are
gainfully employed.
(i) ``Goods'' means goods (including ships and marine
equipment), wares, products, commodities, merchandise, or
articles or subjects of commerce of any character, or any part
or ingredient thereof, but does not include goods after their
delivery into the actual physical possession of the ultimate
consumer thereof other than a producer, manufacturer, or
processor thereof.
(j) ``Producer'' means produced, manufactured, mined,
handled, or in any manner worked on in any State; and for the
purposes of this Act an employee shall be deemed to have been
engaged in the production of goods if such employee was
employed in producing, manufacturing, mining, handling,
transporting, or in any other manner working on such goods, or
in any closely related process or occupation directly essential
to the production thereof, in any State.
(k) ``Sale'' or ``sell'' includes any sale, exchange,
contract to sell, consignment for sale, shipment for sale, or
other disposition.
(l) ``Oppressive child labor'' means a condition of
employment under which (1) any employee under the age of
sixteen years is employed by an employer (other than a parent
or a person standing in place of a parent employing his own
child or a child in his custody under the age of sixteen years
in an occupation other than manufacturing or mining or an
occupation found by the Secretary of Labor to be particularly
hazardous for the employment of children between the ages of
sixteen and eighteen years or detrimental to their health or
well-being) in any occupation, or (2) any employee between the
ages of sixteen and eighteen years is employed by an employer
in any occupation which the Secretary of Labor shall find and
by order declare to be particularly hazardous for the
employment of children between such ages or detrimental to
their health or well-being; but oppressive child labor shall
not be deemed to exist by virture of the employment in any
occupation of any person with respect to whom the employer
shall have on file an unexpired certificate issued and held
pursuant to regulations of the Secretary of Labor certifying
that such person is above the oppressive child labor age. The
Secretary of Labor shall provide by regulation or by order that
the employment of employees between the ages of fourteen and
sixteen years in occupations other than manufacturing and
mining shall not be deemed to constitute oppressive child labor
if and to the extent that the Secretary of Labor determines
that such employment is confined to periods which will not
interfere with their schooling and to conditions which will not
interfere with their health and well-being.
(m)(1) ``Wage'' paid to any employee includes the reasonable
cost, as determined by the Secretary of Labor, to the employer
of furnishing such employee with board, lodging, or other
facilities, if such board, lodging, or other facilities are
customarily furnished by such employer to his employees:
Provided, That the cost of board, lodging, or other facilities
shall not be included as a part of the wage paid to any
employee to the extent it is excluded therefrom under the terms
of a bona fide collective-bargaining agreement applicable to
the particular employee: Provided further, That the Secretary
is authorized to determine the fair value of such board,
lodging, or other facilities for defined classes of employees
and in defined areas, based on average cost to the employer or
to groups of employers similarly situated, or average value to
groups of employees, or other appropriate measures of fair
value. Such evaluations, where applicable and pertinent, shall
be used in lieu of actual measure of cost in determining the
wage paid to any employee.
(2)(A) In determining the wage an employer is required to pay
a tipped employee, the amount paid such employee by the
employee's employer shall be an amount equal to--
(i) the cash wage paid such employee which for
purposes of such determination shall be not less than
the cash wage required to be paid such an employee on
the date of the enactment of this paragraph; and
(ii) an additional amount on account of the tips
received by such employee which amount is equal to the
difference between the wage specified in clause (i) and
the wage in effect under section 6(a)(1).
The additional amount on account of tips may not exceed the
value of the tips actually received by an employee. The
preceding 2 sentences shall not apply with respect to any
tipped employee unless such employee has been informed by the
employer of the provisions of this subsection, and all tips
received by such employee have been retained by the employee,
except that this subsection shall not be construed to prohibit
the pooling of tips among employees who customarily and
regularly receive tips.
(B) An employer may not keep tips received by its employees
for any purposes, including allowing managers or supervisors to
keep any portion of employees' tips, regardless of whether or
not the employer takes a tip credit.
(n) ``Resale'' shall not include the sale of goods to be used
in residential or farm building construction, repair, or
maintenance: Provided, That the sale is recognized as a bona
fide retail sale in the industry.
(o) Hours Worked.--In determining for the purposes of
sections 6 and 7 the hours for which an employee is employed,
there shall be excluded any time spent in changing clothes or
washing at the beginning or end of each workday which was
excluded from measured working time during the week involved by
the express terms of or by custom or practice under a bona fide
collective-bargaining agreement applicable to the particular
employee.
(p) ``American vessel'' includes any vessel which is
documented or numbered under the laws of the United States.
(q) ``Secretary'' means the Secretary of Labor.
(r)(1) ``Enterprise'' means the related activities performed
(either through unified operation or common control) by any
person or persons for a common business purpose, and includes
all such activities whether performed in one or more
establishments or by one or more corporate or other
organizational units including departments of an establishment
operated through leasing arrangements, but shall not include
the related activities performed for such enterprise by an
independent contractor. Within the meaning of this subsection,
a retail or service establishment which is under independent
ownership shall not be deemed to be so operated or controlled
as to be other than a separate and distinct enterprise by
reason of any arrangement, which includes, but is not
necessarily limited to, an agreement, (A) that it will sell, or
sell only, certain goods specified by a particular
manufacturer, distributor, or advertiser, or (B) that it will
join with other such establishments in the same industry for
the purpose of collective purchasing, or (C) that it will have
the exclusive rights to sell the goods or use the brand name of
a manufacturer, distributor, or advertiser within a specified
area, or by reason of the fact that it occupies premises leased
to it by a person who also leases premises to other retail or
service establishments.
(2) For purposes of paragraph (1), the activities performed
by any person or persons--
(A) in connection with the operation of a hospital,
an institution primarily engaged in the care of the
sick, the aged, the mentally ill or defective who
reside on the premises of such institution, a school
for mentally or physicially handicapped or gifted
children, a preschool, elementary or secondary school,
or an institution of higher education (regardless of
whether or not such hospital, institution, or school is
operated for profit or not for profit), or
(B) in connection with the operation of a street,
suburban or interurban electric railway, or local
trolley or motorbus carrier, if the rates and services
of such railway or carrier are subject to regulation by
a State or local agency (regardless of whether or not
such railway or carrier is public or private or
operated for profit or not for profit), or
(C) in connection with the activities of a public
agency.
shall be deemed to be activities performed for a business
purpose.
(s)(1) ``Enterprise engaged in commerce or in the production
of goods for commerce'' means an enterprise that--
(A)(i) has employees engaged in commerce or in the
production of goods for commerce, or that has employees
handling, selling, or otherwise working on goods or
materials that have been moved in or produced for
commerce by any person; and
(ii) is an enterprise whose annual gross volume of
sales made or business done is not less than $500,000
(exclusive of excise taxes at the retail level that are
separately stated);
(B) is engaged in the operation of a hospital, an
institution primarily engaged in the care of the sick,
the aged, or the mentally ill or defective who reside
on the premises of such institution, a school for
mentally or physically handicapped or gifted children,
a preschool, elementary or secondary school, or an
institution of higher education (regardless of whether
or not such hospital, institution, or school is public
or private or operated for profit or not for profit);
or
(C) is an activity of a public agency.
(2) Any establishment that has as its only regular employees
the owner thereof or the parent, spouse, child, or other member
of the immediate family of such owner shall not be considered
to be an enterprise engaged in commerce or in the production of
goods for commerce or a part of such an enterprise. The sales
of such an establishment shall not be included for the purpose
of determining the annual gross volume of sales of any
enterprise for the purpose of this subsection.
(t) ``Tipped employee'' means any employee engaged in an
occupation in which he customarily and regularly receives more
than $30 a month in tips.
(u) ``Man-day'' means any day during which an employee
performs any agricultural labor for not less than one hour.
(v) ``Elementary school'' means a day or residential school
which provides elementary education, as determined under State
law.
(w) ``Secondary school'' means a day or residential school
which provides secondary education, as determined under State
law.
(x) ``Public agency'' means the Government of the United
States; the government of a State or political subdivision
thereof; any agency of the United States (including the United
States Postal Service and Postal Rate Commission), a State, or
a political subdivision of a State; or any interstate
governmental agency.
