Paycheck Fairness Act Back in Congress, Seeks to Ban Salary History

Asking job applicants how much money they earned at previous jobs is a routine, but increasingly controversial part of the hiring process; however, the Paycheck Fairness Act would eliminate the practice for large employers. The U.S. House of Representatives is expected to take up consideration of a bill that would ban employers from seeking the salary histories of prospective job candidates.

The Paycheck Fairness Act was approved by the House Education and Labor Committee on a party-line vote (27-19) on Feb. 26. The measure would hold employers accountable for discriminatory practices, end the practice of pay secrecy, ease workers’ ability to individually or jointly challenge pay discrimination, strengthen remedies for wronged employees and prohibit employers from seeking the salary history of prospective employees.

The bill would require employers to report, among other things, job salaries, promotions and dismissals to the federal government, broken down by gender and race, and requires employers to demonstrate that wage differences are based on factors other than sex. H.R. 7 also strengthens penalties for equal pay violations and authorizes additional training for U.S. Equal Employment Opportunity Commission staff to better identify and handle wage disputes.

The proposed legislation is aimed at closing the wage gap between male and female workers. Data from the U.S. Census Bureau indicates that women earned 80% of what men earned in 2018.

The proposed legislation is aimed at closing the wage gap between male and female workers. Data from the U.S. Census Bureau indicates that women earned 80% of what men earned in 2018. The figures are even worse from women of color. Asking job applicants for their salary history has long been believed to be a key factor in maintaining the long-time gender wage disparity.

There is a federal law that covers equal pay issues. The Equal Pay Act was signed into law by John F. Kennedy in 1963 and was aimed at eliminating wage disparity based on gender; but, some say it hasn’t been able to achieve its promise of closing the wage gap because of limited enforcement tools and inadequate remedies. Supporters say the Paycheck Fairness Act would make important updates to that law.

Not all employers would have to comply with the proposed law. Small businesses that are exempt from the requirements of the Fair Labor Standards Act are not covered by the measure, according to the language of the bill.

Congresswoman Rosa DeLauro (D-CT) sponsored the bill in the U.S. House.

A companion bill has been introduced in the U.S. Senate. That bill has yet to be scheduled for subcommittee or committee action. Sen. Patty Murray (D-WA) introduced the bill in the U.S. Senate.

State and local governments forbid salary history questions

While there is no nationwide salary history ban in effect, many states and localities have already outlawed pay history questions. Presently there are 13 statewide bans and 11 local bans on the books. California, Delaware, Louisiana, New Jersey, New York state, Oregon and Puerto Rico have salary history bans in place. Several local governments, including Albany County, New York City, San Francisco, New Orleans, and Pittsburgh also passed their own bans.

But, there’s been a backlash. In employer-friendly moves, Michigan and Wisconsin lawmakers recently passed laws prohibiting bans on the salary question.

Some courts have also weighed in on the issue. In April, the Ninth Circuit Court of Appeals ruled that it’s a violation of the Equal Pay Act for businesses to consider a job candidate’s past wages when putting together a salary offer.

Reporting wage data

The Paycheck Fairness Act also seeks to reinstate the collection by the U.S. Equal Employment Opportunity Commission (EEOC) of compensation data and other employment-related data, including hiring, termination, and promotion to be broken out by sex, race and national origin of employees. Businesses were successful in getting the Trump Administration to rollback a similar Obama-era rule via EEO-1 reporting.

But, this month, a federal district court reinstated the EEO-1 pay data collection requirements, ruling that the Office of Management and Budget had provided inadequate reasoning to support its decision to stay the data collection. Passage of the bill would end the court wrangling over the matter and make pay data collection a requirement under the law.

Stronger momentum

This isn’t the first go-round for the bill. It will be the third time in 11 years that the full House has voted on the measure. The proposed legislation passed the House twice—first in 2008 by a vote of 247-178 and then again in 2009 by a vote of 256-163 vote. In November 2010, the Paycheck Fairness Act went to the Senate floor and failed on cloture by 2 votes, with 58 Senators voting to pass the bill. This year’s version of the legislation has 240 cosponsors — every Democratic member of the House and one Republican member — and the Senate version has 45 cosponsors, according to DeLauro’s office.

Democrats believe they have momentum on their side with a majority in the House and support for the bill from every single Democratic lawmaker — more than they’ve before experienced. House Speaker Nancy Pelosi has indicated that passage of the bill is a high priority. But, the measure may not prevail in the Republican-controlled Senate where GOP leaders have fought the bill, saying that it is unnecessary since gender-based discrimination is already illegal and that it would hurt businesses found guilty of discrimination without setting hard caps on punitive damages.

This article is intended for informational purposes. It should not be considered or used for legal advice.