Legislative Roundup for the Week of January 21, 2013

In the week following President Obama’s inauguration, lawmakers reintroduced familiar legislation dealing with equal pay, whistleblower protections, immigration reform, and retirement security in bankruptcy protection.

Equal Pay

On January 23, 2013, Sen. Barbara Mikulski (D-MD) and Rep. Rosa DeLauro (D-CT) reintroduced a bill that would amend the Fair Labor Standards Act (FLSA) to, among other things, provide for potentially unlimited compensatory and punitive damages in gender-based wage discrimination cases and weaken an employer’s affirmative defense against such claims. The latest version of the Paycheck Fairness Act (S. 84, H.R. 377) was introduced with 27 cosponsors in the Senate and 150 cosponsors in the House. Among other provisions, this bill would do the following:

  • Expand damages under the Equal Pay Act to include potentially unlimited compensatory and punitive awards.
  • Prevent employers from relying on the “factor other than sex” affirmative defense in wage discrimination cases. An employer would be required to show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity. An employee could rebut this claim by showing that an alternative employment practice exists that could achieve the same business purpose.
  • Incorporate anti-retaliation provisions into the FLSA that would protect employees who have made a complaint, filed a charge, testified or otherwise assisted in an investigation or proceeding related to an unfair wage complaint. The provisions would also protect employees who have inquired about or discussed theirs or their coworkers’ wages.
  • Eliminate the requirement that employees work in the same establishment for wage comparison purposes. An employer’s establishment would include workplaces located in the same county or similar political subdivision of a state.
  • Direct the Equal Employment Opportunity Commission (EEOC) to collect pay data from employers based on race, gender, and national origin.
  • Reinstate the Equal Opportunity Survey, to be administered by the Office of Federal Contract Compliance Programs (OFCCP). The EO survey, which was abolished during the Bush Administration, allowed the agency to gather certain employment information from federal contractors and subcontractors related to their Affirmative Action Programs, personnel activity and compensation. In addition to reinstating the EO survey, the Paycheck Fairness Act would provide the OFCCP with additional investigative methodologies to use in performing compensation analysis.

The last version of this bill failed to advance in the Senate in June of last year. Although the Senate Democratic majority did gain two seats in the November elections, passing the Paycheck Fairness Act is still unlikely.

Another pay-related bill – the Fair Pay Act (S. 168, H.R. 438) – was also recently reintroduced in both chambers. This measure would amend the FLSA by introducing the concept of equal pay for comparable – not equal – work. Specifically, the Fair Pay Act would make it unlawful for employers to:

discriminate, within any establishment in which such employees are employed, between employees on the basis of sex, race, or national origin by paying wages to employees in such establishment in a job that is dominated by employees of a particular sex, race, or national origin at a rate less than the rate at which the employer pays wages to employees in such establishment in another job that is dominated by employees of the opposite sex or of a different race or national origin, respectively, for work on equivalent jobs. (emphasis added)

The Act defines “equivalent jobs” as those “that may be dissimilar, but whose requirements are equivalent, when viewed as a composite of skills, effort, responsibility, and working conditions.”

Employers would be prohibited from reducing other employees’ wages in order to achieve pay equity. The bill would, however, allow payment of different wages under a seniority system, merit system, or system that measures earnings by quantity or quality of production. Employers would also be able to base a pay differential on a bona fide factor other than sex such as education, training and experience, but in doing so must first demonstrate that the factor is job-related, furthers a legitimate business purpose, and no less discriminatory alternatives exist that would serve the same business purpose.

The measure includes employee protections in the event a claimant is fired or discriminated against for opposing any practices made unlawful under this act, filing a claim or participating in an investigation, inquiring about coworkers’ salaries, or disclosing one’s own pay to others. Employees alleging violations of this act would be entitled to compensatory and punitive damages.

This bill has been referred to the House Committee on Education and the Workforce and the Senate Committee on Health, Education, Labor and Pensions. The measure is not expected to advance.

Whistleblower Protections

On January 22, Senators Patrick Leahy (D-VT) and Chuck Grassley (R-IA) reintroduced the Criminal Antitrust Anti-Retaliation Act of 2013 (S. 42), a bill that would extend whistleblower protections to employees who provide information to the Department of Justice (DOJ) regarding criminal antitrust violations. Provisions of this measure would amend the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 by adding a new section on whistleblower protections for employees, contractors, subcontractors, and employer agents.

