March 23, 2021
Wednesday marks Equal Pay Day — the day on which women’s average 2020 pay catches up with what men made last year. With a worker-friendly administration in the White House and many states taking matters into their own hands, here’s an overview of what employers should expect on the pay equity front in 2021.
One measure to watch is the newly reintroduced Paycheck Fairness Act — a version of which, according to one of its sponsors, was first floated in Congress in 1997. The PFA would amend the Equal Pay Act of 1963 in part by narrowing employers’ defenses to existing pay gaps. It would also institute bans on asking for an employee’s salary history and on punishing workers who discuss pay.
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The Paycheck Fairness Act
Many experts have in their sights the provision in the Paycheck Fairness Act that would narrow the “other than sex” employer defense in the Equal Pay Act by requiring employers to give a concrete reason why a female employee was paid less than a man in a similar position, for example, “education, training or experience.”
At a congressional hearing on the Paycheck Fairness Act and other civil rights bills last week, Fatima Goss Graves, CEO and president of the National Women’s Law Center, called the current defense a loophole.
“The ‘factor other than sex’ continues to be such a large loophole it swallows the whole requirement that you pay people equal wages for doing equal jobs,” she said.
Currently under the Equal Pay Act, employers can often use the “other than sex” defense to cite a woman’s previous salary as the reason for a pay discrepancy at their organization, said Christine Webber, a worker-side partner in the civil rights and employment practice group at Cohen Milstein Sellers & Toll PLLC. Advocates like Goss Graves say that can perpetuate a wage gap throughout a woman’s entire career.
Webber said it’s important that employers be prohibited from taking someone’s previous salary into consideration at all. But in some states that have barred employers from asking for salary history, employees can still volunteer the information and their employers can use it, she said.
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The Paycheck Fairness Act also would allow employees to pursue class actions instead of collective actions, Gagnon added — in other words, workers could be automatically included in a lawsuit class unless they opted out, rather than be required to affirmatively opt in.
Webber meanwhile said some would-be plaintiffs fear retaliation from their employers if they opt into a pay bias suit, and that defense attorneys might be over-exaggerating the danger of class actions.
“It is not easy to get a class certified,” Webber said. She pointed to the famous Dukes v. Walmart pay bias case, which she worked on “from pretty much the beginning.”
In that case, the U.S. Supreme Court ruled 5-4 that the plaintiffs, female employees alleging they were paid less than their male counterparts and had fewer opportunities for promotions, hadn’t met the standards for class certification.
“I think employers tend to go sort of Chicken Little and assume that every equal pay claim is going to, you know, slap on a Rule 23 class action claim to go with it, and then their sky will be falling,” Webber said. “And I think that’s unlikely.”
A version of the Paycheck Fairness Act passed the House in 2019, 242-187. It’s likely to pass the House again, experts predicted, and has the support of President Joe Biden.
Cohen Milstein’s Webber said she thought that if the bill got to a vote in the Senate, it would pass, but noted that’s an open question given the existence of the filibuster.
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The Racial Pay Gap
Wednesday’s Equal Pay Day date is a general marker, denoting the day when the pay of all U.S. women averaged together catches up with the pay of all men averaged together. For women of color, the disparity is even more stark: Equal Pay Day for Latina women, who earn just 55 cents for every dollar a white man earns, is not until Oct. 21, according to nonprofit group Equal Rights Advocates.
Worker-side attorney Webber said that while she thinks the Paycheck Fairness Act is “a great improvement that should be adopted,” if she could, she would amend it to include protections for race, noting that California recently did so.
Changes to the Golden State’s Equal Pay Act effective in 2017 barred employers from paying someone less than a co-worker who does “substantially similar work” because of gender, race or ethnicity.
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The EEOC briefly collected race- and gender-based pay data from employers, but the utility of that information is currently the subject of a study from the National Academies of Sciences, Engineering and Medicine.
Webber called for making claims more attainable to plaintiffs, as well as race-based protections.
“It just is another tool in the toolbox,” she said of race protections. Women of color can mention white male “comparators” — workers in similar positions who were paid more — and an employer would not be able to say that the gap was because of race or gender, Webber noted.
But under the current system, a Black man couldn’t make the same claim under the Equal Pay Act, Webber explained — he would have to rely on another civil rights law such as Title VII of the Civil Rights Act of 1964 or Section 1981 of the Civil Rights Act of 1866, which require different burdens of proof.