Paycheck Fairness Act Not The Answer
This month, proponents of radical revisions of pay equity laws have planned a number of events designed to generate support for the Paycheck Fairness Act (H.R. 1519 / S. 797). The New York Times has chimed in as well with an editorial characterizing last year’s defeat of this same bill as “a disappointing defeat for women” and concluded:
Lawmakers might think twice about refusing to act if they knew that female voters were taking down the names of those who would rather please corporate interests than stand up for a woman’s right to earn equal pay for equal work.
This is a cheap shot. The U.S. Chamber of Commerce strongly supports equal pay for equal work. That is the basic premise behind the Equal Pay Act of 1963, a law the Chamber supports (in addition to Title VII of the Civil Rights Act of 1964, the other major federal law addressing pay discrimination).
Our concerns about the Paycheck Fairness Act are a matter of public record, but don’t take our word for it. As the Boston Globe wrote during debate on this bill last year:
companies are right to be concerned that this bill, as written, is too deep an intrusion.
Discussing the more serious problems with the bill, the Boston Globe noted:
Most problematically, it would alter the burden on businesses, requiring them to prove that any difference in pay is the result of a business necessity, and to demonstrate why they didn’t adopt a plaintiff’s suggested “alternative remedy’’ that wouldn’t result in a pay gap.
But what if a company offers a higher salary for retail workers in a more dangerous location, and more men sign up? What if a male worker leverages a job offer into a higher salary? Should these be illegal acts? The bill would create too strong a presumption in favor of discrimination over other, equally plausible explanations for disparities in salaries. In addition, the threat of much higher damage awards by juries might lead businesses to make quick settlements for frivolous claims. (Today, about 60 percent of discrimination claims tracked by the Equal Employment Opportunity Commission are found to have no merit.)
Earlier, the Washington Post weighed in on this same provision, noting:
But the bill does not stop there. It also mandates that the business necessity defense "shall not apply" when 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." But what if the employer has refused because it has concluded that the alternative is -- contrary to the employee's assertion -- more costly or less efficient? What if the employee and employer disagree on what the business purpose is or should be?
This approach also could make employers vulnerable to attack for responding to market forces. Take an employer who gives a hefty raise to a valued male employee who has gotten a job offer from a competitor. Would a court agree that the raise advanced a legitimate business purpose or could the employer be slammed unless he also bumps up the salary of a similarly situated female employee?
These editorials help illustrate that the Paycheck Fairness Act includes provisions with serious policy implications with which reasonable people can disagree. Proponents of the bill would prefer to engage in ad hominem attacks. I suppose that we should not be surprised, but it is still disappointing.
We think the Post summed it up appropriately when it said “Discrimination is abhorrent, but the Paycheck Fairness Act is not the right fix.”
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