March 28, 2014
Senate Majority Leader Harry Reid has announced that the Senate will vote next week on a minimum wage increase, as the "first plank" in a "middle class fairness" agenda that will also include a vote shortly thereafter on legislation to stimulate pay discrimination litigation, on which HR Policy sent a strong letter of opposition this week to the Senate. On the so-called Paycheck Fairness Act (S. 84), the Association pointed out in its letter that existing law already provides substantial remedies for unlawful pay disparities. We further noted:
Because Reid's agenda is primarily political, the Majority Leader has thus far resisted compromise on the minimum wage being increased to $10.10, as is provided in S. 1737. However, some of his own Democrats are reportedly seeking a lower increase because of the recent Congressional Budget Office report on the negative impact on jobs.
The Paycheck Fairness Act would unfairly expose employers to unlimited liability, even when an employer acted with a reasonable belief it did not violate the law. The Paycheck Fairness Act departs from all other equal employment opportunity laws in that it would subject employers to unlimited liability under the Equal Pay Act, which would create a precedent for removing the caps under other discrimination laws, thus promoting increased litigation. For many employers, even where they are in compliance, it is far more cost effective and predictable to simply settle, rather than spend years in litigation where even a victory will not secure reimbursement for huge legal expenses.