(y) ``Employee in fire protection activities'' means an
employee, including a firefighter, paramedic, emergency medical
technician, rescue worker, ambulance personnel, or hazardous
materials worker, who--
(1) is trained in fire suppression, has the legal
authority and responsibility to engage in fire
suppression, and is employed by a fire department of a
municipality, county, fire district, or State; and
(2) is engaged in the prevention, control, and
extinguishment of fires or response to emergency
situations where life, property, or the environment is
at risk.
(z) ``Sex'' includes--
(1) a sex stereotype;
(2) pregnancy, childbirth, or a related medical
condition;
(3) sexual orientation or gender identity; and
(4) sex characteristics, including intersex traits.
(aa) ``Sexual orientation'' includes homosexuality,
heterosexuality, and bisexuality.
(bb) ``Gender identity'' means the gender-related identity,
appearance, mannerisms, or other gender-related characteristics
of an individual, regardless of the individual's designated sex
at birth.
* * * * * * *
minimum wages
Sec. 6. (a) Every employer shall pay to each of his employees
who in any workweek is engaged in commerce or in the production
of goods for commerce, or is employed in an enterprise engaged
in commerce or in the production of goods for commerce, wages
at the following rates:
(1) except as otherwise provided in this section, not
less than--
(A) $5.85 an hour, beginning on the 60th day
after the date of enactment of the Fair Minimum
Wage Act of 2007;
(B) $6.55 an hour, beginning 12 months after
that 60th day; and
(C) $7.25 an hour, beginning 24 months after
that 60th day;
(2) if such employee is a home worker in Puerto Rico
or the Virgin Islands, not less than the minimum piece
rate prescribed by regulation or order; or, if no such
minimum piece rate is in effect, any piece rate adopted
by such employer which shall yield, to the proportion
or class of employees prescribed by regulation or
order, not less than the applicable minimum hourly wage
rate. Such minimum piece rates or employer piece rates
shall be commensurate with, and shall be paid in lieu
of, the minimum hourly wage rate applicable under the
provisions of this section. The Secretary of Labor, or
his authorized representative, shall have power to make
such regulations or orders as are necessary or
appropriate to carry out any of the provisions of this
paragraph, including the power without limiting the
generality of the foregoing, to define any operation or
occupation which is performed by such home work
employees in Puerto Rico or the Virgin Islands; to
establish minimum piece rates for any operation or
occupation so defined; to prescribe the method and
procedure for ascertaining and promulgating minimum
piece rates; to prescribe standards for employer piece
rates, including the proportion or class of employees
who shall receive not less than the minimum hourly wage
rate; to define the term ``home worker''; and to
prescribe the conditions under which employers, agents,
contractors, and subcontractors shall cause goods to be
produced by home workers;
(3) if such employee is employed as a seaman on an
American vessel, not less than the rate which will
provide to the employee, for the period covered by the
wage payment, wages equal to compensation at the hourly
rate prescribed by paragraph (1) of this subsection for
all hours during such period when he was actually on
duty (including periods aboard ship when the employee
was on watch or was, at the direction of a superior
officer, performing work or standing by, but not
including off-duty periods which are provided pursuant
to the employment agreement); or
(4) if such employee is employed in agriculture, not
less than the minimum wage rate in effect under
paragraph (1) after December 31, 1977.
(b) Every employer shall pay to each of his employees (other
than an employee to whom subsection (a)(5) applies) who in any
workweek is engaged in commerce or in the production of goods
for commerce, or is employed in an enterprise engaged in
commerce or in the production of goods for commerce, and who in
such workweek is brought within the purview of this section by
the amendments made to this Act by the Fair Labor Standards
Amendments of 1966, title IX of the Education Amendments of
1972, or the Fair Labor Standards Amendments of 1974, wages at
the following rate: Effective after December 31, 1977, not less
than the minimum wage rate in effect under subsection (a)(1).
(c)
(d)(1) [No employer having] (A) No employer having employees
subject to any provisions of this section shall discriminate,
within any establishment in which such employees are employed,
between employees on the basis of sex by paying wages to
employees in such establishment at a rate less than the rate at
which he pays wages to employees of the opposite sex in such
establishment for equal work on jobs the performance of which
requires equal skill, effort, and responsibility, and which are
performed under similar working conditions, except where such
payment is made pursuant to (i) a seniority system; (ii) a
merit system; (iii) a system which measures earnings by
quantity or quality or production; or (iv) a differential based
on [any other factor other than sex] a bona fide factor other
than sex, such as education, training, or experience: Provided,
That an employer who is paying a wage rate differential in
violation of this subsection shall not, in order to comply with
the provisions of this subsection, reduce the wage rate of any
employee.
(B) The bona fide factor defense described in subparagraph
(A)(iv) shall apply only if the employer demonstrates that such
factor (i) is not based upon or derived from a sex-based
differential in compensation; (ii) is job-related with respect
to the position in question; (iii) is consistent with business
necessity; and (iv) accounts for the entire differential in
compensation at issue. Such defense shall not apply where the
employee demonstrates that an alternative employment practice
exists that would serve the same business purpose without
producing such differential and that the employer has refused
to adopt such alternative practice.
(C) For purposes of subparagraph (A), employees shall be
deemed to work in the same establishment if the employees work
for the same employer at workplaces located in the same county
or similar political subdivision of a State. The preceding
sentence shall not be construed as limiting broader
applications of the term ``establishment'' consistent with
rules prescribed or guidance issued by the Equal Employment
Opportunity Commission.
(2) No labor organization, or its agents, representing
employees of an employer having employees subject to any
provisions of this section shall cause or attempt to cause such
an employer to discriminate against an employee in violation of
paragraph (1) of this subsection.
(3) For purposes of administration and enforcement, any
amounts owing to any employees which have been withheld in
violation of this subsection shall be deemed to be unpaid
minimum wages or unpaid overtime-compensation under this Act.
(4) As used in this subsection, the term ``labor
organization'' means any organization of any kind, or any
agency or employee representation committee or plan, in which
employees participate and which exists for the purpose, in
whole or in part, of dealing with employers concerning
grievances, labor disputes, wages, rates of pay, hours of
employment, or conditions of work.
(e)(1) Notwithstanding the provisions of section 13 of this
Act (except subsections (a)(1) and (f) thereof), every employer
providing any contract services (other than linen supply
services) under a contract with the United States or any
subcontract thereunder shall pay to each of his employees whose
rate of pay is not governed by the Service Contract Act of 1965
(41 U.S.C. 351-357) or to whom subsection (a)(1) of this
section is not applicable, wages at rates not less than the
rates provided for in subsection (b) of this section.
(2) Notwithstanding the provisions of section 13 of this Act
(except subsections (a)(1) and (f) thereof) and the provisions
of the Service Contract Act of 1965, every employer in an
establishment providing linen supply services to the United
States under a contract with the United States or any
subcontract thereunder shall pay to each of his employees in
such establishment wages at rates not less than those
prescribed in subsection (b), except that if more than 50 per
centum of the gross annual dollar volume of sales made or
business done by such establishment is derived from providing
such linen supply services under any such contracts or
subcontracts, such employer shall pay to each of his employees
in such establishment wages at rates not less than those
prescribed in subsection (a)(1) of this section.
(f) Any employee--
(1) who in any workweek is employed in domestic
service in a household shall be paid wages at a rate
not less than the wage rate in effect under section
6(b) unless such employee's compensation for such
service would not because of section 209(a)(6) of the
Social Security Act constitute wages for the purpose of
title II of such Act, or
(2) who in any workweek--
(A) is employed in domestic service in one or
more households, and
(B) is so employed for more than 8 hours in
the aggregate,
shall be paid wages for such employment in such
workweek at a rate not less than the wage rate in
effect under section 6(b).
(g)(1) In lieu of the rate prescribed by subsection (a)(1),
any employer may pay any employee of such employer, during the
first 90 consecutive calendar days after such employee is
initially employed by such employer, a wage which is not less
than $4.25 an hour.
