Summary Thoughts on the Paycheck Fairness Act

The Paycheck Fairness Act has passed the House and has been introduced into the Senate.

I posted on this legislation and related topics several times last week (here, here and here); by now regular readers are probably aware of my fears that this Act will bring us more harm than good.

A few final thoughts here and then - like everyone else - I'll be waiting to see what happens as the Senate considers this potential law.

I certainly share the concerns expressed by others about the "trial attorney windfall" aspects of the Act, which include:

• The elimination of any limits on punitive and compensatory damage, without requiring any proof of intent to discriminate, and

• The fact that workers are automatically made members of a class action suit, unless they opt out.

Additionally, while the overt comparable worth provision appears to have been removed from the legislation, a lot of the language and provisions that remain (including the rather potent phrase "similarly situated employees") appear "comparable worth like" in their intent and description.  At the very least, they would give the motivated prosecutor a lot to work with.

And so I fear that the outcomes of this legislation would go beyond intentional and even inadvertent discrimination to pursue and punish employers for maintaining differences in pay that are based in market demands and business needs.

I see the Act, if passed, as having a substantial impact on the work and priorities of those of us in the reward profession.  Driving business growth and success through insightful reward design may have to take a back seat to defense.  The name of the game will be compliance, baby - recession or not.

The biggest winners will be the trial lawyers and - yes - the consultants.  Everyone else, including women, I'm not so sure.

With that, I will return you to our regularly scheduled programming...

Comments

[laurie ruettimann]

Your posts on this subject are thoughtful & crisp. I worry about government's overreach, but I also worry about inertia and inequality. I'm glad we can agree that no one wins when we tolerate discrimination. We're arguing over the fix, which is progress IMHO.

[Ann Bares]

Laurie:

I think we likely have a fair amount in common on this issue. I do believe that discrimination exists - and for that reason I agree that there is a place for dislodging the inertia in addressing it. My years in compensation work have taught me well to respect the law of unintended consequences when we tinker with rewards - and my worry about government overreach here is that we are willing to ignore all the possible unintended consequences in favor of dislodging the inertia. I also believe that a lot of the wage gap is due to non-discriminatory factors (for example, women's choice of occupations) - and if we really cared about improving women's pay lot, we would be devoting as much attention to these as we are to the pursuit and punishment of employers.

As you say so well, I think most - if not all of us - believe that wage discrimination is unacceptable, and our only disagreement is over the best fix.

Thanks for weighing in!