Obama to back 2 new Fair Pay laws
January 13, 2009 by Sam NarisiPosted in: Discrimination, Special Report
Some members of Congress are already following through on one of last year’s campaign promises: making it easier to sue employers for pay discrimination.
On January 9, the House of Representatives passed two bills to fight pay bias: the Ledbetter Fair Pay Act and the Paycheck Fairness Act.
Both bills were introduced last year but met resistance from Congressional Republicans and a veto threat from President Bush. President-elect Barack Obama, on the other hand, supports both measures.
Ledbetter Fair Pay Act
The Ledbetter Act would overturn a controversial Supreme Court decision from 2007. Lilly Ledbetter sued her employer, Goodyear Tire and Rubber, after learning she’d been paid less than males working in the same job.
The Court decided against her, because she missed out on the statute of limitations. The Court ruled she had to file her case within 180 days after the discriminatory decision was made — in this case, when she was hired 20 years ago.
The Ledbetter Act would give employees a new 180-day window to sue every time they get paid.
Paycheck Fairness Act
The PFA would eliminate many of the defenses employers now have when employees make pay bias claims. The biggest changes HR needs to watch for:
- Previous jobs don’t matter – Right now, companies can be off the hook for paying a man more than a woman if they show he earned more at a previous job so he was able to negotiate for a higher salary. But the PFA would only allow differences based on job-related factors, such as performance, responsibility, training, education or experience.
- No geographical differences – Under the Equal Pay Act, it’s acceptable for employees at different locations to be paid differently to account for local market conditions. But under the new law, employees would be able to sue based on a comparison with a co-worker located anywhere in the country.
- No more confidential salary info – Right now, companies can classify some salary data as confidential and discipline employees for disclosing it. Under the new law, that would be considered unlawful retaliation.
- Punitive damages – In addition to liability for back pay, companies that violate the Paycheck Fairness Act could be hit with punitive damages.
What’s next?
The bills will likely be voted on by the Senate next week, where experts say they have a good shot of passing with the increased Democratic majority. We’ll keep you posted.
Tags: Congress, Ledbetter Fair Pay Act, pay discrimination, Paycheck Fairness Act
January 14th, 2009 at 11:06 am
The article says, “Previous jobs don’t matter – Right now, companies can be off the hook for paying a man more than a woman if they show he earned more at a previous job so he was able to negotiate for a higher salary. But the PFA would only allow differences based on job-related factors, such as performance, responsibility, training, education or experience.”
I find this a little confusing. Last things first: What is the difference between training, education or experience? Is there a ‘legal’ distinction between them or only the ‘English’ definition which applies to those words here?
If ‘experience’ is a criterion to be considered (i.e. matters) then the phrase ‘Previous Jobs Don’t Matter’ seems to conflict with the value placed on experience elsewhere.
TIA
January 14th, 2009 at 11:32 am
These are potentially great changes but I forsee a lot of abuse. I would like them to review issues such as companies retaliating on employees that resign or quit. I have seen and worked with several companies that will reduce the employees pay to minimum wage for hours already worked if the employees to not physically work out their notice and usually they are requiring a four week notice on hourly positions in order to ensure that they get to doc a persons pay. That is, in my opinion very unprofessional and unethical to reduce a persons pay for hours that they have already worked.
January 14th, 2009 at 11:46 am
If the PFA goes into law, I would like to work in Podunk and make the same salary as someone working in San Francisco or NYC. That would really improve my standard of living. How wonderful for me and my neighbor Podunkians.
On the other hand, wouldn’t you hate to be in NYC and have your salary adjusted down to the going pay rates in Podunk?
This just doesn’t seem reasonable. I hope this inequity is remedied before this law passes.
January 14th, 2009 at 11:50 am
The Federal Goverment currently has cost of living differences for federal positions. Similar to their use of comp time, legally, what is good for the goose isn’t good for the gander. Private employers are held to a higher standard.
January 14th, 2009 at 11:56 am
question, does this also work with education? So what is the pay for someone who has a PhD with dual MA’s and 30 years of manufacturing experience. From what I hear, it’s a little ligher than the 45k that I am getting in Iowa even in these slow times.
January 14th, 2009 at 12:00 pm
Captain Nice:
Sorry for the confusion. What this means is you can consider the types of jobs employees have had in the past – but you can’t just use the fact that someone was paid more previously as a justification for giving him or her a higher salary than members of another class.
So say a man and a woman have similar backgrounds, but the man was paid more for the same experience. Under the PFA, that might not be enough of a reason to pay him more than the woman.