(2) In lieu of the rate prescribed by subsection (a)(1), the
Governor of Puerto Rico, subject to the approval of the
Financial Oversight and Management Board established pursuant
to section 101 of the Puerto Rico Oversight, Management, and
Economic Stability Act, may designate a time period not to
exceed four years during which employers in Puerto Rico may pay
employees who are initially employed after the date of
enactment of such Act a wage which is not less than the wage
described in paragraph (1). Notwithstanding the time period
designated, such wage shall not continue in effect after such
Board terminates in accordance with section 209 of such Act.
(3) No employer may take any action to displace employees
(including partial displacements such as reduction in hours,
wages, or employment benefits) for purposes of hiring
individuals at the wage authorized in paragraph (1) or (2).
(4) Any employer who violates this subsection shall be
considered to have violated section 15(a)(3) (29 U.S.C.
215(a)(3)).
(5) This subsection shall only apply to an employee who has
not attained the age of 20 years, except in the case of the
wage applicable in Puerto Rico, 25 years, until such time as
the Board described in paragraph (2) terminates in accordance
with section 209 of the Act described in such paragraph.
* * * * * * *
SEC. 8. REQUIREMENTS AND PROHIBITIONS RELATING TO WAGE, SALARY, AND
BENEFIT HISTORY.
(a) In General.--It shall be an unlawful practice for an
employer to--
(1) rely on the wage history of a prospective
employee in considering the prospective employee for
employment, including requiring that a prospective
employee's prior wages satisfy minimum or maximum
criteria as a condition of being considered for
employment;
(2) rely on the wage history of a prospective
employee in determining the wages for such prospective
employee, except that an employer may rely on wage
history if it is voluntarily provided by a prospective
employee, after the employer makes an offer of
employment with an offer of compensation to the
prospective employee, to support a wage higher than the
wage offered by the employer;
(3) seek from a prospective employee or any current
or former employer the wage history of the prospective
employee, except that an employer may seek to confirm
prior wage information only after an offer of
employment with compensation has been made to the
prospective employee and the prospective employee
responds to the offer by providing prior wage
information to support a wage higher than that offered
by the employer; or
(4) discharge or in any other manner retaliate
against any employee or prospective employee because
the employee or prospective employee--
(A) opposed any act or practice made unlawful
by this section; or
(B) took an action for which discrimination
is forbidden under section 15(a)(3).
(b) Definition.--In this section, the term ``wage history''
means the wages paid to the prospective employee by the
prospective employee's current employer or previous employer.
* * * * * * *
prohibited acts
Sec. 15. (a) After the expiration of one hundred and twenty
days from the date of enactment of this Act, it shall be
unlawful for any person--
(1) to transport, offer for transportation, ship,
deliver, or sell in commerce, or to ship, deliver, or
sell with knowledge that shipment or delivery or sale
thereof in commerce is intended, any goods in the
production of which any employee was employed in
violation of section 6 or section 7, or in violation of
any regulation or order of the Secretary of Labor
issued under section 14; except that no provision of
this Act shall impose any liability upon any common
carrier for the transportation in commerce in the
regular course of its business of any goods not
produced by such common carrier, and no provision of
this Act shall excuse any common carrier from its
obligation to accept any goods for transportation; and
except that any such transportation, offer, shipment,
delivery, or sale of such goods by a purchaser who
acquired them in good faith in reliance on written
assurance from the producer that the goods were
produced in compliance with the requirements of the
Act, and who acquired such goods for value without
notice of any such violation, shall not be deemed
unlawful;
(2) to violate any of the provisions of section 6 or
section 7, or any of the provisions of any regulation
or order of the Secretary issued under section 14;
(3) to discharge or in any other manner discriminate
against any employee because such [employee has filed
any complaint or instituted or caused to be instituted
any proceeding under or related to this Act, or has
testified or is about to testify in any such
proceeding, or has served or is about to serve on an
industry committee;] employee--
(A) has made a charge or filed any complaint
or instituted or caused to be instituted any
investigation, proceeding, hearing, or action
under or related to this Act, including an
investigation conducted by the employer, or has
testified or is planning to testify or has
assisted or participated in any manner in any
such investigation, proceeding, hearing or
action, or has served or is planning to serve
on an industry committee;
(B) has opposed any practice made unlawful by
this Act; or
(C) has inquired about, discussed, or
disclosed the wages of the employee or another
employee (such as by inquiring or discussing
with the employer why the wages of the employee
are set at a certain rate or salary);
(4) to violate any of the provisions of section 12;
(5) to violate any of the provisions of section 11(c)
or any regulation or order made or continued in effect
under the provisions of section 11(d), or to make any
statement, report, or record filed or kept pursuant to
the provisions of such section or of any regulation or
order thereunder, knowing such statement, report, or
record to be false in a material respect[.]; or
(6) to require an employee to sign a contract or
waiver that would prohibit the employee from disclosing
information about the employee's wages.
(b) For the purposes of subsection (a)(1) proof that any
employee was employed in any place of employment where goods
shipped or sold in commerce were produced, within ninety days
prior to the removal of the goods from such place of
employment, shall be prima facie evidence that such employee
was engaged in the production of such goods.
(c) Subsection (a)(3)(C) shall not apply to instances in
which an employee who has access to the wage information of
other employees as a part of such employee's essential job
functions discloses the wages of such other employees to
individuals who do not otherwise have access to such
information, unless such disclosure is in response to a
complaint or charge or in furtherance of an investigation,
proceeding, hearing, or action under section 6(d), including an
investigation conducted by the employer. Nothing in this
subsection shall be construed to limit the rights of an
employee provided under any other provision of law.
penalties
Sec. 16. (a) Any person who willfully violates any of the
provisions of section 15 shall upon conviction thereof be
subject to a fine of not more than $10,000, or to imprisonment
for not more than six months, or both. No person shall be
imprisoned under this subsection except for an offense
committed after the conviction of such person for a prior
offense under this subsection.
(b) Any employer who violates the provisions of section 6 or
section 7 of this Act shall be liable to the employee or
employees affected in the amount of their unpaid minimum wages,
or the unpaid overtime compensation, as the case may be, and in
an additional equal amount as liquidated damages. Any employer
who violates section 6(d), or who violates the provisions of
section 15(a)(3) in relation to a violation of section 6(d),
shall additionally be liable for such compensatory damages, or,
where the employee demonstrates that the employer acted with
malice or reckless indifference, punitive damages as may be
appropriate, except that the United States shall not be liable
for punitive damages. Any employer who violates the provisions
of section 15(a)(3) of this Act shall be liable for such legal
or equitable relief as may be appropriate to effectuate the
purposes of section 15(a)(3), including without limitation
employment, reinstatement, promotion, and the payment of wages
lost and an additional equal amount as liquidated damages. Any
employer who violates section 3(m)(2)(B) shall be liable to the
employee or employees affected in the amount of the sum of any
tip credit taken by the employer and all such tips unlawfully
kept by the employer, and in an additional equal amount as
liquidated damages. An action to recover the liability
prescribed in [the preceding sentences] any of the preceding
sentences of this subsection may be maintained against any
employer (including a public agency) in any Federal or State
court of competent jurisdiction by any one or more employees
for and in behalf of himself or themselves and other employees
similarly situated. [No employees] Except with respect to class
actions brought to enforce section 6(d), no employee shall be a
party plaintiff to any such action unless he gives his consent
in writing to become such a party and such consent is filed in
the court in which such action is brought. Notwithstanding any
other provision of Federal law, any action brought to enforce
section 6(d) may be maintained as a class action as provided by
the Federal Rules of Civil Procedure. The court [in such
action] in any action brought to recover the liability
prescribed in any of the preceding sentences of this subsection
shall, in addition to any judgment awarded to the plaintiff or
plaintiffs, allow a reasonable attorney's fee to be paid by the
defendant, and costs of the action, including expert fees. The
right provided by this subsection to bring an action by or on
behalf of any employee, and the right of any employee to become
a party plaintiff to any such action, shall terminate upon the
filing of a complaint by the Secretary of Labor in an action
under section 17 in which (1) restraint is sought of any
further delay in the payment of unpaid minimum wages, or the
amount of unpaid overtime compensation, as the case may be,
owing to such employee under section 6 or section 7 of this act
by an employer liable therefor under the provisions of this
subsection or (2) legal or equitable relief is sought as a
result of alleged violations of section 15(a)(3).