Among other things, the bill would make it unlawful for an employer to “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against a whistleblower in the terms and conditions of employment” because the individual provides to the DOJ information about an act or omission that he or she reasonably believes violates an antitrust law or other criminal law committed in conjunction with the potential antitrust law violation. The bill would also protect any individual who participates or assists in an investigation or proceeding regarding an antitrust violation. The whistleblower protections would not apply to an individual who planned and initiated the antitrust law breach or other criminal law violation committed along with the antitrust violation. The protections afforded by this bill are modeled on similar whistleblower laws currently in effect. This legislation has been referred to the Senate Committee on the Judiciary.

Immigration

Signaling that comprehensive immigration reform will be a legislative priority this term, Sen. Majority Leader Harry Reid (D-NV) introduced the Immigration Reform that Works for America’s Future Act (S. 1) as the first Senate bill introduced in the 113th Congress. This measure outlines ten goals that a more comprehensive measure should include, such as the creation of “an effective electronic verification system and strengthen enforcement to prevent employers from hiring people here illegally.” Shortly after this bill was introduced, a group of eight senators released a bipartisan framework for comprehensive immigration reform that includes many of these goals.

Retirement Protection

Last week, Rep. John Conyers, Jr. (D-MI) reintroduced the Protecting Employees and Retirees in Business Bankruptcies Act (H.R. 100), a bill designed to strengthen the ability of employees to recover wages and benefits and restrict the awarding of bonuses in the event of their employer’s bankruptcy. Among other things, this legislation would:

  • Double the maximum value of wage claims entitled to priority payment for each worker to $20,000;
  • Allow a second claim of up to $20,000 for contributions to employee benefit plans;
  • Eliminate the restriction that wage and benefit claims must be earned within 180 days of the bankruptcy filing in order to be entitled to priority payment;
  • Allow workers to assert claims for losses in certain defined contribution plans when such losses result from employer fraud or breach of fiduciary duty;
  • Establish a new priority administrative expense for workers’ severance pay;
  • Clarify that back pay awarded via WARN Act damages are entitled to the same priority as back pay for other legal violations;
  • Restrict the situations in which collective bargaining agreements can be rejected, tighten the criteria by which collective bargaining agreements can be amended, and encourage negotiated settlements;
  • Toughen the procedures through which retiree benefits can be reduced or eliminated, including preventing companies seeking retiree health benefit reductions from singling out non-management retirees for concessions;
  • Require courts to consider the impact that a bidder’s offer to purchase a company’s assets would have on maintaining existing jobs and preserving retiree pension and health benefits;
  • Clarify that the principal purpose of Chapter 11 bankruptcy is the preservation of jobs to the maximum extent possible;
  • Require disclosure and court approval of executive compensation for firms in bankruptcy;
  • Prohibit the payment of bonuses and other forms of incentive compensation to senior officers and others; and
  • Ensure that insiders cannot receive retiree benefits if workers have lost their retirement or health benefits.

This measure has been referred to the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law.

Paycheck Fairness Act Stalls in Senate

As expected, supporters of the Paycheck Fairness Act (S. 3220) failed to muster the votes needed to advance the bill to a final Senate vote. Despite the Administration’s Statement of Policy (pdf) “strongly support[ing]” the measure’s passage, the Senate voted 52-47 in favor of moving it forward, 8 votes shy of the 60 needed. A procedural maneuver to bring companion legislation (H.R. 1519) to the House floor recently failed as well, effectively killing any chance of passage the Paycheck Fairness Act would have this year.

Among other changes, the Paycheck Fairness Act would have:

  • Expanded damages under the Equal Pay Act (EPA) to include potentially unlimited backpay and punitive awards.
  • Weakened an employer’s ability to raise the “factor other than sex” affirmative defense in a wage discrimination case. Under the more stringent standard, an employer would have to prove that a pay differential was based on a “bona fide factor other than sex, such as education, training, or experience,” and that this other factor is job-related and consistent with business necessity. An employee would be able to rebut this claim by a showing that an alternate business practice exists that would not result in the disparity.
  • Eased the requirements for bringing a class action lawsuit under the EPA.
  • Prohibited retaliation against employees who made a complaint, filed a charge, testified or otherwise assisted in an investigation or proceeding related to an unfair wage complaint.
  • Made it unlawful for an employer to prevent employees from discussing or comparing salaries.
  • Eliminated the requirement that employees work in the same establishment for wage comparison purposes. An employer’s establishment would include workplaces located in the same county or similar political subdivision of a state.
  • Allowed the Equal Employment Opportunity Commission (EEOC) to collect pay data from employers.
  • Reinstated the Equal Opportunity Survey, to be administered by the Office of Federal Contract Compliance Programs (OFCCP), and provided the agency with additional investigative methodologies to use in performing compensation analysis. The previously-abolished EO survey allowed the OFCCP to gather certain employment information from federal contractors and subcontractors related to their Affirmative Action Programs, personnel activity and compensation.