The reason, I believe, is that Congress companies are legally continuing the discrimination other employers have carried out in the past.
Sam Narisi
Editor
HRLegalNews.com
January 14th, 2009 at 12:13 pm
Sam Narisi,
Thanks for the explanation.
BTW Do you know the answer to my second question? ‘What is the difference between training, education or experience? Is there a ‘legal’ distinction between them or only the ‘English’ definition which applies to those words here?’
I’m not proud I’ll take the answer from anyone.
January 14th, 2009 at 12:37 pm
If Obama and his fellow democrats have their way, America will become another third world country. Do everything possible to shut down business – make it impossible to make a profit. Then the Islamic nations can come in and take over.
Equal pay for equal work is fine, but how do you describe equal? Any job is only worth what the company can afford to pay, or the job goes away, or it goes to someone who agrees to do it for what the company agrees to pay.
January 14th, 2009 at 12:55 pm
I can deal with three of the 4 points but that geographical one just ins not right. Watch jobs flock to “Podunk” USA.
January 14th, 2009 at 1:25 pm
The geographic piece does not make any cents at all. Clearly there is a lot that goes into determining appropriate compensation packages, one major factor has and always will be the cost of living in the labor market. I hope there is consideration for change.
January 14th, 2009 at 1:27 pm
Yippee for me!!! I live in Podunk!
January 14th, 2009 at 1:55 pm
My employees in South Dakota are thrilled. Wage hikes for them all. Considering the minimum wage there is nearly $2 lower than it is in Washington state where the parent company and other plant resides, they all get raises! Wahoo. The upshot of it? Likely Podunkville is going to be a ghost town when the main business in town has to bring wages up to the geographical equivalent of their sister plants in California, and we can no longer sustain profitable business there. Good luck Podunkville’s everywhere… I expect the economy to be the least of your worries now.
January 14th, 2009 at 2:13 pm
Thank You Jennifer –
The old do what i say not what i do…
January 14th, 2009 at 2:17 pm
I agree with a lot of Obama’s future plans but the geographical one seems odd. Regardless of the size of the town or city, you can’t even compare the cost of living in major geographical sections like the Midwest vs. East Coast or the East Coast vs. West Coast. It’s crazy. A $70,000/year salary is pretty good here in the Midwest but in San Diego, San Francisco or New York City where housing costs alone can be double what they are here, it’s not much.
The “Previous Jobs Don’t Matter” section completely confuses me so I won’t even comment.
I like the punitive damages section and I am on the fence with the “No More Confidential Salary Info” portion.
I guess I am 50/50 with the Paycheck Fairness Act and I fully support the Ledbetter Fair Pay Act. To give someone 180-days when they may have not known about it for 5, 10 or even 20 years is ridiculous. If a company fails to pay fairly they should have to compensate…period.
January 14th, 2009 at 2:31 pm
To Captain Nice: I’m surprised you even have to ask the question but since you seem to really need to know the difference here goes: Mostly there is not much difference between training and education or training and experience, depending where the training came from – an educational institute or on the job. It is possible to have been trained at your place of work to do a particular job that you do not normally perform (except maybe in case of an illness or absence) i.e., an HR Administrator performing A/R or A/C functions. It would count as training, but if you have not actually had to perform the function, it’s not really experience nor could you put it down in the education section of your resume.
I should hope you know the difference between education and experience, even a “legal” definition! Education = diploma and/or degrees, no experience necessary. Experience = length of time on a job or in a field of work, education may not be necessary.
January 14th, 2009 at 2:36 pm
The geographic discussion reminded me of my favorite gloom and doom observation. If a welder is worth $20 per hour an HR person $7.75 and a person with a masters degree (brain surgeon) gets $500 here in the US are they worth more than their counter parts in the third world? As I remember it some 30 years ago the Minister of Finance from some Asian country (Singapore?) said, “For all the workers of the world to be paid at parity one of two things must happen. Either wages in Africa, South American, India, and China etc need to be raise to those in North America, Europe, Taiwan, Japan, and S. Korea. Or the wages in North America, Europe, Taiwan, Japan, and S. Korea need to be adjusted to the same level as Africa, South American, India, and China.”
The problem as I see it as multinational corporations have no motivation to raise the wages of the welder in Indonesia but they do have a motivation to reduce the welder’s wages in New Hampshire. I live in NH and I could live on $1000 per year IF my costs would drop so that for example my property taxes alone weren’t more than three times that amount.
