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.


Paycheck Fairness Act

The Paycheck Fairness Act was introduced in March 2007 by Sen. Hilary Clinton and Rep. Rosa DeLauro to amend the Fair Labor Standards Act to offer stronger protection for employees against compensation discrimination on the basis of sex.  Rep. LeDauro, D-Conn. first introduced this legislation 12 years ago, but now is the time it will become law. 


Currently, employers can avoid liability if they prove that the alleged discrimination comparison was a result of any factor other than sex.  The Paycheck Fairness Act limits this defense to situations where the factors other than sex are job-related or serve a legitimate business interest. 


The act also prohibits employers from retaliating against employee who share salary information, but this is prohibited, anyway by the National Labor Relations Act.


The Paycheck Fairness Act also increases civil penalties against employers who violate it, makes it easier to bring class actions, and authorizes the Secretary of Labor to seek additional compensatory or punitive damages.  This authorization is similar to the Working Families Flexibility Act (aka “union of one law”) permitting the Labor Secretary to impose additional penalties for not negotiating with a single employee over the terms and conditions of that employee’s job.


Like the Ledbetter Fair Pay Act, the Paycheck Fairness Act was introduced to Congress last year.  The Act, again like the Fair Pay Act, passed in the House of Representatives but did not pass the Senate.  With Democrats padding their seats in Congress, both Acts should sail through Congress this time and reach Obama’s desk soon after he enters the White House, and of course, Obama has embraced both Acts.


According to the AP, House Speaker Nancy Pelosi said she was “very excited” about leading off the new Congress with labor rights issues.  And “the early foray into labor rights issues is a prelude to what could be the most controversial bill that Congress tackles in the first year of the Obama administration – legislation to take away the right of employers to demand secret-ballot elections by workers before unions could be recognized.”

Voting on the Ledbetter Fair Pay Act

Voting on the Ledbetter Fair Pay Act was set to occur on Wednesday, but is now going to happen on Friday of this week.  Most followers of this legislation view it, along with the Paycheck Fairness Act (which will also be voted on on Friday), to be warm-up votes to the Employee Free Choice Act.


To recap, Lilly Ledbetter worked at an Alabama Goodyear tire plant for nearly 20 years before learning that she was not paid as much as men performing her job duties and won $3.8 million for the apparent discriminatory pay.  But, the United States Supreme Court overruled the lower court and held that as the law is currently written, minorities have 180 days from the time their employer began paying them less than their counterparts in order to sue.  Since Ms. Ledbetter waited 20 years to sue, she was precluded from recovering money for the alleged disparate pay practices.


Tomorrow the House of Representatives is scheduled to vote on whether to pass the Lilly Ledbetter Fair Pay Act (and the Paycheck Fairness Act which I will write about over the weekend).  The bill was voted on last year, too, and went the way EFCA votes went: passed in the House of Representatives, but died in the Senate.  That was last year.  Now there are enough Democrats in Senate to prevent the Republicans from blocking this bill as well as the other pro-labor bills like EFCA, the RESPECT Act, the Patriot Employer Act, and the Flexible Working Families Act.


Both the Fair Pay Act (and the Paycheck Fairness Act) are touted as gender equity laws, but that is a misnomer – just like how there is no choice in the Employee Free Choice Act.  Liberals use an often quoted but rarely defined statistic that women make 77 cents for every dollar a man makes.  As stated by Allison Kasic:


This statistic compares the wages of the median full-time working man and the median full-time working woman.  It tells us nothing about the existence or non-existence of wage discrimination.  The wage gap ignores a myriad of other relevant factors including education level, years in the workforce, and type of occupation.  Once these other factors are taken into account, the wage gap shrinks.

The fall out of this legislation is enormous.  Ms. Kasic correctly states that the Fair Pay Act would allow a former employee – from 40 years ago – bring a lawsuit against a company long after that employee has moved on from the company.  Likewise, Drew Greenblatt the owner of Marlin Steel Wire Products, a small business that makes wire baskets, is scared that his employment insurance premiums will increase as a result of the myriad of unknown lawsuits that could be asserted decades later.  Without a doubt, the passage of this will make the cost of doing business increase exponentially.


Of course I will update you on both the Ledbetter Fair Pay Act and the Paycheck Fairness Act after Congress votes.