In a letter (pdf) to Senate leaders, various business associations and advocates had urged the chamber to oppose the bill. According to their position, the Paycheck Fairness Act:

would impose unprecedented government control over how employees are paid at even the nation’s smallest employers. This flawed legislation could outlaw many legitimate practices that employers currently use to set employee pay rates, even where there is no evidence of intentional discrimination. Common practices that a court could find unlawful under S. 3220 include providing premium pay for professional experience, education, shift differentials or hazardous work, as well as pay differentials based on local labor market rates or an organization’s profitability. This level of government intervention in employee compensation is both unprecedented and unwarranted in the United States.

The Paycheck Fairness Act has been introduced a number of times in both chambers over the past 15 years. The previous Senate vote on the measure in 2010 also failed along party lines.

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Paycheck Fairness Act Moves Forward

On Thursday, Sen. Majority Leader Harry Reid (D-NV) filed a motion that would allow the Senate to debate and vote on the Paycheck Fairness Act (S. 3220).  A vote on this motion – which requires at least 60 votes to pass – is scheduled for 2:15 p.m. on Tuesday, June 5, after the chamber returns from a week-long Memorial Day recess.

Sen. Barbara Mikulski (D-MD) reintroduced this bill on May 22. This legislation would amend the Fair Labor Standards Act (FLSA) to, among other things, provide for potentially unlimited compensatory and punitive damages in gender-based wage discrimination cases and significantly weaken an employer’s ability to defend against such claims. Specifically, the bill would do the following:

  • Expand damages under the Equal Pay Act to include potentially unlimited compensatory and punitive awards.
  • Prevent employers from relying on the “factor other than sex” affirmative defense in wage discrimination cases. An employer would be required to show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity. An employee could rebut this claim by showing that an alternative employment practice exists that could achieve the same business purpose.
  • Incorporate anti-retaliation provisions into the FLSA that would protect employees who have made a complaint, filed a charge, testified or otherwise assisted in an investigation or proceeding related to an unfair wage complaint. The provisions would also protect employees who have inquired about or discussed theirs or their coworkers’ wages.
  • Eliminate the requirement that employees work in the same establishment for wage comparison purposes. An employer’s establishment would include workplaces located in the same county or similar political subdivision of a state.
  • Direct the Equal Employment Opportunity Commission to collect pay information.
  • Reinstate the Equal Opportunity Survey, to be administered by the Office of Federal Contract Compliance Programs (OFCCP). The EO survey, which was abolished during the Bush Administration, allowed the agency to gather certain employment information from federal contractors and subcontractors related to their Affirmative Action Programs, personnel activity and compensation. In addition to reinstating the EO survey, the Paycheck Fairness Act would provide the OFCCP with additional investigative methodologies to use in performing compensation analysis.

A cloture vote on the motion to proceed to the Paycheck Fairness Act failed by two votes in November of 2010, blocking consideration of the bill. Given the current composition of the Senate, the vote is again likely to fall short of the 60 votes needed to advance the bill.

Senate Reintroduces, May Attempt to Advance, Paycheck Fairness Act

On May 22, 2012, Sen. Barbara Mikulski (D-MD) reintroduced the Paycheck Fairness Act (S. 3220) in the Senate with 31 co-sponsors. This legislation would amend the Fair Labor Standards Act (FLSA) to, among other things, provide for potentially unlimited compensatory and punitive damages in gender-based wage discrimination cases and weaken an employer’s affirmative defense against such claims. According to one report, Sen. Majority Leader Harry Reid (D-NV) intends to file a motion to advance this bill the week of June 4.

