Paycheck Fairness Act Bans Salary History Questions, Expands Equal Pay Protection to LGBTQ+ Workers

The Paycheck Fairness Act is a major overhaul of the Fair Labor Standards Act (FLSA) designed to close the wage gap and significantly ramp up enforcement against sex-based pay discrimination. If you’re a job seeker, an employee who suspects you’re underpaid, or an HR professional, this bill is going to change how you negotiate, how your company hires, and how much risk your employer carries for unequal pay.

The End of the Salary History Question

For many people, the biggest, most immediate change is the death of the ‘What did you make at your last job?’ question (Section 9). This bill makes it illegal for employers to ask job applicants about their past salary or benefits history, or to use that history to decide if you qualify for a job or what to pay you. This is huge, especially for women and minorities who often carry lower pay from one job to the next, perpetuating the pay gap across their careers.

There’s a small, practical exception: an employer can confirm your past wages if you voluntarily offer that information after they’ve already offered you the job and a specific salary, and only if you’re using that information to argue for a higher starting wage. If an employer violates this ban, they face civil penalties starting at $5,000 for a first offense, plus liability for damages up to $10,000 to the affected applicant.

Expanding Who’s Protected and How

This Act significantly broadens the definition of "sex" under equal pay law (Section 2). It now explicitly includes pregnancy, childbirth, sexual orientation, and gender identity. This means that if you are facing a pay disparity because you are pregnant or because of your sexual orientation or gender identity, you now have clear legal protection under federal equal pay laws.

Furthermore, the bill strengthens protections for employees who talk about their pay. It explicitly bans "wage gag" contracts and protects you from retaliation if you inquire about, discuss, or share your own wages or the wages of coworkers (Section 2). This gives employees the freedom to compare notes at the water cooler without fear of being disciplined, which is often the first step in spotting a pay problem.

Making It Harder to Justify Pay Gaps

Currently, if an employer pays different wages for the same work, they can use the “bona fide factor defense” to justify it—saying the difference is due to training, education, or experience, not sex. This bill tightens that defense dramatically (Section 2).

Under this new standard, the employer must prove four things: that the factor (1) isn’t based on or derived from a sex-based pay difference; (2) is directly related to the job; (3) is necessary for the business; and (4) explains the entire pay gap. If an employee can show there was a less discriminatory way to meet the business need, the defense fails. For employers, this raises the bar significantly; you can no longer use vague reasons to explain away pay disparities.

New Data Collection and Enforcement

To ensure these rules are followed, the Equal Employment Opportunity Commission (EEOC) must start collecting detailed pay data annually from all private employers with 100 or more employees (Section 7). This data must be broken down by sex, race, and national origin, using compensation ranges and hours worked. The goal is to give the EEOC the tools to spot systemic pay discrimination and focus their enforcement efforts.

This data collection requirement will mean a new compliance step for large employers, and the EEOC must release this aggregated data publicly every 18 months, broken down by industry and location. This increased transparency will likely put pressure on companies that are lagging behind in pay equity.

Finally, the Act establishes a National Equal Pay Enforcement Task Force and authorizes compensatory and punitive damages for pay equity and retaliation violations (Section 10, Section 2). This means that if an employer is found to have acted with malice or reckless indifference, the financial penalties could be substantial, moving pay equity violations from a cost of doing business to a serious liability.