Obama Issues Statement Lending Support to Paycheck Fairness Act

This morning, President Barack Obama issued a statement from the White House voicing his support for — and urging Congress to move forward on — the Paycheck Fairness Act (PFA). In the statement, the President referred to the bill as a “commonsense bill” that is one of the key recommendations of the Equal Pay Enforcement Task Force.

The PFA (S. 182; H.R. 11) was initially introduced in 2008 as a companion to the Lilly Ledbetter Fair Pay Act. The bill, which passed in the U.S. House of Representatives in January 2009, has since been on hold in the Senate. The PFA would amend the Equal Pay Act of 1963 (EPA) in numerous ways, including:

• providing for compensatory and punitive damages for violations of the EPA;
• reversing the requirement that employees opt in to class-action EPA lawsuits (instead of permitting them to opt out of the suit); and
• prohibiting retaliation against employees who inquire about, discuss, or disclose wage information.

The PFA also would narrow the employer affirmative defense, which currently allows an employer to defend against a claim by showing that a pay differential was caused by “any factor other than sex.” Under the PFA, employers would be required to prove that wage disparities are based on a “bona fide factor other than sex,” such as education or experience.

Critics of the bill have expressed particular concern over the PFA’s provisions allowing prevailing plaintiffs to recover compensatory and punitive damages. Arguments against the bill also note that the lack of damage caps in the bill could leave small businesses open to potentially crippling penalties. Further, the bill’s opponents question whether the bill could have the unintended consequence of actually lessening pay for performance by forcing employers to operate their businesses more defensively and in anticipation of litigation.

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