Although a copy of the latest version of the Paycheck Fairness Act is not yet available, the text of the same bill Sen. Mikulski introduced last year (S. 797) would do the following:

  • Expand damages under the Equal Pay Act to include potentially unlimited compensatory and punitive awards.
  • Prevent employers from relying on the “factor other than sex” affirmative defense in wage discrimination cases. An employer would be required to show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity. An employee could rebut this claim by showing that an alternative employment practice exists that could achieve the same business purpose.
  • Incorporate anti-retaliation provisions into the FLSA that would protect employees who have made a complaint, filed a charge, testified or otherwise assisted in an investigation or proceeding related to an unfair wage complaint. The provisions would also protect employees who have inquired about or discussed theirs or their coworkers’ wages.
  • Eliminate the requirement that employees work in the same establishment for wage comparison purposes. An employer’s establishment would include workplaces located in the same county or similar political subdivision of a state.
  • Reinstate the Equal Opportunity Survey, to be administered by the Office of Federal Contract Compliance Programs (OFCCP). The EO survey, which was abolished during the Bush Administration, allowed the agency to gather certain employment information from federal contractors and subcontractors related to their Affirmative Action Programs, personnel activity and compensation. In addition to reinstating the EO survey, the Paycheck Fairness Act would provide the OFCCP with additional investigative methodologies to use in performing compensation analysis.

A motion to proceed to consideration of the Paycheck Fairness Act failed by two votes in November of 2010. It is unlikely this bill – if acted upon – would survive a similar motion given the current composition of the Senate.

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Pay-Related Bills Reintroduced in House and Senate

Timed to commemorate National Equal Pay Day on April 12, various lawmakers reintroduced the Paycheck Fairness Act (H.R. 1519, S. 797) and the Fair Pay Act (H.R. 1493, S. 788), bills that would amend the Fair Labor Standards Act (FLSA) to promote pay equity. The first measure, the Paycheck Fairness Act, would amend the FLSA to provide for potentially unlimited compensatory and punitive damages in gender-based wage discrimination cases and weaken an employer’s affirmative defense against such claims, among other things. As previously discussed in this blog, the measure would:

  • Expand damages under the Equal Pay Act to include potentially unlimited compensatory and punitive awards.
  • Prevent employers from relying on the “factor other than sex” affirmative defense in wage discrimination cases. Under the new legislation, an employer would be required to show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity. An employee could rebut this claim by showing that an alternative employment practice exists that could achieve the same business purpose.
  • Incorporate anti-retaliation provisions into the FLSA that would protect employees who have made a complaint, filed a charge, testified or otherwise assisted in an investigation or proceeding related to an unfair wage complaint. The provisions would also protect employees who have inquired about or discussed theirs or their coworkers’ wages.
  • Eliminate the requirement that employees work in the same establishment for wage comparison purposes. Under this bill, an employer’s establishment would include workplaces located in the same county or similar political subdivision of a state.
  • Reinstate the Equal Opportunity Survey, to be administered by the Office of Federal Contract Compliance Programs (OFCCP). The EO survey, which was abolished during the Bush Administration, allowed the agency to gather certain employment information from federal contractors and subcontractors related to their Affirmative Action Programs, personnel activity and compensation. In addition to reinstating the EO survey, the Paycheck Fairness Act would provide the OFCCP with additional investigative methodologies to use in performing compensation analysis.

In November 2010, the measure fell two votes shy of the 60 votes needed to advance in the Senate. Given the current composition of Congress, the Paycheck Fairness Act is expected to stall in this Congress as well.

The Fair Pay Act will presumably share a similar fate. This measure would amend the FLSA by introducing the concept of equal pay for comparable – not equal – work. Specifically, the Fair Pay Act would make it unlawful for employers to:

discriminate, within any establishment in which such employees are employed, between employees on the basis of sex, race, or national origin by paying wages to employees in such establishment in a job that is dominated by employees of a particular sex, race, or national origin at a rate less than the rate at which the employer pays wages to employees in such establishment in another job that is dominated by employees of the opposite sex or of a different race or national origin, respectively, for work on equivalent jobs. (emphasis added)

The Act defines “equivalent jobs” as those “that may be dissimilar, but whose requirements are equivalent, when viewed as a composite of skills, effort, responsibility, and working conditions.”

The bill directs the Equal Employment Opportunity Commission (EEOC) to establish “guidelines” for employers to use in setting compensation. Employers would be prohibited from reducing other employees’ wages in order to achieve pay equity. In addition, employers would be required to maintain and disclose job categories and pay scales as needed to enforce the law. The bill would, however, allow payment of different wages under a seniority system, merit system, or system that measures earnings by quantity or quality of production. Employers would also be able to base a pay differential on a bona fide factor other than sex such as education, training and experience, but in doing so must first demonstrate that the factor is job-related, furthers a legitimate business purpose, and no less discriminatory alternatives exist that would serve the same business purpose.

