The ‘paycheck fairness’ bill would ban companies from asking about salary history

A freshly-passed House of Representatives bill aims to close workplace salary gaps for women by nationalizing a patchwork of state and local laws that require equal pay for men and women with similar duties.

“Paycheck Fairness Act,” which passed Wednesday 242 to 187, largely propelled by the Democratic majority, would also prohibit employers from asking about an applicant’s past compensation when calculating a salary offer, step up worker protections for asking about pay, and beef up pay data collection and enforcement.

The bill would heighten court damages and narrow the defenses companies can invoke to explain why men and women are paid differently.

It would also set up a grant program earmarking money to train women and girls to be better salary negotiators.

That’s all a great stride forward to help end a persistent gender pay gap problem, say supporters, who emphasize U.S. Census figures from 2017 finding women on average earn 80 cents for every dollar a man makes. The Bureau of Labor Statistics’ first pay data on men and women in 1979 said women made 62% of their male counterparts.

Following the vote from the House — which has a record number of female lawmakers — the bill’s on to the Republican-majority Senate. The bill was first introduced in 1997 and previously passed in the House in 2009.

Kristin Rowe-Finkbeiner, executive director of MomsRising, an advocacy group pushing for women’s and families’ economic security, said she’s “cautiously optimistic” that the Senate will pass the bill. And if this isn’t the year, it’s just a matter of when, in her view.

‘This is a situation where women win and the nation wins.’

— Kristin Rowe-Finkbeiner, executive director of MomsRising.org

“This is a situation where women win and the nation wins,” said Rowe-Finkbeiner. Pay parity would infuse the economy with another $512.6 billion of income by one estimate, she noted.

Critics, including the U.S. Chamber of Commerce and the Heritage Foundation, say they are against pay discrimination, but the proposed legislative cure is bad medicine. It would give short shrift to valid reasons for pay differences — like education and experience — all while giving plaintiffs lawyers an opening to file baseless cases, they contend.

Marc Freedman of the U.S. Chamber of Commerce questioned the projected $512 billion income infusion.

Critics including the U.S. Chamber of Commerce and the Heritage Foundation say the bill would give short shrift to valid reasons for pay differences — like education and experience.

“In order for parity to inject that amount of money into the economy, you have to assume that any pay differential between workers of different genders is based on discrimination and that employers would risk depriving themselves of talent by deliberately underpaying women,” said Freedman, vice president, workplace policy at the powerful business group’s Employment Policy Division.

More momentum for gender equity

Whatever the bill’s fate, it’s another shot of energy into pay equity issues — and broader workplace issues fueled by #MeToo — that are already very alive in courts of law, courts of public opinion and corporate boardrooms.

The Equal Pay Act, which requires equal pay for men and women, has been in place since 1963. But that law doesn’t do enough, advocates for the bill say. From 1997 and 2017, the Equal Employment Opportunity Commission received roughly 800 to 1,200 complaints annually about employers who were violating the Equal Pay Act.

A recent crop of state and local laws are going further on pay parity issues.

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For example, eight states — including California — and Puerto Rico now require equal pay for similar duties, according to attorney Denise Visconti of Littler Mendelson. The House bill would apply those rules at a national level, she said.

‘There’s an interest in doing the right thing, and not waiting for laws to be passed.’

— Denise Visconti, office managing shareholder at Littler Mendelson

Visconti, who advises all sorts of companies, says employers are already taking pay equity seriously to bolster employee relations and strengthen recruitment. Many in the C-Suite “understand this is important to their workforce,” she said. “There’s an interest in doing the right thing, and not waiting for laws to be passed.”

Likewise, court papers show several states and more than 10 municipalities now forbid employers from asking for a candidate’s salary history. Philadelphia, New York City and San Francisco now have laws extending to private employers.

Unfair pay differences will persist as long as companies make salary offers based on an applicant’s previous compensation, backers of the bill say.

The Paycheck Fairness Act would ban employers from asking about salary history, except to confirm past wages after an offer’s been made and a candidate volunteers a past salary number.

Philadelphia’s salary history ordinances are being challenged in a closely-watched federal appellate case. The Chamber of Commerce for Greater Philadelphia argues the rules wrongfully crimp businesses’ free speech rights to glean valuable information — not to mention, making the hiring process that much harder.

Judges in the Third Circuit heard that case this month after a lower court said the city couldn’t forbid employers from asking about salary history, but declined to block rules saying companies could not rely on past salary information.

The courts have also stepped into the issue of workplace pay data collection.

The EEOC was planning to gather pay information from companies that already supplied it with the race, ethnicity and gender breakdowns in its ranks. Earlier this month, a D.C. Federal Judge cleared the way for the workplace regulators to start gathering the information.

Weeks after the ruling, court records show federal lawyers haven’t filed a notice of appeal.

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