Fair Pay and Paycheck Fairness Acts Passed the House

Although both of these Acts sound like they cover the same purpose – make sure that everyone is paid fairly, they actually serve two distinct purposes.  Nonetheless, both coasted through the House of Representatives last week without even a debate.  The Paycheck Fairness Act passed mostly along party lines by a vote of 256-163 and the Fair Pay Act passed 247 -171.  The Senate will vote on this bill within the next several weeks, although a date certain has not yet been determined.

According to the US Chamber of Commerce, who opposed both bills, The Fair Pay Act conflicts with current laws that govern the statute of limitations regarding discriminatory actions by employers against employees.

According to House Republican Leader John Boehner:  Today’s effort by the Democratic Majority is not about workplace discrimination; it’s the first step in an effort to begin g the special-interest allies who helped give the Democratic Party control of Washington.  These bills do not reflect the priorities of the American people; they reflect the narrow interests of te powerful trial lawyer industry that last year used its ill-gotten war chest to help the current majority tighten its grip on power.

Following that thought, the Wall Street Journal editorial board agrees that the bills amount to an earmark for trial lawyers.  The editorial board weighed in on the Fair Pay Act statute of limitations issue by publishing:

[The Supreme Court’s] ruling put to rest Ms. Letbetter’screative theory that decisions made decades ago by a former boss affected her pay all the way to retirement, so that each paycheck was a new discriminatory act and thus fell within the statute of limitations.  Yet, that is exactly the theory Congress would now revive with the Ledbetter bill.  There would no longer be time limits on such discrimination claims.  They could be brought long after evidence had disappeared or witnesses had died – as was the case with Ms. Ledbetter’s former boss.  For the tort bar, this is pure golf.  it would create a new legal business in digging up ancient workplace grievances.

The Paycheck Fairness Act quietly scooted along until it was passed because it doesn’t create as much of an administrative nightmare as the Fair Pay Act.  Nonetheless, it bars employers from penalizing workers who share salary information (which is already prohibited by the National Labor Relations Act), and requires some employers to disclose to the EEOC their wage rates for general job classifications.  It also prohibits companies from lowering any employee’s salary in order to pay others fairly.  This is so ill-defined that there will be tremendous amounts of litigation in the next few years as the courts wrestle with what exactly that means.

More analysis and coverage of these Act will occur in the coming weeks as the Senate looks at these bills and once they begin being followed.  In the meantime, just remember that they are out there and once passed by the Senate and signed by Obama, companies will be forced to change the way they keep records, at a minimum.


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