The measure includes employee protections in the event a claimant is fired or discriminated against for opposing any practices made unlawful under this act; filing a claim or participating in an investigation, inquiring about coworkers’ salaries or disclosing one’s own pay to others. Employees alleging violations of this act would be entitled to compensatory and punitive damages.

Given the date of the bills’ introduction, it is likely that the move was largely symbolic.

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Paycheck Fairness Act Fails to Clear Senate Hurdle

As expected, supporters of the Paycheck Fairness Act (S. 3772) failed to garner enough votes to advance the measure in the Senate, effectively killing the bill for the foreseeable future. The motion to move the bill closer to a vote failed by a margin of 58-41, short of the needed 60 votes. Senator Ben Nelson (D-NE) joined all Republicans present in opposing the bill. Senator Lisa Murkowski (R-AK) did not vote. At least 60 votes were needed to avoid the inevitable filibuster against the legislation, which would have, among other things, amended the Fair Labor Standards Act (FLSA) to provide for unlimited compensatory and punitive damages in gender-based wage discrimination cases, weakened an employer’s affirmative defense against such claims, incorporated anti-retaliation provisions into the FLSA, eliminated the requirement that employees work in the same establishment for wage comparison purposes, reinstated the Office of Federal Contract Compliance Programs (OFCCP) Equal Opportunity Survey, and required employees to “opt-out” of instead of “opt-in” to a class action lawsuit. These changes would likely have led to a dramatic increase in equal pay lawsuits, and undermined an employer’s ability to defend against them. As Sen. Mike Enzi (R-WY) stated before his vote was cast, “a better title for this bill should be the Jobs for Trial Lawyers Act.”

Sen. Majority Leader Harry Reid (D-NV) reintroduced the Paycheck Fairness Act in September. Former Sen. Hillary Clinton (D-NY) had introduced this measure as S. 182 in the Senate on January 9, 2009, the same day the House passed its companion bill (H.R. 12). It was probably believed that the measure had the best shot of passage during Congress’s lame duck session, as fewer supporters will remain in both the House and Senate come January as a result of the midterm election.

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Motion Filed to Begin Consideration of Paycheck Fairness Act

On Wednesday, Sen. Majority Leader Harry Reid (D-NV) filed a cloture motion to proceed with consideration of the Paycheck Fairness Act (S. 3772). This procedural action sets up a vote on the bill – which would, among other things, amend the Fair Labor Standards Act (FLSA) to provide for unlimited compensatory and punitive damages in gender-based wage discrimination cases and weaken an employer’s affirmative defense against such claims – when the Senate returns from the recess for upcoming elections.

Business advocates have been stepping up their lobbying efforts against this legislation’s passage. Testifying at a recent Congressional hearing on wage disparity, one witness claimed (pdf) that the measure “would spawn a tidal wave of lawsuits and enmesh employers in endless litigation. The bill is a full-employment act for lawyers . . .” Among the criticized provisions was the elimination of the “establishment” requirement that employees must work in the same place of employment for wage comparison purposes. As a result, an employer would be required to pay all workers who perform the same or similar function the same wage, regardless of the location’s cost of living or desirability. Additionally, an employer would be permitted to defend a gender pay disparity only if the neutral criteria used to make the pay decision was a “business necessity” – an often difficult argument to make. Moreover, the legislation’s provision that employees must “opt-out” of instead of “opt-in” to a class action lawsuit would increase the incidence of such suits.

In addition, the bill would reinstate the Equal Opportunity (EO) Survey, which would permit the Office of Federal Contract Compliance Programs (OFCCP) to obtain wage-related information from federal contractors and subcontractors, and require the Equal Employment Opportunity Commission (EEOC) to similarly collect and analyze wage data from employers, increasing a business’s administrative burden.

Sixty votes are needed to end debate on proceeding to the measure, and vote is expected to be very close.

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Paycheck Fairness Act Reintroduced in Senate

Legislation that would amend the Fair Labor Standards Act (FLSA) to increase remedies for violations of the Equal Pay Act (EPA) and make it more difficult to defend against such claims was reintroduced in the Senate on Monday. Sen. Majority Leader Harry Reid (D-NV) introduced the Paycheck Fairness Act (S. 3772) with 13 cosponsors. Former Sen. Hillary Clinton (D-NY) had introduced this measure as S. 182 in the Senate on January 9, 2009, the same day the House passed its companion bill (H.R. 12). The White House recently urged the bill’s passage during a forum on work and family issues, calling it “a common-sense bill that will help ensure that men and women who do equal work receive the equal pay that they and their families deserve.”

