Reintroducing The Paycheck Fairness Act

On January 28, 2021, Rep. Rosa DeLauro (D-CT) formally reintroduced the Paycheck Fairness Act (H.R. 7) in the new Congress. This bill is expected to easily pass the House of Representatives, but its fate in the Senate is less than certain at this time.

As background, the Equal Pay Act of 1963 essentially prohibits employers from paying similarly situated female and male employees different wage rates unless the employer can establish that the pay differential is pursuant to: “(i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.” This fourth exception, also known the “catch-all” defense, has been broadly applied by courts to allow pay differentials under a variety of circumstances.

The Paycheck Fairness Act, if passed by both houses of Congress and signed into law, would eliminate the “catch-all” defense and instead replace it with a “bona fide factor defense.” An employer seeking to defend a pay differential between male and female employees would need to show “a bona fide factor other than sex, such as education, training, or experience.” The bona fide factor defense would only be available if the employer “demonstrates that such factor (i) is not based upon or derived from a sex-based differential in compensation; (ii) is job-related with respect to the position in question; (iii) is consistent with business necessity; and (iv) accounts for the entire differential in compensation at issue.” Furthermore, the bona fide factor defense would not be available “where the employee demonstrates that an alternative employment practice exists that would serve the same business purpose without producing such differential and that the employer has refused to adopt such alternative practice.”

The Paycheck Fairness Act would also, among other things, enhance penalties and retaliation provisions in the Equal Pay Act.

Prior versions of the Paycheck Fairness Act have been introduced in every Congress since 1997. In the last Congress, the House of Representatives passed a nearly identical version of this bill on a vote of 242-187. The bill’s passage in the current House is almost certainly assured because it is co-sponsored by every member of the Democratic majority and two Republicans. However, there remains much uncertainty on what will happen in the Senate. While it is likely that Democrats, who are now in control of the Senate, will advance the bill to the floor, it is not known at this time whether ten or more Republicans will vote to close debate and end a likely filibuster.

The Paycheck Fairness Act has been referred to the House Committee on Education and Labor. Stay tuned for important updates about this bill.