(c) The Secretary is authorized to supervise the payment of
the unpaid minimum wages or the unpaid overtime compensation
owing to any employee or employees under section 6 or 7 of this
Act, or, in the case of a violation of section 6(d), additional
compensatory or punitive damages, as described in subsection
(b), and the agreement of any employee to accept such payment
shall upon payment in full constitute a waiver by such employee
of any right he may have under subsection (b) of this section
to such unpaid minimum wages or unpaid overtime compensation
and an additional equal amount as liquidated damages , or such
compensatory or punitive damages, as appropriate. The Secretary
may bring an action in any court of competent jurisdiction to
recover the amount of the unpaid minimum wages or overtime
compensation and an equal amount as liquidated damages and, in
the case of a violation of section 6(d), additional
compensatory or punitive damages, as described in subsection
(b). The right provided by subsection (b) to bring an action by
or on behalf of any employee to recover the liability specified
in [the first sentence] the first or second sentence of such
subsection and of any employee to become a party plaintiff to
any such action shall terminate upon the filing of a complaint
by the Secretary in an action under this subsection in which a
recovery is sought of unpaid minimum wages or unpaid overtime
compensation under sections 6 and 7 or liquidated or other
damages provided by this subsection owing to such employee by
an employer liable under the provisions of subsection (b),
unless such action is dismissed without prejudice on motion of
the Secretary. Any sums thus recovered by the Secretary on
behalf of an employee pursuant to this subsection shall be held
in a special deposit account and shall be paid, on order of the
Secretary, directly to the employee or employees affected. Any
such sums not paid to an employee because of inability to do so
within a period of three years shall be covered into the
Treasury of the United States as miscellaneous receipts in
determining when an action is commenced by the Secretary under
this subsection for the purposes of the statutes of limitations
provided in section 6(a) of the Portal-to-Portal Act of 1947,
it shall be considered to be [commenced in the case]
commenced--
(1) in the case of any individual claimant on the
date when the complaint is filed if he is specifically
named as a party plaintiff in the complaint, or if his
name did not so appear, on the subsequent date on which
his name is added as a party plantiff in such
action[.]; or
(2) in the case of a class action brought to enforce
section 6(d), on the date on which the individual
becomes a party plaintiff to the class action. The
authority and requirements described in this subsection
shall apply with respect to a violation of section
3(m)(2)(B), as appropriate, and the employer shall be
liable for the amount of the sum of any tip credit
taken by the employer and all such tips unlawfully kept
by the employer, and an additional equal amount as
liquidated damages.
(d) In any action or proceeding commenced prior to, on, or
after the date of enactment of this subsection, no employer
shall be subject to any liability or punishment under this Act
or the Portal-to-Portal Act of 1947 on account of his failure
to comply with any provision or provisions of such Acts (1)
with respect to work heretofore or hereafter performed in a
workplace to which the exemption in section 13(f) is
applicable, (2) with respect to work performed in Guam, the
Canal Zone, or Wake Island before the effective date of this
amendment of subsection (d), or (3) with respect to work
performed in a possession named in section 6(a)(3) at any time
prior to the establishment by the Secretary, as provided
therein, of a minimum wage rate applicable to such work.
(e)(1)(A) Any person who violates the provisions of sections
12 or 13(c), relating to child labor, or any regulation issued
pursuant to such sections, shall be subject to a civil penalty
not to exceed--
(i) $11,000 for each employee who was
the subject of such a violation; or
(ii) $50,000 with regard to each such
violation that causes the death or
serious injury of any employee under
the age of 18 years, which penalty may
be doubled where the violation is a
repeated or willful violation.
(B) For purposes of subparagraph (A), the term ``serious
injury'' means--
(i) permanent loss or substantial impairment of one
of the senses (sight, hearing, taste, smell, tactile
sensation);
(ii) permanent loss or substantial impairment of the
function of a bodily member, organ, or mental faculty,
including the loss of all or part of an arm, leg, foot,
hand or other body part; or
(iii) permanent paralysis or substantial impairment
that causes loss of movement or mobility of an arm,
leg, foot, hand or other body part.
(2) Any person who repeatedly or willfully violates section 6
or 7, relating to wages, shall be subject to a civil penalty
not to exceed $1,100 for each such violation. Any person who
violates section 3(m)(2)(B) shall be subject to a civil penalty
not to exceed $1,100 for each such violation, as the Secretary
determines appropriate, in addition to being liable to the
employee or employees affected for all tips unlawfully kept,
and an additional equal amount as liquidated damages, as
described in subsection (b).
(3) In determining the amount of any penalty under this
subsection, the appropriateness of such penalty to the size of
the business of the person charged and the gravity of the
violation shall be considered. The amount of any penalty under
this subsection, when finally determined, may be--
(A) deducted from any sums owing by the United States
to the person charged;
(B) recovered in a civil action brought by the
Secretary in any court of competent jurisdiction, in
which litigation the Secretary shall be represented by
the Solicitor of Labor; or
(C) ordered by the court, in an action brought for a
violation of section 15(a)(4) or a repeated or willful
violation of section 15(a)(2), to be paid to the
Secretary.
(4) Any administrative determination by the Secretary of the
amount of any penalty under this subsection shall be final,
unless within 15 days after receipt of notice thereof by
certified mail the person charged with the violation takes
exception to the determination that the violations for which
the penalty is imposed occurred, in which event final
determination of the penalty shall be made in an administrative
proceeding after opportunity for hearing in accordance with
section 554 of title 5, United States Code, and regulations to
be promulgated by the Secretary.
(5) Except for civil penalties collected for violations of
section 12, sums collected as penalties pursuant to this
section shall be applied toward reimbursement of the costs of
determining the violations and assessing and collecting such
penalties, in accordance with the provision of section 2 of the
Act entitled ``An Act to authorize the Department of Labor to
make special statistical studies upon payment of the cost
thereof and for other purposes'' (29 U.S.C. 9a). Civil
penalties collected for violations of section 12 shall be
deposited in the general fund of the Treasury.
(f)(1) Any person who violates the provisions of section 8
shall--
(A) be subject to a civil penalty of $5,000 for a
first offense, increased by an additional $1,000 for
each subsequent offense, not to exceed $10,000; and
(B) be liable to each employee or prospective
employee who was the subject of the violation for
special damages not to exceed $10,000 plus attorneys'
fees, and shall be subject to such injunctive relief as
may be appropriate.
(2) An action to recover the liability described in paragraph
(1)(B) may be maintained against any employer (including a
public agency) in any Federal or State court of competent
jurisdiction by any one or more employees or prospective
employees for and on behalf of--
(A) the employees or prospective employees; and
(B) other employees or prospective employees
similarly situated.
* * * * * * *
* * * * * * *
----------
CIVIL RIGHTS ACT OF 1964
* * * * * * *
TITLE VII--EQUAL EMPLOYMENT OPPORTUNITY
* * * * * * *
investigations, inspections, records, state agencies
Sec. 709. (a) In connection with any investigation of a
charge filed under section 706, the Commission or its
designated representative shall at all reasonable times have
access to, for the purposes of examination, and the right to
copy any evidence of any person being investigated or proceeded
against that relates to unlawful employment practices covered
by this title and is relevant to the charge under
investigation.
(b) The Commission may cooperate with State and local
agencies charged with the administration of State fair
employment practices laws and, with the consent of such
agencies, may, for the purpose of carrying out its functions
and duties under this title and within the limitation of funds
appropriated specifically for such purpose, engage in and
contribute to the cost of research and other projects of mutual
interest undertaken by such agencies, and utilize the services
of such agencies and their employees, and, notwithstanding any
other provision of law, pay by advance or reimbursement such
agencies and their employees for services rendered to assist
the Commission in carrying out this title. In furtherance of
such cooperative efforts, the Commission may enter into written
agreements with such State or local agencies and such
agreements may include provisions under which the Commission
shall refrain from processing a charge in any cases or class of
cases specified in such agreements or under which the
Commission shall relieve any person or class of persons in such
State or locality from requirements imposed under this section.
