How would a law that makes employers afraid to give raises benefit women?!
Yet many senators appear to believe it would. They have announced their support for the Paycheck Fairness Act (PFA), which is currently being debated in the Senate and could be up for a vote as soon as this week.
This law would make almost any difference in pay between employees grounds for a lawsuit. If it passes, businesses could be in legal jeopardy for giving raises and bonuses.
Supporters intend the Paycheck Fairness Act to combat sex discrimination. Certainly sex discrimination is wrong. Women and men doing equal work deserve receive equal pay. Both Title VII of the 1964 Civil Rights Act and the Equal Pay Act of 1963 prohibit doing otherwise. Paying employees differently because of their sex violates the law.
If this passes, businesses could be in legal jeopardy for giving raises and bonuses.
The Paycheck Fairness Act isn’t necessary to combat sex discrimination – and it would potentially put employers at risk for decisions, totally unrelated to gender, to pay different employees different salaries.
For instance, companies can pay highly educated workers more than less educated ones. They can pay experienced employees more as well. Most employers reward good performance with higher wages. Such pay systems do not violate the law. Under the Paycheck Fairness Act they could.
Among other problematic provisions, the PFA prohibits pay differences between men and women except on the basis of “a bona fide factor other than sex, such as education, training, or experience … job-related with respect to the position” and “consistent with business necessity.” Further the PFA states:
“Such defense shall not apply 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.”
Or to translate that into regular, not legal, English, the law would essentially not count factors like education, performance, or experience, as valid reasons for some to be paid more than others unless employers showed they absolutely had to structure their business that way.
The Paycheck Fairness Act’s language would make almost any pay system with differences between workers grounds for a lawsuit.
Consider a company with many male employees that pays experienced workers more than new hires. If they hired a woman, the PFA would let her sue over her lower pay. The company would have to prove that “business necessity” required premium pay for experienced workers. If the company won the suit she could then propose “an alternative employment practice”— intensive training to get caught up to the senior workers, followed by equal pay scales. If the company refused she could sue again. The employer would have to prove in court the employee’s proposal did not “serve the same business purpose” as paying senior workers more.
Performance-based raises would similarly justify lawsuits. Lawyers could easily argue businesses necessity does not require them—most unionized companies ignore individual performance. Similarly with higher pay for more educated workers. Unless their degree is “job-related with respect to the position” companies would have difficulty justifying paying history majors more than high school graduates.
Ultimately, the Paycheck Fairness Act’s language would make almost any pay system with differences between workers grounds for a lawsuit. Sheer chance assures such pay systems will sometimes result in women earning more than men. Men will sometimes earn more than women. In either case lawyers could sue.
The PFA deepens these problems by encouraging frivolous lawsuits. The Act eliminates the $300,000 cap on damages in sex-discrimination cases. This would encourage lawyers to file dozens of tenuous cases, hoping juries would give them multi-million dollar judgments in a few. Even successful businesses would face six-figure legal bills.
The Paycheck Fairness Act would strongly pressure companies to adopt uniform pay scales. They would have to avoid raises and bonuses; those could lead to lawsuits. Experienced workers would make less. So would high performers and more educated workers. The Paycheck Fairness Act would level pay down. Discouraging employers from raising pay would hurt both men and women.