Part of the problem with all the moves being made at the Federal and in many states is to maintain our disproportionate (with respect to the rest of the world) wage structure. The housing bubble raise housing prices way out of line with their value. The housing bail out is trying to sustain those artificially high levels and pay for them at interest. The Wall Street bailout comes on the heels of several Wall Street bubbles and again the move is to keep the inflated equities markets at the bubble level rather than the ‘real’ level.
IMHO
January 14th, 2009 at 2:39 pm
To Susan: I don’t normally believe in arguing with folks who are giving an opinion but considering you aren’t giving Captain Nice an “Opinion”…I had to say something. Does the fine print of this new law DEFINE education? Because I don’t see where, in any dictionary, it defines “Eductation” as something that specifically comes with a degree or diploma. Educated can also be defined as “Taught”…and if I was “taught” A/P…could I have also been educated in it as well? Maybe we should wait to see how our government defines these issues before we start EDUCATING others on the definition of EDUCATION.
January 14th, 2009 at 3:14 pm
To All: Sorry, I assumed education in this context meant formal education since training and experience was also included.
January 14th, 2009 at 3:15 pm
Susan, I make a distinction between Schooling and Education. I have taken courses a Harvard day and evening school, MIT. U of Maine, and Northeastern, but I never got a degree. Unless you count a PhD from the Universal Life Church.
About 30 years ago I was teaching a graduate level course to professional engineers and one of the students asked my teaching partner about our credentials. Specifically he wondered if I had a PhD. My friend replied, “He is unschooled but not uneducated.”
January 14th, 2009 at 3:17 pm
does this act also include age discrimination as opposed to just gender discrimination?
January 14th, 2009 at 3:26 pm
The existing laws already cover age and gender discrimination. Obama’s new proposal includes sexual orientation (protecting gays and lesbians), but those proposals are not the ones discussed in this story.
January 14th, 2009 at 3:27 pm
Captain Nice – very well said.
January 14th, 2009 at 4:09 pm
I am confused on the “No more confidential salary info”. Does this mean that the Company President’s salary should be public information?
January 14th, 2009 at 4:17 pm
It is laws like this that will cripple small business. You pay a person for what you can afford and for what you think said person is worth. Male/female/black/white, it doesn’t matter. If an employee thinks they are being underpaid, then it is their right to find a job elsewhere. I shouldn’t have to be told to how much to pay an employee. It is my business and I will run it in a manner in which I think I can make enough money to keep the doors open. If enough employees complain and ObamaLaw wants to bail them out, then he can hire them while I close the doors. Who wins then? This is BS, IMO.
January 14th, 2009 at 5:25 pm
If I get depressed over these Acts, can I be considered disabled under the ADA amendments act?
January 15th, 2009 at 1:53 pm
To Zanne: Touche’! You get the best and last laugh of them all!
January 15th, 2009 at 2:50 pm
Zanne – Now that you mention it, if you tell your supervisor you are feeling depressed, then that is an IMPLIED mental disability…so yes, congratulations, you are now considered disabled and protected under the ADA!!!!
January 16th, 2009 at 12:24 pm
Another point to consider is that, unless they amended the legislation since last week, the Ledbetter Fair Pay Act isn’t just about the statute of limitations. It also contains the following verbage (paraphrased below from the SHRM website) which would seem to allow any “affected person” – not simply the employee – to file suit. The employee wouldn’t necessarily even have to know of or approve of the suit for it to move forward. So, as I read it, if I believe that my spouse is being underpaid, it would allow me to file suit on my spouse’s behalf even if he didn’t want me to. Who comes up with this stuff?!? They’ve taken legislation that may not be bad in and of itself and tacked items on to it that make it simply ridiculous.
“The bill would significantly expand the plaintiff filed in current law by allowing, not just an “aggrieved person,” but other individuals who were “affected” by an act of pay discrimination to file claims. The legislation may allow family members, including spouses and children, and potentially others to become plaintiffs in discrimination suits over a worker’s pay—even after the worker was deceased.”
January 16th, 2009 at 12:46 pm
Oh I get it….let’s abandon the concept of free market entirely….socialism anyone?
January 19th, 2009 at 1:49 pm
I think if I hear/see the word “socialism” anymore I might lose my lunch. Unless you are going to go single-handedly change some federal laws, suck it up, deal with it, do the extra work and quit making yourselves miserable over it. Here’s an age-old remedy for serenity, I’ll leave out any politically incorrect words here but tell me if you’ve heard this one, “…grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.”