The Commission shall rescind any such agreement whenever it
determines that the agreement no longer serves the interest of
effective enforcement of this title.
(c) Every employer, employment agency, and labor organization
subject to this title shall (1) make and keep such records
relevant to the determinations of whether unlawful employment
practices have been or are being committed, (2) preserve such
records for such periods, and (3) make such reports therefrom
as the Commission shall prescribe by regulation or order, after
public hearing, as reasonable, necessary, or appropriate for
the enforcement of this title or the regulations or orders
thereunder. The Commission shall, by regulation, require each
employer, labor organization, and joint labor-management
committee subject to this title which controls an
apprenticeship or other training program to maintain such
records as are reasonably necessary to carry out the purposes
of this title, including, but not limited to, a list of
applicants who wish to participate in such program, including
the chronological order in which applications were received,
and to furnish to the Commission upon request, a detailed
description of the manner in which persons are selected to
participate in the apprenticeship or other training program.
Any employer, employment agency, labor organization, or joint
labor-management committee which believes that the application
to it of any regulation or order issued under this section
would result in undue hardship may apply to the Commission for
an exemption from the application of such regulation or order,
and, if such application for an exemption is denied, bring a
civil action in the United States district court for the
district where such records are kept. If the Commission or the
court, as the case may be, finds that the application of the
regulation or order to the employer, employment agency, or
labor organization in question would impose an undue hardship,
the Commission or the court, as the case may be, may grant
appropriate relief. If any person required to comply with the
provisions of this subsection fails or refuses to do so, the
United States district court for the district in which such
person is found, resides, or transacts business, shall, upon
application of the Commission, or the Attorney General in a
case involving a government, governmental agency or political
subdivision, have jurisdiction to issue to such person an order
requiring him to comply.
(d) In prescribing requirements pursuant to subsection (c) of
this section, the Commission shall consult with other
interested State and Federal agencies and shall endeavor to
coordinate its requirements with those adopted by such
agencies. The Commission shall furnish upon request and without
cost to any State or local agency charged with the
administration of a fair employment practice law information
obtained pursuant to subsection (c) of this section from any
employer, employment agency, labor organization, or joint
labor-management committee subject to the jurisdiction of such
agency. Such information shall be furnished on condition that
it not be made public by the recipient agency prior to the
institution of a proceeding under State or local law involving
such information. If this condition is violated by a recipient
agency, the Commission may decline to honor subsequent requests
pursuant to this subsection.
(e) It shall be unlawful for any officer or employee of the
Commission to make public in any manner whatever any
information obtained by the Commission pursuant to its
authority under this section prior to the institution of any
proceeding under this title involving such information. Any
officer or employee of the Commission who shall make public in
any manner whatever any information in violation of this
subsection shall be guilty of a misdemeanor and upon conviction
thereof, shall be fined not more than $1,000, or imprisoned not
more than one year.
(f)(1) Not later than 18 months after the date of enactment
of this subsection, the Commission shall provide for the
collection from employers of compensation data and other
employment-related data (including hiring, termination, and
promotion data) disaggregated by the sex, race, and national
origin of employees.
(2) In carrying out paragraph (1), the Commission shall have
as its primary consideration the most effective and efficient
means for enhancing the enforcement of Federal laws prohibiting
pay discrimination. For this purpose, the Commission shall
consider factors including the imposition of burdens on
employers, the frequency of required reports (including the
size of employers required to prepare reports), appropriate
protections for maintaining data confidentiality, and the most
effective format to report such data.
(3)(A) For each 12-month reporting period for an employer,
the compensation data collected under paragraph (1) shall
include, for each range of taxable compensation described in
subparagraph (B), disaggregated by the categories described in
subparagraph (E)--
(i) the number of employees of the employer who earn
taxable compensation in an amount that falls within
such taxable compensation range; and
(ii) the total number of hours worked by such
employees.
(B) Subject to adjustment under subparagraph (C), the taxable
compensation ranges described in this subparagraph are as
follows:
(i) Not more than $19,239.
(ii) Not less than $19,240 and not more than $24,439.
(iii) Not less than $24,440 and not more than
$30,679.
(iv) Not less than $30,680 and not more than $38,999.
(v) Not less than $39,000 and not more than $49,919.
(vi) Not less than $49,920 and not more than $62,919.
(vii) Not less than $62,920 and not more than
$80,079.
(viii) Not less than $80,080 and not more than
$101,919.
(ix) Not less than $101,920 and not more than
$128,959.
(x) Not less than $128,960 and not more than
$163,799.
(xi) Not less than $163,800 and not more than
$207,999.
(xii) Not less than $208,000.
(C) The Commission may adjust the taxable compensation ranges
under subparagraph (B)--
(i) if the Commission determines that such adjustment
is necessary to enhance enforcement of Federal laws
prohibiting pay discrimination; or
(ii) for inflation, in consultation with the Bureau
of Labor Statistics.
(D) In collecting data described in subparagraph (A)(ii), the
Commission shall provide that, with respect to an employee who
the employer is not required to compensate for overtime
employment under section 7 of the Fair Labor Standards Act of
1938 (29 U.S.C. 207), an employer may report--
(i) in the case of a full-time employee, that such
employee works 40 hours per week, and in the case of a
part-time employee, that such employee works 20 hours
per week; or
(ii) the actual number of hours worked by such
employee.
(E) The categories described in this subparagraph shall be
determined by the Commission and shall include--
(i) race;
(ii) national origin;
(iii) sex; and
(iv) job categories, including the job categories
described in the instructions for the Equal Employment
Opportunity Employer Information Report EEO-1, as in
effect on the date of the enactment of this subsection.
(F) The Commission shall use the compensation data collected
under paragraph (1)--
(i) to enhance--
(I) the investigation of charges filed under
section 706 or section 6(d) of the Fair Labor
Standards Act of 1938 (29 U.S.C. 206(d)); and
(II) the allocation of resources to
investigate such charges; and
(ii) for any other purpose that the Commission
determines appropriate.
(G) The Commission shall annually make publicly available
aggregate compensation data collected under paragraph (1) for
the categories described in subparagraph (E), disaggregated by
industry, occupation, and core based statistical area (as
defined by the Office of Management and Budget).
(4) The compensation data under paragraph (1) shall be
collected from each employer that--
(A) is a private employer that has 100 or more
employees, including such an employer that is a
contractor with the Federal Government, or a
subcontractor at any tier thereof; or
(B) the Commission determines appropriate.
* * * * * * *
MINORITY VIEWS
INTRODUCTION
Committee Republicans are united in their belief that equal
work should be rewarded with equal pay, irrespective of a
worker's sex. Indeed, that very principle has been the law of
the land for decades. It is already--as it should be--against
federal law to discriminate, in pay or other employment
practices, on the basis of sex. Committee Republicans are
committed to eliminating unfair and illegal wage disparities
that are a product of workplace discrimination and ensuring a
fair, productive, and competitive workforce.
In 1963, Congress enacted the Equal Pay Act (EPA) within
the Fair Labor Standards Act (FLSA). The EPA makes it illegal
to pay different wages to workers of the opposite sex for equal
work. One year later, Congress enacted comprehensive anti-
discrimination protections based on race, color, national
origin, religion, and sex in Title VII of the Civil Rights Act
(Title VII). Together, these laws protect against sex
discrimination and provide a range of remedies for victims.
Committee Republicans agree that such discrimination should not
be tolerated, which is why not one, but two federal laws
already prohibit such actions.
It is against this backdrop that Committee Republicans
reject H.R. 7, the so-called Paycheck Fairness Act (PFA). H.R.
