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Tuesday, October 5, 2010

Pay Equity Legislation

Jody Feder
Legislative Attorney

Linda Levine
Specialist in Labor Economics

The term “pay equity” originates from the fact that women as a group are paid less than men. In recent years, for example, women with a strong commitment to the workforce earned about 77 to 80 cents for every dollar earned by men. As women’s earnings as a percentage of men’s earnings have narrowed by less than 20 percentage points over the past 40-plus years, some members of the public policy community have argued that current anti-discrimination laws should be strengthened and that additional measures should be enacted. Others, in contrast, believe that further government intervention is unnecessary because the gender wage gap will narrow on its own as women’s labor market qualifications continue to more closely resemble those of men.

The Equal Pay Act (EPA), which amends the Fair Labor Standards Act (FLSA), prohibits covered employers from paying lower wages to female employees than male employees for “equal work” on jobs requiring “equal skill, effort, and responsibility” and performed “under similar working conditions” at the same location. The FLSA exempts some jobs (e.g., hotel service workers) from EPA coverage, and the EPA makes exceptions for wage differentials based on merit or seniority systems, systems that measure earnings by “quality or quantity” of production, or “any factor other than sex.” The “equal work” standard embodies a middle ground between demanding that two jobs either be exactly alike or that they merely be comparable. The test applied by the courts focuses on job similarity and whether, given all the circumstances, they require substantially the same skill, effort, and responsibility. The EPA may be enforced by the government, or individual complainants, in civil actions for wages unlawfully withheld and liquidated damages for willful violations. In addition, Title VII of the 1964 Civil Rights Act provides for the awarding of compensatory and punitive damages to victims of “intentional” wage discrimination, subject to caps on the employer’s monetary liability.

The issue of pay equity has attracted substantial attention in recent Congresses. A number of measures, including bills that would provide additional remedies, mandate “equal pay for equivalent jobs,” or require studies on pay inequity, have been introduced in each of the last several congressional sessions. In the 111
th Congress, similar legislation has been introduced, including the Paycheck Fairness Act (H.R. 12/S. 182/S. 3772), the Fair Pay Act (H.R. 2151/S. 904), and the Title VII Fairness Act (S. 166). In addition, on January 29, 2009, President Obama signed the Lilly Ledbetter Fair Pay Act of 2009 (H.R. 11/S. 181). This legislation supersedes the 2007 Supreme Court decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., by amending Title VII to clarify that the time limit for suing employers for pay discrimination begins each time they issue a paycheck. Although the House of Representatives passed both the Ledbetter legislation and the Paycheck Fairness Act as a combined package, the Senate did not combine the two bills and has not yet taken up the latter for a vote. Recently, however, Senator Reid reintroduced the Paycheck Fairness Act as S. 3772, and the bill has been placed on the Senate calendar.

Date of Report: September 20, 2010
Number of Pages: 13
Order Number: RL31867
Price: $29.95

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