labor lawAdivision of labor law center

The U.S. House of Representatives recently passed the Paycheck Fairness Act, an amendment to the FLSA or federal Fair Labor Standards Act.

The Paycheck Fairness Act, also known as HB 12, would amend provisions of the FLSA to revise remedies and improve enforcement efforts for preventing wage discrimination based on an employee’s gender.

This act is likely to pass the Senate and be signed into law by President Barack Obama. If it does, employers may face many more lawsuits for discrimination based on gender.

Every employer should have a clear written policy prohibiting discrimination in the workplace, including gender discrimination and wage discrimination.

The Paycheck Fairness Act was passed to provide regulator support for the Ledbetter Fair Pay Act.

The voting was largely along party lines, with many (more…)

The U.S. House of Representatives recently passed the Ledbetter Fair Pay Act. In doing so, the House Democrats acted quickly to fulfill a 2008 campaign promise.

The Ledbetter Fair Pay Act, also known as HB 11, will overturn a decision by the U.S. Supreme Court that employees have only 6 months to file a claim for pay discrimination against an employer.

The law is named after Lilly Ledbetter, an Alabama woman who was paid less than her male colleagues for the same work at Goodyear Tire and Rubber Company, for more than 20 years. The Supreme Court ruled that since Ledbetter did not file a complaint during the first 6 months she was employed, the discrimination was legal. This was true, although Ledbetter had no reason to believe for several years that she was the target of discrimination.

Votes for the Ledbetter Fair Pay Act were split according to party lines, with the overwhelming majority of Republicans voting against the bill. Republican business leaders say that the measure will increase the number of employment and pay discrimination claims against employers. They point out that even when such a claim is unfounded, it is expensive for an employer to fight the claim in court. Winning can carry a high price tag, including attorney’s fees in excess of $100,000. 

Many Democrats supported the Ledbetter Fair Pay Act. Many pointed out that the law will help eliminate discrimination in pay based on gender, race, color, national ancestry, age, etc. Proponents point out that women still earn only 78% of the wages earned by men holding the same jobs.

This law makes it even more crucial that every employer have an anti-discrimination policy and training in place. Employers should also review wages to ensure that they can be justified by objective criteria such as the employee’s qualifications and performance evaluations.

A similar bill passed the House in July 2007, but faced still opposition by Republicans in the Senate. Then-president George W. Bush also vowed to veto the bill, if it was passed by the Senate.

President Obama has said repeatedly that he supports the measures, and vowed to sign it if passed. With Democrats now holding 57 Senate seats, it seems likely that this bill will be passed and signed into law in 2009.

The AARP, formerly known as the American Association of Retired Persons supports the bill. Business groups including SHRM, the Society of Human Resource Management and the U.S. Chamber of Commerce, oppose the bill. They argue that a strict interpretation of the bill could result in companies being unable to pay different salaries based on geographical area. If an employer paid a manager in New York City more than a manager in Birmingham, Alabama for example, the employer could be sued. Because the cost of living in New York is almost twice that of Birmingham, employers have long had to pay higher salaries in such metro areas to attract equally qualified candidates in both regions.