Paycheck Fairness Act Aims to Close Gender Gap with Stricter Rules, Salary History Ban

The Paycheck Fairness Act is designed to give the 60-year-old Equal Pay Act some serious teeth, aiming to close the persistent wage gap between men and women. It proposes several key changes: tightening the rules employers must follow to justify pay differences, protecting employees who discuss their salaries, banning employers from asking about your past pay, and requiring larger companies to report pay data broken down by sex, race, and ethnicity.

Stricter Standards for Justifying Pay Gaps

Think two people are doing similar work but getting paid differently? Under this Act, an employer couldn't just point to a vague 'factor other than sex.' Section 3 refines the 'bona fide factor' defense. To justify a pay gap, an employer would need to prove the factor is genuinely job-related (not based on sex), directly linked to the job requirements, and actually explains the entire pay difference. They'd also have to show there isn't an alternative practice that could achieve the same business goal without creating the pay gap. If violations are found, the bill allows for compensatory and punitive damages, going beyond just back pay, potentially meaning bigger consequences for unfair practices.

Your Paycheck: No Longer a Secret?

Ever wondered if you're paid fairly compared to colleagues but felt nervous asking? Section 3 includes anti-retaliation rules specifically protecting employees who inquire about, discuss, or disclose wages – either their own or someone else's – for the purpose of enforcing equal pay laws. Employers couldn't enforce policies or contracts demanding wage secrecy. This aims to bring pay discussions out of the shadows, making it easier to spot potential discrimination. There's a carve-out, though: if your job involves access to everyone's wage info (like HR), you can't just share it freely unless it's part of an official investigation or complaint.

Starting Fresh: Salary History Ban and Data Transparency

That awkward dance around salary expectations during interviews might change. Section 10 prohibits employers from asking job applicants about their salary history or relying on it to set pay for a new role. The idea is to stop past potentially discriminatory pay from following workers, especially women, from job to job. An applicant can voluntarily share their past salary after receiving a job offer with compensation details, specifically if they're trying to negotiate a higher starting wage. To get a bigger picture of pay practices, Section 8 mandates the Equal Employment Opportunity Commission (EEOC) collect pay data from private employers with 100+ employees. These employers would report how many employees fall into specific pay bands, broken down by job category, sex, race, and ethnicity. The EEOC plans to use this data for enforcement and publish aggregated, anonymized data to shed light on industry and regional pay gaps.

Beyond the Rules: Support and Resources

The Act isn't just about enforcement; it also includes provisions for support. Section 5 authorizes grants for negotiation skills training programs, particularly aimed at women and girls. Section 6 directs the Department of Labor to research and share ways to eliminate pay disparities. There's even a national award proposed (Section 7) to recognize employers making strides in pay equity. For smaller companies potentially worried about new rules, Section 12 mandates technical assistance materials to help them comply and clarifies exemptions aligned with the Fair Labor Standards Act.