House Passes Gender Pay Equity Bill as GOP Introduces Alternative

March 29, 2019

This week, the House passed the Paycheck Fairness Act (H.R. 7), which supporters say would bolster the success of pay discrimination lawsuits, while Rep. Elise Stefanik (R-NY) laid the groundwork for a long-term resolution of the contentious issue by introducing the WAGE Equity Act (H.R. 1935), which would, among other things, provide a safe harbor for employers that conduct self-audits to address pay disparities.

The HR Policy-opposed Paycheck Fairness Act, which passed 242 to 187 with 7 Republicans voting in favor, would:

  • Penalize legitimate, nondiscriminatory pay decisions by weakening employer defenses;

  • Expand the maze of pay history bans by making it unlawful at the federal level for employers to rely on the wage history of prospective employees when determining the wages for such prospective employees;

  • Create unlimited compensatory and punitive damages where an employee can show the employer acted with malice or reckless indifference; and

  • Require the EEOC and OFCCP to collect compensation, hiring, termination, and promotion data.

In a letter of opposition to the bill, HR Policy stressed the efforts of our members to ensure discrimination-free compensation systems and noted: 

“Our members have long recognized the fundamental role that equal pay for equal work plays in enabling their companies to attract, motivate, develop, and retain the talent they need to compete in a diverse marketplace.  Most companies have long-established nondiscriminatory pay policies and programs that are designed to achieve those objectives.  Yet, because differences in pay have many causes, employers are increasingly taking a number of steps to address the issue, including ensuring greater diversity within their management talent pipelines and in higher-paying occupations, educating managers and employees about existing pay policies, and monitoring the application of those policies through self-evaluations.  Most large employers believe their own solutions, coupled with needed changes in education and workforce development systems, hold the key to progress.”  

Rep. Stefanik's WAGE Equity Act (H.R. 1935), which has 48 cosponsors, would:

  • Add “flexible work arrangements” to the list of legitimate nondiscriminatory employer defenses for pay differences;

  • Create a self-audit safe harbor to incentivize businesses to proactively rectify pay disparities;

  • Prohibit salary history inquiries by a prospective employer while preserving an individual’s ability to voluntarily disclose prior salary history and employers’ ability to have salary expectation conversations with prospective employees; and

  • Protect the ability of employees to discuss compensation with their colleagues.

In the House debate, Rep. Stefanik noted:

“Despite [positive] economic indicators, there is some evidence that women do not receive the same level of compensation as men.  Republicans strongly support equal pay for equal work, and we owe it to women to constructively engage on this important issue and put forward solutions to strengthen existing law.  Democrats have put forth a bill that prioritizes trial attorneys and government regulation over women's economic empowerment... I encourage my colleagues to reject big government overreach and find practical bipartisan solutions that improve and strengthen the existing law of the land, equal pay for equal work.”

Outlook:  The House-passed bill is unlikely to be considered by the GOP-controlled Senate, and it is unclear whether the Stefanik measure could be the starting point for an eventual bipartisan compromise on the issue in this or a future Congress.