Equal Pay Efforts Falter at the Federal Level, Gain Traction Elsewhere

Earlier this week, Senators Patty Murray (D-WA) and Deb Fischer (R-NE) attempted to force passage of two pay-related bills. The promotion of rival legislation was likely a symbolic nod to Equal Pay Day, commemorated on April 12. While both efforts predictably failed, this does not mean the push for equal pay is a dead issue. To the contrary, recent efforts by federal agencies and state legislatures indicate this issue will remain active in the months ahead.

Federal Legislation

The two federal bills at issue were Fischer's Workplace Advancement Act, introduced in October 2015, and the Paycheck Fairness Act, last introduced in the Senate by Sen. Barbara Mikulski (D-MD) on March 25, 2015. The Workplace Advancement Act would amend the Fair Labor Standards Act by making it unlawful:

to discharge or in any other manner retaliate against any employee because such employee has inquired about, discussed, or disclosed comparative compensation information for the purpose of determining whether the employer is compensating an employee in a manner that provides equal pay for equal work, except that this paragraph shall not apply to instances in which an employee who has access to the wage information of other employees as a part of such employee’s job functions discloses the wages of such other employees to an individual who does not otherwise have access to such information . . .

The Paycheck Fairness Act would similarly make it unlawful for an employer to prevent employees from discussing or comparing salaries, but would also expand damages 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; ease the requirements for bringing a class action lawsuit under the EPA; and prohibit 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.

While neither bill is likely to be enacted this year, federal agencies and state legislatures have been more successful at advancing equal pay measures.

Equal Pay and Wage Transparency at the Local Level

Significant equal pay law overhauls, while not common, are on the rise at the state level. In October 2015, California enacted a law commonly referred to as the California Fair Pay Act, which increases wage transparency and makes it more difficult for an employer to defend against an equal pay claim. In addition to providing protections for employees who discuss their wages, the law mandates equal pay for "substantially similar work." Similar bills seeking to strengthen equal pay laws in various ways are being actively considered in a number of other jurisdictions, including Hawaii, New Jersey, Maryland and Massachusetts.

Laws that do not necessarily expand equal pay obligations, but make it unlawful for an employer to retaliate against employees for discussing wages, have been more successful. In the past year alone, Connecticut, New York, Oregon, and the District of Columbia enacted laws providing varying degrees of wage disclosure protections. Minnesota, New Hampshire, and New Jersey implemented similar laws in recent years. Since January 2016, wage transparency bills have been introduced in Arizona, Hawaii, Louisiana, Oklahoma, Tennessee, Utah, and West Virginia. Expect this trend to continue, as state legislators are more apt to pass such "equal pay lite" bills over more comprehensive "comparable worth" pay statutes.

Other Federal-Level Efforts

While federal pay laws are not likely to advance this year, federal agencies have been able to implement equal pay policies through other means.

In 2015, the Office of Federal Contract Compliance Programs (OFCCP) published the final rule implementing Executive Order 13665 – Prohibitions Against Pay Secrecy Policies and Actions. That order, issued in April 2014, amended Executive Order 11246 to bar federal contractors and subcontractors from retaliating or discriminating against an employee or applicant for inquiring about, discussing, or disclosing his or her own compensation, or the compensation of any other employee or applicant. This final rule applies to federal contracts or subcontracts over $10,000 entered into or modified after January 11, 2016.

In addition, in January of this year, the Equal Employment Opportunity Commission announced its intent to amend the current, demographic-related EEO-1 data collection requirements to include pay information for large employers. Under the proposal, starting in 2017, employers with 100 or more employees (both private companies and federal contractors) would be required to submit information on their employees' pay and hours worked as part of the EEO-1 data collection process. Each job category would contain 12 pay bands, and employers would use employees' W-2 earnings to report the number of employees who fell within each pay band by job category. It is believed this information would be used in future EPA claims.

The bottom line is that while federal equal pay law is not likely to change anytime soon, employers need to be aware of other efforts at the federal agency and state levels. 

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.