Among other things, the Paycheck Fairness Act would do the following:

  • Expand damages under the EPA to include potentially unlimited compensatory and punitive awards.
  • Prevent employers from relying on the “factor other than sex” affirmative defense in wage discrimination cases. Under the new legislation, an employer would be required to show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity. An employee could rebut this claim by showing that an alternative employment practice exists that could achieve the same business purpose.
  • Incorporate anti-retaliation provisions into the FLSA that would protect employees who have made a complaint, filed a charge, testified or otherwise assisted in an investigation or proceeding related to an unfair wage complaint. The provisions would also protect employees who have inquired about or discussed theirs or their coworkers’ wages.
  • Eliminate the requirement that employees work in the same establishment for wage comparison purposes. Under this bill, an employer’s establishment would include workplaces located in the same county or similar political subdivision of a state.
  • Reinstate the Equal Opportunity Survey, to be administered by the Office of Federal Contract Compliance Programs (OFCCP). The EO survey, which was abolished during the Bush Administration, allowed the agency to gather certain employment information from federal contractors and subcontractors related to their Affirmative Action Programs, personnel activity and compensation. In addition to reinstating the EO survey, the Paycheck Fairness Act would provide the OFCCP with additional investigative methodologies to use in performing compensation analysis.

The reintroduced Paycheck Fairness Act has been placed on the Senate calendar, although the timing of its consideration is uncertain.

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White House Urges Passage of Paycheck Fairness Act, Lists Other Efforts to Address Pay Disparity

During the White House Middle Class Task Force forum on work and family issues, the White House and various members of the administration called for passage of the Paycheck Fairness Act (H.R. 12, S. 182), equal pay legislation that cleared the House of Representatives in January 2009. Specifically, this measure would, among other things, expand damages under the Equal Pay Act of 1963 to include potentially unlimited compensatory and punitive awards, amend the broad affirmative defense previously available to employers that the pay differential in question is caused by a factor other than sex, and would eliminate the “establishment” requirement that employees must work in the same place of employment for wage comparison purposes.

According to Vice President Biden’s domestic policy advisor, the nation’s gender pay gap cannot be fully addressed without passing the Paycheck Fairness Act:

The Paycheck Fairness Act gives women more tools to get fair pay in the workplace. For example, the legislation allows employees to inquire about wages or share salary information without fear of reprisals. The Act closes loopholes that make it harder for women to challenge being paid different wages for the same work, and it ensures that women who prove their case are compensated fairly.

In addition to supporting the bill’s passage, the Equal Pay Enforcement Task Force, which is comprised of members of the Equal Employment Opportunity Commission (EEOC), the Department of Justice (DOJ), the Department of Labor (DOL), and the Office of Personnel Management (OPM), issued a number of other recommendations (pdf) to address pay discrimination during the forum. These suggestions include the following:

  • Improve interagency coordination and enforcement efforts to maximize effectiveness of existing authorities.
  • Collect data on the private workforce to better understand the scope of the pay gap and target enforcement efforts.
  • Undertake a public education campaign to educate employers on their obligations and employees on their rights.
  • Implement a strategy to improve the federal government’s role as a model employer.

To that end, Secretary of Labor Hilda Solis announced that the Office of Federal Contract Compliance Programs (OFCCP) will issue an advanced notice of proposed rulemaking (ANPRM) early next year that will seek input on how to improve the Equal Opportunity (EO) survey. The EO survey, which was abolished during the Bush Administration, allowed the agency to gather certain employment information from federal contractors and subcontractors related to their Affirmative Action Programs, personnel activity and compensation. The Paycheck Fairness Act would reinstate the EO survey, and provide the OFCCP with additional investigative methodologies to use in performing compensation analysis.

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Obama Establishes National Equal Pay Day

President Obama has issued a proclamation establishing April 20 as “National Equal Pay Day.” This day is meant to symbolize “the day when an average American woman's earnings finally match what an average American man earned in the past year.” In a statement supporting Equal Pay Day, Labor Secretary Hilda Solis called for passage of the Paycheck Fairness Act (H.R. 12, S. 182), legislation that cleared the House of Representatives “and is gaining momentum in the Senate.” This measure would expand damages under the Equal Pay Act of 1963 to include potentially unlimited compensatory and punitive awards. In addition, it would amend the broad affirmative defense previously available to employers that the pay differential in question is caused by a factor other than sex. The bill would also eliminate the “establishment” requirement that employees must work in the same place of employment for wage comparison purposes.

