The Paycheck Fairness Act strengthens protections against compensation discrimination. It narrows the defense that employers can use to demonstrate that a difference in compensation is not based on gender. Under the Act, employers must show that the difference in compensation is not based on or derived from a sex-based difference in compensation and is related to job performance. Additionally, the legislation clarifies that, for the purpose of determining discrimination, compensation comparisons can be made between employees even if they do not work at the same physical place of business. The Act also prohibits employers from retaliating against employees who share salary information. The bill permits employees to seek compensatory and punitive damages against employers who violate the Equal Pay, which is currently not allowed. The legislation makes it easier to file class action lawsuits under the Equal Protection Act.
The Paycheck Fairness Act authorizes the Secretary of Labor to establish a grant program for negotiation skills training for girls and women, mandates the Secretary to disseminate research about the elimination of pay disparities between men and women, and creates an award to encourage proactive efforts to comply with the Act. Finally, the bill improves the collection and publication of information about compensation discrimination, while providing technical assistance to small businesses to carry out the legislation.
The Paycheck Fairness Act authorizes $15 million to carry out the provisions of the Act.
The Middle-Class Position:
The Middle Class Supports. Despite improvement in compensation disparity between men and women since the passage of the Equal Pay Act in 1963, the wage gap still persists. Women make approximately 77 cents for every dollar earned by a man. In 2006, the median income of men was $42,261 while that of women was only $32,515. The disparity is even greater for minority women. A recent report by the American Association of University Women found that discrimination is a significant factor contributing to the pay gap between men and women. Further, American households increasingly rely on a woman’s paycheck to make ends meet: the median contribution of a woman to her household was 35.1% of the total in 2005. Legislation to end discriminatory pay practices is necessary to ensure that aspiring middle-class and middle-class Americans do not lose wages that are necessary to afford the health insurance, college education, and everyday necessities that compose a middle-class standard of living. The Paycheck Fairness Act will allow employees to seek redress from wage discrimination more easily, while protecting them from employer retaliation. Allowing employees to seek compensatory and punitive damages provides both the best means to compensate employees who have been discriminated against and a powerful incentive for employers not to discriminate based on gender in the first place.
Finally, collecting more information from employers about wage rates will allow citizen groups, non-profit organizations, and public agencies refine statistics on the pay gap and develop more effective policies to eliminate it.
From the Experts:
“The Paycheck Fairness Act…is a major victory for women, as it is the most important piece of pay equity legislation to pass in decades…The bill…could help women make real progress toward reducing the 23 percent differential in pay between women and men. Sex-based pay discrimination means much more than 23 cents on the dollar -- it can mean hundreds of thousands of dollars over a woman's lifetime that are lost to her and her family. These lost wages can mean the family is unable to afford college tuition or health insurance, and the lowered pensions and social security payments associated with lower income can lead to poverty for elderly women who were not able to save and invest for retirement.” – Kim Gandy, President, Nation Organization for Women, 8/1/2008
“Forty-five years after passage of the Equal Pay Act, it is shocking, and totally unacceptable, that women continue to be paid substantially less than men doing the same jobs. The Paycheck Fairness Act is essential because current law is just not up to the job of eliminating the discrimination that causes this wage gap…The Supreme Court’s decision in Ledbetter v. Goodyear Tire and Rubber Co., which devastated the use of Title VII for pay discrimination claims, makes the Paycheck Fairness Act all the more necessary. Without the Act, and without a fix to the Ledbetter decision, women will have virtually no ability to effectively challenge pay discrimination.” – Marcia D. Greenberger, Co-President, National Women’s Law Center, 7/31/2008
Beyond this Bill:
Earlier this year, the Senate delivered a serious blow to wage equality when it blocked the Lily Ledbetter Fair Pay Act , which the House passed in 2007. The Act would have reversed a Supreme Court decision in Ledbetter V. Goodyear Tire & Rubber Co. that made bringing compensation discrimination claims against employers unduly difficult. The Paycheck Fairness Act strengthens employees’ claims of discriminatory wage compensation, but the Ledbetter Act is a necessary counterpart to ensure that employees are able to bring such claims into courts when they become aware of discriminatory pay.
It remains critical that the Department of Labor vigorously enforces laws protecting employees against discrimination.
Median income of a white man working a fulltime job for 50 weeks or more in 2006: $48,420
Median income of a black woman working a fulltime job for 50 weeks or more in 2006: $30,352
Median income of a Hispanic woman working a fulltime job for 50 weeks or more in 2006: $25,198
Percentage of pay gap between men and women college graduates that remains unaccounted for after all other factors are taken into account besides discrimination one year after college graduation: 5
Percentage of pay gap between men and women college graduates that remains unaccounted for after all other factors are taken into account besides discrimination ten years after graduation: 12
Percentage of median weekly wages of male physicians earned by women physicians in 2006: 72%
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