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President Obama Poised to Enact Provisions of Paycheck Fairness Act Through Executive Action

Because the House of Representatives is not expected to consider the Paycheck Fairness Act (S. 2199) this term, President Obama will reportedly implement provisions of this measure applicable to federal contractors via Executive actions on Tuesday.  The move will coincide with Equal Pay Day, and is the latest in a series of recent Presidential actions designed to implement employment law reform by bypassing Congress.  

While details are scant at this point, according to Politico, the President is expected to sign an Executive Order (E.O.) making it unlawful for a federal contractor to prohibit or retaliate against an employee for disclosing his or her salary information.  Senators Dean Heller (R-NV) and Lisa Murkowski (R-AK) recently introduced the End Pay Discrimination Through Information Act (S. 2172), a bill that would achieve the same end.  Specifically, this bill – which is an extremely scaled-back version of the Paycheck Fairness Act – would expressly prohibit retaliation against an employee who “has inquired about, discussed, or disclosed the wages of the employee or another employee.”  

Politico also reports that the President will issue a memorandum directing the Department of Labor to draft regulations requiring federal contractors to comply with new compensation and sex-related reporting requirements.  For years, the DOL’s Office of Federal Contract Compliance Programs (OFCCP) has been developing a new compensation data collection tool that would identify contractors likely to engage in sex- and race-based compensation discrimination, although the issuance date of this tool has been continually pushed back.  A Presidential directive requiring new compensation reporting requirements could expedite its unveiling. 

Both anticipated Executive actions would also occur when the Senate is slated to vote on the revived Paycheck Fairness Act.  Among other changes, this legislation would expand damages available under the Equal Pay Act (EPA) to include potentially unlimited compensatory and punitive awards for wage discrimination, weaken an employer’s ability to raise the “factor other than sex” affirmative defense in a wage discrimination case, make it unlawful for an employer to prevent employees from discussing or comparing salaries, and facilitate equal pay-based class action lawsuits.  While this measure has populist appeal, several concerns regarding the bill were raised during a Senate Committee on Health, Education, Labor and Pensions (HELP) hearing held last week. Among the criticisms of this bill were that it would lead to increased and protracted litigation, and limit an employer’s ability to base compensation decisions on common nondiscriminatory factors, such as prior pay or experience.   

The bill is not expected to receive the 60 votes necessary to advance in the Senate. Even if the Paycheck Fairness Act clears the Senate, its chances in the House are virtually nonexistent.  The impending Presidential actions, therefore, are a way to keep the “Opportunity for All” issue alive through the November elections.  As noted, the President recently issued an E.O. raising the federal contractor minimum wage, and a memorandum directing the DOL to revise overtime exemption regulations for white collar employees. Many have called upon the President to similarly issue an E.O. preventing federal contractor discrimination against gays and lesbians.  

Whether the equal pay E.O. and/or memorandum call for significant change or are merely symbolic gestures remains to be seen on Tuesday.

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