7 does little to protect the wages and paychecks of American
workers and does far more to line the pockets of the
plaintiffs' trial-lawyer bar. The bill radically limits, and
likely eliminates, the ability of business owners to defend
claims of discrimination based on pay differences that arise
from lawful and legitimate business purposes, while drastically
expanding liability and damages under the EPA. Further, the
bill requires a burdensome, intrusive, and unnecessary
government collection of questionable utility of worker pay
data. The data is disaggregated by race, sex, and national
origin (including hiring, termination, and promotion data) and
raises significant confidentiality and privacy concerns. For
these reasons, and as set forth more fully below, Committee
Republicans are united in their opposition to H.R. 7.
CONCERNS WITH H.R. 7
Committee Republicans identify the following as some of the
bill's most objectionable provisions:
H.R. 7 Radically Limits Legitimate and Lawful Defenses
H.R. 7 radically scales back and likely eliminates a
business owner's ability to defend itself from claims of pay
discrimination where disparities arise from wholly lawful
business decisions.\1\ For example, H.R. 7 strictly limits a
business owner's ability to defend pay differentials that are
accounted for by reasons wholly unrelated to a worker's sex.
Under current law, a business owner can defend him or herself
from a claim of pay discrimination by propounding evidence and
proving the pay differential is based on factors other than
sex. H.R. 7 dramatically and unfairly curtails the scope of
that defense and requires that a business owner convince a
judge or jury, potentially years later, that the pay
differential was required by ``business necessity,''
essentially putting courts in charge of determining what a
business owner must do to avoid bankruptcy. Ms. Camille A.
Olson, a partner at Seyfarth Shaw LLP, explained at the lone
hearing on H.R. 7 (a catch-all hearing that also covered three
other, disparate bills) why requiring proof of ``business
necessity'' is unworkable:
---------------------------------------------------------------------------
\1\A provision in H.R. 7 as reported by the Committee was not
included in the bill as introduced in the House. H.R. 7 as reported
adds a definition of ``sex'' to the FLSA, a statute that currently does
not define ``sex.'' The bill as reported defines ``sex'' as including a
``sex stereotype,'' ``sexual orientation or gender identity,'' and
``sex characteristics, including intersex traits,'' while defining
``sexual orientation'' as including ``homosexuality, heterosexuality,
and bisexuality,'' and defining ``gender identity'' as ``gender-related
identity, appearance, mannerisms, or other gender-related
characteristics of an individual, regardless of the individual's
designated sex at birth.'' Such a substantial change to the FLSA, the
nation's foremost wage-and-hour law, should have been subject to
examination at a Committee hearing. However, because the Democrats'
Amendment in the Nature of a Substitute to H.R. 7 made this change at
the markup, no such examination occurred or was possible.
Business necessity suggests that the very viability
of the business is dependent upon the compensation
decision. Requiring an employer to prove that a wage
differential between two individuals is a business
necessity is unworkable. It would require an employer
to meet an impossible threshold--to prove that it is a
business necessity for the employer to pay one person
more than another based on innumerable intangible
criteria such as relative levels of education,
experience, or job performance.\2\
---------------------------------------------------------------------------
\2\Fighting for Fairness: Examining Legislation to Confront
Workplace Discrimination: Hearing Before the Subcomm. on Civ. Rights &
Human Serv. & Subcomm. on Workforce Protections of the H. Comm. on
Educ. & Lab., 117th Cong. (2021) (statement of Camille Olson, Partner,
Seyfarth Shaw LLP, at 9).
Further, H.R. 7 requires the business owner to justify the
entire pay difference between a male worker and female worker.
This is yet another unworkable standard. Business owners make
compensation decisions based on many factors that are not
easily quantifiable. Requiring business owners to justify every
cent of a pay differential is a mandate that could only be
satisfied by establishing rigid pay grades, as governments use
for civil servants. Ms. Olson commented on how this provision
---------------------------------------------------------------------------
in H.R. 7 is also unworkable:
Compensation decisions in the private sector are made
based on a variety of factors that are not capable of
an exact dollar-for-dollar comparison. Differences in
experience, education and performance, among other job-
related factors, matter significantly for purposes of
setting compensation. How would an employer ever be
able to explain that it credited an employee with X
dollars for their 6.3 years of prior experience, and Y
dollars because the candidate went to a top tier school
versus Z dollars for a mid-tier school? It will be
virtually impossible for employers to meet such a
standard.\3\
---------------------------------------------------------------------------
\3\Id. at 14.
Even more egregious is that if a business owner somehow
persuades the judge or jury that 100 percent of the
differential was not based on sex, an employee is still
entitled to argue that there are other ways to address this
business need without a pay differential. In short, H.R. 7
takes core management decisions out of the hands of business
owners and places them squarely in the realm of judges, juries,
and trial lawyers. This brazen attack on market economies and
on private-sector discretion must be rejected.
Moreover, H.R. 7 significantly limits the ability of
business owners to justify differences in pay based on
different work locations (a standard which has existed
throughout the 56-year history of the EPA). Rather, under the
bill as reported, an employee can compare his or her pay to any
other coworker in the same county or political subdivision (or
perhaps more broadly, given the bill's provision allowing for
the Equal Employment Opportunity Commission (EEOC) to define
``work establishment'' even more broadly) to prove pay
discrimination. Ms. Olson pointed out in her testimony that a
county can include urban and suburban areas with different
commuting costs that could justify a pay differential.\4\ The
practical elimination of a legitimate defense available to
business owners under current law simply fails to recognize
economic reality and our market-based economy.
---------------------------------------------------------------------------
\4\Id. at 30.
---------------------------------------------------------------------------
H.R. 7 Drastically Expands Remedies
H.R. 7 drastically expands remedies under the EPA to
provide for unlimited compensatory damages, even where there is
absolutely no showing that any pay disparity was the effect of
intentional discrimination, as well as uncapped punitive
damages. In doing so, H.R. 7 places claims of discrimination in
wages based on sex in a more favorable position than similar
claims of pay discrimination under Title VII or the Americans
with Disabilities Act, which provide for limited compensatory
and punitive damages in cases of intentional discrimination.
Indeed, taken in concert with the remedies available under
Title VII, remedies for claims of pay discrimination under H.R.
7 would be greater than those available under any of our
nation's current civil rights laws. Ms. Olson discussed in her
testimony why these expanded remedies are inappropriate:
The required showing for proof of an EPA violation is
lower than under Title VII, but the available damages
are higher. What is more, H.R. 7 would also allow for
uncapped punitive damages in addition to the EPA's
existing double recovery of economic damages. The
current damage mechanisms under the EPA serve their
intended purpose of eliminating wage disparities,
making employees whole, compensating employees with an
equal amount of special liquidated damages, and paying
all attorneys' fees and costs. These remedies are
appropriately proportional as a remedy for an
employer's actions that produce unintentional, unlawful
wage disparities. To upend this design through a
contortionist's attempt to carry over parts of Title
VII's remedial scheme in a selected manner, and expand
damages under lower proof requirements is not
appropriate.\5\
---------------------------------------------------------------------------
\5\Id. at 25.
This drastic expansion of remedies, particularly where they
may be assessed without showing any discriminatory intent, tips
the scales to favor outsized judgments unrelated to actual
damages, and calls the entire rationale for the bill into
question.
H.R. 7 Encourages Frivolous Class Action Lawsuits
This bill's true intent to generate more lawsuits and line
the pockets of trial lawyers is nowhere more evident than in
its provisions to expand class action lawsuits. Currently under
the FLSA, plaintiffs may sue on behalf of themselves and those
similarly situated, thereby pursuing a collective action. To
ensure that these suits are merit-based--and brought by those
who wish to pursue them--workers must opt in to these
collective suits. H.R. 7 reverses that presumption and
eliminates those safeguards, instead deeming all potential
class members to be joined to a suit, placing the affirmative
burden on these individuals--who may not even know of the
suit's existence--to opt out of a claim.
Supporters of H.R. 7 have not adequately explained why a
change is needed for collective actions under the EPA. Ms.