Solis also mentioned other DOL efforts to promote wage equality, including the fact that the Office of Federal Contract Compliance Programs (OFCCP) “has renewed its emphasis on the identification and elimination of gender-based discrimination at the worksites of federal contractors.” Solis added that the Women's Bureau “is conducting research and analysis, providing technical assistance and building partnerships to increase women's incomes, narrow the wage gap and reduce income inequality.”

On January 29, 2009, President Obama signed into law the Lilly Ledbetter Fair Pay Act, which effectively eliminates the statute of limitations in wage discrimination cases by resetting the time limit for filing suit every time a claimant receives a paycheck or other form of compensation whose amount stems from an alleged act of discrimination.
 

Legislative and Regulatory News for the Week of Jan. 4

Discrimination in the Workplace

In the absence of EEOC regulations governing the Americans with Disabilities Act Amendments Act (ADAAA), which took effect January 1, two Department of Labor organizations have provided compliance guidance and practice tips for employers.

Employment Wage and Hour Law

The House passed the Lilly Ledbetter Fair Pay Act (H.R. 11) and the Paycheck Fairness Act (H.R. 12), two bills that will make it easier for employees to sue for wage discrimination.

Immigration

The Federal Government has agreed to delay the effective date of the E-Verify federal contractor regulation – which was announced in November – until February 20, 2009.
 

House Passes Pay-Related Bills Without Amendment, Paving Way for Senate Approval

As anticipated, the House swiftly passed two pay-related bills that will make it easier for employees to sue for wage discrimination. The Paycheck Fairness Act (H.R. 12) and the Lilly Ledbetter Fair Pay Act (H.R. 11) were put to a vote without amendment, as they had been heavily vetted in the last Congress, yet failed to survive the Senate. The House today voted 256-163 in favor of the Paycheck Fairness Act, and 247-171 in favor of the Lilly Ledbetter Fair Pay Act. They will be sent to the Senate – which is likely to be more receptive to these bills this time around – as a package. Consideration may begin as early as next week. If approved, President-elect Obama will almost certainly sign them into law, starting the 111th Congress off to a decidedly worker-friendly start. Interestingly, Congress got off to a similar start in the Clinton era by passing a previously-vetted Family and Medical Leave Act as its first major bill weeks after Clinton took office.

Among other things, the Paycheck Fairness Act expands damages under the Equal Pay Act of 1963 to include potentially unlimited compensatory and punitive awards. In prepared remarks in opposition to this bill, Rep. Howard “Buck” McKeon (R-CA), senior Republican member on the U.S. House Education and Labor Committee, referred to this aspect of the legislation as a “trial lawyer boondoggle” that would encourage more and costlier lawsuits.

Additionally, the bill amends the broad affirmative defense previously available to employers that the pay differential in question is caused by a factor other than sex. Under the new legislation, an employer is required to show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and consistent with business necessity. An employee can rebut this claim by showing that there exists an alternative employment practice that would serve the same business purpose without resulting in the pay disparity, and that the employer has refused to adopt this alternative practice. It is this portion of the affirmative defense that will likely cause significant litigation, pitting the viability of an alternative work practice against the employer’s sound business discretion.

The Act also eliminates the “establishment” requirement that employees must work in the same place of employment for wage comparison purposes. Under this bill, an employer’s establishment would include workplaces located in the same county or similar political subdivision of a state.

The Lilly Ledbetter Fair Pay Act amends the Civil Rights Act of 1964 to declare that an unlawful employment practice occurs when: (1) a discriminatory compensation decision or other practice is adopted; (2) an individual becomes subject to the decision or practice; or (3) an individual is affected by application of the decision or practice, including each time compensation is paid. Stated differently, this bill would allow plaintiffs to bring wage claims years after the alleged discrimination occurred. The Ledbetter Act would reinstitute the “paycheck rule,” which was expressly rejected in the Supreme Court decision Ledbetter v. Goodyear Tire & Rubber Co. In this case, the Supreme Court held that employees cannot challenge ongoing compensation discrimination if the employer's original discriminatory decision occurred more than 180 days before. Under the paycheck rule, the statute of limitations for filing a wage claim would effectively be reset each time the employee receives a paycheck. Liability accrues, so an aggrieved claimant could recover back pay and other relief for up to two years preceding the filing of the charge, where the unlawful employment practices that have occurred during the charge filing period are similar or related to practices that occurred outside the time for filing a charge. These amendments would apply to claims of pay discrimination under Title VII, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973, and the Age Discrimination in Employment Act of 1967.

