The Paycheck Fairness Act: The Heritage Foundation 2009 Labor Boot Camp
What Is the Paycheck Fairness Act
- Under the current Equal Pay Act, once employees have provided
prima facie evidence of sex discrimination, the burden of proof
shifts to the employer to show that the difference in wages results
from "any factor other than sex."
- The PFA eliminates the "any factor other than sex" defense and
replaces it with a "bona fide factor other than sex" defense.
Employers can only use this "bona fide factor" defense if they
demonstrate that business necessity demands it.
- Such defense shall not apply where the employee demonstrates
that an alternative employment practice exists that would serve the
same business purpose without producing such differential and that
the employer has refused to adopt such alternative practice.
- The PFA makes employers liable for unlimited punitive damages
in addition to compensatory damages in cases of sex
- The PFA makes it easier to bring class action lawsuits in such
- Now employers must justify their pay practices with a "bona
fide" factor other than sex that they must potentially defend in
the courts. If employees can find an alternative business practice
that does not result in a pay disparity, employers must adopt it.
Under the PFA, government and the courts dictate business practices
- The PFA removes the Equal Pay Act's limits on punitive and
- It specifies that workers are automatically members of a class
action suit unless they opt out.
- Section 9 of the PFA instructs the Office of Federal Contract
Compliance Programs (OFCCP) to reinstitute the Equal Opportunity
Survey and use the survey to identify federal contractors for
- The Department of Labor discontinued this survey after
concluding that it was essentially worthless in identifying sexual
discrimination. A detailed study found the EOS had a 93 percent
false-positive rate and a 33 percent false-negative rate. Most
companies identified as discriminating did not, while a third of
companies discriminating were missed by the survey. The EOS did
little better than random chance at identifying
- In addition to requiring the OFCCP to use a flawed survey, the
PFA prevents the OFCCP from using the best science available in
- Under the PSA, the government will inject itself into areas of
business over which it has no experience. For instance:
- Does experience constitute a "bona fide factor other than
- A woman earning less than a man with more experience could
argue that her employer should be required to send her to training
and then pay them identical wages. She would have a strong case to
argue that experience was not a "bona fide" factor because an
alternative employment practice would eliminate the disparity.
- Potential investors would likely be deterred by such increased
costs and government interference.
- The PSA gives a windfall to trial lawyers, exposing employers
to unlimited punitive damages.
- The PFA will encourage trial lawyers to initiate many frivolous
class-action suits in hopes of winning a few large judgments.
- Any financial benefits reaped by trial lawyers, however, will
come at the expense of workers. Employers would protect themselves
by purchasing legal liability insurance, which would be partly paid
for by reducing workers wages. The PFA will hurt the very workers
it is meant to help.
- The PFA means millions of dollars for trial lawyers but lower
wages and fewer jobs for most Americans.
James Sherk is Bradley
Fellow in Labor Policy in the Center for Data Analysis at The