Olson reached the conclusion that ``the current mechanism
sufficiently balances the interests of employers and aggrieved
employees, and the proponents of the bill have not sufficiently
demonstrated a need for such a procedural overhaul.''\6\ The
class action provisions in the bill are plainly designed to
ensure that plaintiffs' lawyers get handsome financial payoffs
to pursue class-action lawsuits, trumping any legitimate
interest in protecting the paychecks of American workers, and
these special-interest provisions should be rejected.
---------------------------------------------------------------------------
\6\Id. at 18.
---------------------------------------------------------------------------
H.R. 7 Obstructs Recruitment and Hiring
H.R. 7 includes highly prescriptive, unworkable
prohibitions relating to recruitment and hiring. The bill
prohibits a business owner from relying on the current or
previous wage of a prospective employee in considering the
individual for employment or determining the wages of the
individual unless the individual voluntarily provides the wage
information after a job offer has been made with a salary
offer, and then only if the information will increase the
salary offer. Ms. Olson explained the overly complex,
impractical nature of this scheme:
Prohibiting employers from relying on prior salary
information, even if it's voluntarily provided, until
after an offer that includes compensation information
has been extended will invoke an unnatural cadence that
does not reflect the realities of the workforce.
Indeed, human resources representatives will be forced
to issue ``Miranda-type'' warnings to applicants
advising them that they cannot provide information
regarding prior salary. And that even if they do, the
employer must make a salary offer unrelated to their
prior salary.\7\
---------------------------------------------------------------------------
\7\Id. at 21.
This provision is representative of how extreme and
unrealistic H.R. 7 is in its approach to addressing
compensation issues in the workplace. If enacted, workers and
employers would be stuck trying to implement a stream of
provisions that are unworkable.
H.R. 7 Eliminates Business Owners' Ability to Protect the
Confidentiality of Wage and Salary Data
H.R. 7 undermines the ability of business owners to manage
their enterprises by adopting broad, new anti-retaliation
provisions relating to employee discussions of pay or
compensation, extending restrictions far beyond what is already
provided under federal law. Title VII, among other federal
civil rights laws, protects employees in asserting their rights
with respect to nondiscrimination in pay. The National Labor
Relations Act also protects employees who discuss their wages
as part of a concerted activity.
However, H.R. 7 effectively eliminates the ability of a
business owner to maintain any policy protecting the privacy
and confidentiality of its payroll and wage information, even
for supervisory and managerial employees, long considered to be
part of the legitimate management of a business. Ms. Olson
explained the problems with this open-ended provision:
H.R. 7 is written so broadly that employees would
have the right to inquire about, discuss, or disclose
wage information without limitation. . . . There is no
consideration of the reasonableness of the employee's
actions with respect to their inquiries, discussions,
or disclosures, nor is the permissibility of such
action tethered to the alleged underlying pay
disparity. Further, the proposed bill does not take
into account or protect the privacy rights of other
employees with respect to publicly disseminating
information about their pay, nor does it contain a
mechanism for balancing and protecting employers'
legitimate business concerns in maintaining
confidentiality of certain compensation information.
Under H.R. 7, an employee who chooses to post on social
media the wages of all other employees, by name, would
be deemed to be engaging in protected activity, against
which other employees and the employer would have no
recourse.\8\
---------------------------------------------------------------------------
\8\Id. at 23.
These provisions in the bill contain no limiting principle
and will very likely harm workers and business owners. They
should be eliminated.
H.R. 7 Mandates Intrusive and Unnecessary Government Collection of
Worker Pay Data
H.R. 7 directs EEOC to collect compensation data from
business owners disaggregated by the sex, race, and national
origin of workers, including, for the first time ever, hiring,
termination, and promotion data. This sweeping collection would
go even further than the Obama administration's discredited
proposal in 2016 to collect pay data,\9\ which did not include
hiring, termination, and promotion data. Pursuant to the Obama
administration proposal, EEOC collected pay data for 2017 and
2018, but the agency has since discontinued the pay data
collection.\10\
---------------------------------------------------------------------------
\9\Press Release, EEOC to Collect Summary Pay Data (Sept. 29,
2016).
\10\Notice of Information Collection--Request for new Control
Number for a Currently Approved Collection: Employer Information Report
(EEO-1) Component 1; Revision of Existing Approval for EEO-1 Component
2, 84 Fed. Reg. 48,138, 48,141 (Sept. 12, 2019).
---------------------------------------------------------------------------
As with the Obama administration scheme, this mandate
raises serious privacy and confidentiality concerns. Time and
again there have been massive and harmful data breaches of
federal agencies. These reams of data would create yet another
valuable target, and H.R. 7 fails to address how the data will
be protected. Aggregated data published at the regional and
industrial level could reveal salaries of individual workers,
which is proprietary data. EEOC would also share the data with
the U.S. Department of Labor (DOL), which could release
sensitive data pursuant to a Freedom of Information Act
request.
It is highly unlikely that the data in question will be
useful to EEOC or the public. To the extent pay discrimination
exists, it is doubtful that amassing pay data in this manner
will effectively combat such discrimination. The raw data
collected will not account for the many factors that may
explain pay differences, such as skill levels and regional
differences in compensation, and will result in information
that is misleading and confusing.
Finally, this mandate is uniquely burdensome. In 2019, EEOC
estimated that annual costs to employers of submitting
information reports with pay data to the agency was more than
$610 million in 2017 and 2018. EEOC also determined that the
``unproven utility to its enforcement program of the pay data .
. . is far outweighed by the burden imposed on employers that
must comply with the reporting obligation.''\11\
---------------------------------------------------------------------------
\11\Id.
---------------------------------------------------------------------------
In addition to the intrusive government collection of pay
data, there are substantive concerns with changes to the EPA
contained in H.R. 7--changes that make it impossible to defend
legitimate pay differences, improperly allow unlimited
compensatory and punitive damages, and inappropriately expand
class actions, as well as obstructing the recruiting and hiring
process. The concerns outlined here represent but a few of the
most egregious policy flaws in H.R. 7. Whether singly or taken
as a whole, the provisions of H.R. 7 must be rejected.
THE FLAWED ``WAGE GAP'' THEORY
Advocates of H.R. 7 claim that despite two federal laws
prohibiting pay discrimination, female workers are still paid
on average considerably less than male workers, and, as a
result, a pernicious ``wage gap'' exists. According to Bureau
of Labor Statistics (BLS) data, female weekly earnings were 82
percent of male weekly earnings in 2019, as compared to 62
percent in 1979.\12\ Supporters of H.R. 7 argue that this
flawed theory makes enactment of the bill necessary.
---------------------------------------------------------------------------
\12\U.S. Dep't of Lab, Bureau of Lab. Statistics, BLS Reports,
Highlights of women's earnings in 2019 (Dec. 2020).
---------------------------------------------------------------------------
However, many experts effectively argue the ``wage gap''
between men and women is not necessarily the product of
workplace discrimination. In fact, most of the gap disappears
when factors such as hours worked per week, rate of leaving the
labor force, and industry and occupation are considered.\13\
For example, among full-time workers, men are more likely than
women to choose to work more than 40 hours per week. In 2019,
25 percent of men who usually work full time worked 41 or more
hours per week, compared with 14 percent of women. For those
who worked exactly a 40-hour work week, women earned 87 percent
as much as men.\14\
---------------------------------------------------------------------------
\13\See, e.g., CONSAD Research Corp., An Analysis of Reasons for
the Disparity in Wages Between Men and Women 1-2 (prepared for the U.S.
Dep't of Labor) (Jan. 12, 2009), https://www.shrm.org/hr-today/public-
policy/hr-public-policy-issues/Documents/
Gender%20Wage%20Gap%20Final%20Report.pdf.
\14\U.S. Dep't of Labor, supra note 12.