Either of these bills, if enacted, would open the doors to increased wage discrimination litigation. Under the Lilly Ledbetter Fair Pay Act, employers could be scrutinized – and made liable for – acts and decisions made years earlier. Moreover, a worker or retiree could seek damages against a company run by employees and executives who had nothing to do with the initial act of alleged discrimination that occurred 5, 10, or even 20 years earlier. Trying to reconstruct ancient alleged acts of discrimination in order to defend these lawsuits could prove challenging for employers. Under the Paycheck Fairness Act, a valuable affirmative defense would be significantly restricted. With either Act, employers face increased financial penalties for any violations.

Two Pay-Related Labor Bills Slated to Reach the House Floor this Week

Before the 111th Congress has even convened, House Majority Leader Steny Hoyer (D-Md.) announced that two employment-related bills will reach the House floor later this week. Both the Paycheck Fairness Act (H.R. 12) and the Lilly Ledbetter Fair Pay Act (H.R. 11) were introduced and easily passed the House during the last Congress, but stalled in the Senate due primarily to Republican opposition and a presidential veto threat. It is noteworthy that both bills are being sent directly to the House floor instead of being vetted through the committee process. In anticipation of a possible Democratic White House in 2009, congressional Democrats in the 110th Congress launched a comprehensive labor and employment law legislative agenda. (For more information, see Littler’s Report Transition to a New (Work) Day: An Initial Look At Workplace Change in the Obama Era). Congressional Democrats intended to vet this agenda in advance so that when the 111th Congress convened on January 6, 2009, these laws could be quickly enacted with the threat of a presidential veto removed. The introduction of the Paycheck Fairness Act and the Lilly Ledbetter Fair Pay Act directly to the House floor is the first installment in the full-implementation of this strategy.

The Paycheck Fairness Act was introduced in the House in 2008  (H.R. 1338) by Rep. Rosa DeLauro (D-Conn.), with a similar measure introduced in 2007 in the Senate by Sen. Hillary Clinton (D-NY), and passed by a vote of 247 to 178 in the House, but failed to survive Senate consideration. The bill that will reach the House floor this week aims to do the following:

  • Amend the Fair Labor Standards Act (FLSA) to allow victims of pay discrimination to potentially recover more remedies than those currently provided in the FLSA
  • Prevent employers from relying on the “factor other than sex” affirmative defense in wage discrimination cases; instead, employers must additionally prove that such factor is “job related” and serves a “legitimate business purpose.” An employee could rebut this claim by showing that an “alternative employment practice” exists that could achieve the same business purpose
  • Eliminate the requirement that employees work in the same establishment for wage comparison purposes
  • Entitle employees to unlimited punitive and compensatory damages
  • Require the Department of Labor to establish guidelines for employers to use in determining compensation

The biggest impact this bill would have on employers is the loss of the broad “factor other than sex” affirmative defense in wage discrimination cases.  Doing so would make it extremely difficult for employers to defend against these types of claims.

Another bill set to hit the House floor would allow plaintiffs to bring discrimination claims impacting their pay years after the alleged discriminatory acts occurred. The Lilly Ledbetter Fair Pay Act (H.R. 2831), introduced by Rep. George Miller (D-Calif.) in 2007, sought to amend many federal civil rights statutes – including the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Rehabilitation Act – by imposing the “paycheck rule.” Under this rule – expressly rejected by the U.S. Supreme Court in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007) – the statute of limitations is reset each time the employee receives his or her paycheck if it can be proved that the compensation decisions generating the pay were discriminatory.

After passing the House in the last Congress, this bill failed by only four votes to gain sufficient support in the Senate to invoke cloture and stave off a Republican filibuster. Now that the Democrats control the Senate, both bills could be passed without much fanfare. Although sending bills straight to the House floor – especially so early in the session – is somewhat unusual, doing so comports with the Democrats’ stated agenda to push through employment- and labor-related bills that have already been vetted by the last Congress. Expect to see more employment legislation that didn’t survive the 110th Congress being fast-tracked in a similar manner in the coming weeks.