---------------------------------------------------------------------------
Other factors, including work experience, job tenure, and
preferences for non-wage benefits, such as health insurance and
other fringe benefits, further reduce the ``gap.'' A 2020 study
by the compensation software company PayScale found that when
accounting for job title, years of experience, industry,
location, and other compensable factors, women earned 98
percent as much as men.\15\ A 2020 research paper funded by the
U.S. Census Bureau found that 41 percent of the gender wage gap
can be explained by standard demographic and economic
characteristics, including work history, industry, and
occupation.\16\ A 2009 study commissioned by DOL found a gender
wage gap between 4.8 and 7.1 percent when controlling for
economic variables between men and women.\17\
---------------------------------------------------------------------------
\15\PayScale, The State of the Gender Pay Gap 2020, https://
www.payscale.com/data/gender-pay-gap.
\16\Thomas B. Foster et al., An Evaluation of the Gender Wage Gap
Using Linked Survey and Administrative Data, Working Paper No. CES-20-
34 (U.S. Census Bureau Ctr. for Econ. Studies, Nov. 2020), https://
www2.census.gov/ces/wp/2020/CES-WP-20-34.pdf. This paper has not
undergone the review accorded Census Bureau publications and is not
endorsed by the agency.
\17\CONSAD Research Corp., supra note 13, at 1.
---------------------------------------------------------------------------
A 2018 Harvard University study found that the gap in pay
between female and male bus and train operators working for the
Massachusetts Bay Transportation Authority (MBTA) can be
explained by the workplace choices that women and men make,
rather than other factors such as discrimination.\18\ The study
found the earnings gap for MBTA bus and train operators is
explained by the fact that the male operators took 48 percent
fewer unpaid hours off and worked 83 percent more overtime
hours per year than the female operators. These differences are
not due to any different work options faced by female and male
operators. Rather, the study found that the female operators
had a greater demand for workplace flexibility and a lower
demand for overtime work hours than the male operators.
---------------------------------------------------------------------------
\18\Valentin Bolotnyy and Natalia Emanuel, Why Do Women Earn Less
Than Men? Evidence from Bus and Train Operators (Harvard Univ., Working
Paper, Jan. 2, 2019), https://scholar.harvard.edu/bolotnyy/
publications/why-do-women-earn-less-men-evidence-bus-and-train-
operators-job-market-paper.
---------------------------------------------------------------------------
The Harvard MBTA study is noteworthy because the workplace
characteristics of the female operators are entirely comparable
to those of the male operators. All operators are represented
by the same union, and all are covered by the same collective
bargaining agreement. The study found the earnings gap persists
even when seniority was the same, which means that differences
in choices women and men made when faced with the same options
in the MBTA workplace can fully explain the earnings gap.
Because of the strict seniority system, the study debunked
discrimination as a cause of the gender earnings gap at the
MBTA.
In sum, there is a lack of definitive evidence that a
``wage gap'' caused by gender-based discrimination in pay
exists. The flawed premise of the ``wage gap'' does not justify
the enactment of radical, sweeping reforms to the EPA and other
federal laws contained in H.R. 7.
REPUBLICAN AMENDMENT
Recognizing the fundamental failures of policy contained in
H.R. 7, Representative Elise Stefanik (R-NY) offered a
substitute amendment during the Committee markup to highlight
Republican priorities and solutions for working women and men.
Representative Stefanik's amendment strengthens the EPA
while eliminating the multiple provisions in H.R. 7 that make
it impossible for a business owner to defend a pay
differential. This amendment strengthens the EPA by replacing
the ``factor other than sex'' defense with the language ``a
bona fide business-related factor other than sex.'' This change
would make clear to the courts that the ``other than sex''
defense cannot be used as a loophole or excuse for relying on
sex as a factor when there is a pay differential. The Stefanik
amendment also strikes the remaining provision in H.R. 7
relating to defenses. These unnecessary provisions require
that, even when a business owner already shows the factor
causing the pay differential is ``other than sex,'' it must
meet several illogical and insurmountable burdens, effectively
paving an unimpeded path to the promise of unlimited punitive
and compensatory damages to line the pockets of trial lawyers.
To encourage proactive steps by employers, and taking its
cue from Massachusetts' pay equity law\19\ and Ms. Olson's
testimony, Representative Stefanik's amendment provides an
affirmative defense to an EPA claim if an employer self-audits
its pay practices to identify potentially unlawful pay
differentials and takes action to address pay differentials.
The audit must be conducted in good faith, reasonable in detail
and scope relative to the size of the employer, and conducted
within the prior three years. If a self-audit is not reasonable
in detail and scope but meets the other criteria, then the
employer will not be liable for liquidated damages. In
addition, the employer's audit and subsequent actions related
to the audit cannot be used in a claim against the employer,
and no negative inference can be made against an employer who
conducts a self-audit. Ms. Olson's testimony endorsed
provisions such as this to encourage more employers to conduct
self-evaluations to identify and rectify potentially unlawful
pay differentials.\20\
---------------------------------------------------------------------------
\19\Mass. Gen. Laws ch. 149, Sec. 105A(d).
\20\Olson statement, supra note 2, at 30-32.
---------------------------------------------------------------------------
To ensure recruitment and hiring practices are not unduly
interfered with, Representative Stefanik's amendment ensures
employers may act on wage information that has been voluntarily
provided by a prospective employee. The amendment also ensures
that the employer may have a salary expectation conversation
with a prospective employee. In contrast, H.R. 7 forbids
employers from relying on wage history voluntarily provided by
the prospective employee until after the employer makes a job
offer, including a salary offer, to the prospective employee.
This seemingly requires the employer to warn the prospective
employee, with a Miranda-style warning, not to volunteer any of
the prospective employee's wage history. Even then, the
employer can only rely on the voluntarily provided wage history
to increase the salary offer. This scheme in H.R. 7 is
unworkable and may harm prospective employees who have
unrealistic salary expectations. The business necessity
requirement in the PFA also makes discretionary salary offers,
such as to recruit a prospective employee from another firm,
likely to be unlawful.
To protect employees from violations of their privacy,
Representative Stefanik's amendment ensures employers may place
reasonable limitations on the time, place, and manner of
employees' discussions, disclosures, or inquiries about
employee wages, including that any disclosures must be
voluntary. In contrast, H.R. 7 does not allow the employer to
place reasonable limits on these disclosures. This could result
in disclosures that may violate the privacy of employees and
the confidentiality of proprietary information.\21\
---------------------------------------------------------------------------
\21\See id. at 21-24.
---------------------------------------------------------------------------
Crucially, Representative Stefanik's amendment does not
require EEOC to collect pay data from employers. This wise
omission reflects Committee Republicans' grave concerns with
the government collection of pay data mandated in H.R. 7. The
bill requires EEOC to collect worker compensation data from
business owners disaggregated by sex, race, and national origin
of employees, including, for the first time ever, hiring,
termination, and promotion data. This astounding government
collection of worker pay data raises significant privacy and
confidentiality concerns. Further, the utility of this data is
doubtful, and whether EEOC would be able to manage and
interpret this massive amount of pay data appropriately is
questionable. Finally, the data collection requirement would
impose an extremely costly and uniquely burdensome mandate on
business owners, requiring them to submit reams of proprietary
data to the government, the uses of which are not adequately
explained in the bill.
Representative Stefanik's amendment embodies a responsible,
workable approach to address compensation issues in the
workplace, which the Democrats unanimously rejected in favor of
H.R. 7's numerous top-down, impractical, and ludicrous
provisions.
CONCLUSION
H.R. 7 is a fundamentally flawed bill that does nothing to
ensure ``paycheck fairness.'' The bill's proponents have failed
to demonstrate that its provisions are needed or will prove
workable. H.R. 7 is instead a gift for trial lawyers, the main
beneficiaries of the bill. For these reasons, and all of those
set forth above, Committee Republicans oppose the enactment of
H.R. 7 as reported from the Committee on Education and Labor.
Virginia Foxx,
Ranking Member.
Joe Wilson.
Glenn ``GT'' Thompson.
Tim Walberg.
Glenn Grothman.
Elise M. Stefanik.
Rick W. Allen.
Jim Banks.
James Comer.
Fred Keller.
Gregory F. Murphy, M.D.
Mariannette Miller Meeks, M.D.
Burgess Owens.
Lisa C. McClain.
Diana Harshbarger.
Scott Fitzgerald.
Madison Cawthorn.
[all]