On Wednesday November 17, 2010, the Paycheck Fairness Act (reintroduced in the Senate in September as S. 3772, formerly S. 182) failed to secure the necessary 60 Senate votes to close debate and move the legislation forward. The 58-41 vote was predominately along party lines, with all Senate Republicans present plus one Democrat voting against advancing the measure. Three women Republican Senators whose votes were closely watched (Susan Collins and Olympia Snowe of Maine and Kay Bailey Hutchinson of Texas), all of whom voted in favor of the Lily Ledbetter Fair Pay Act, voted against the Paycheck Fairness Act, citing the proposed law’s potential for increased litigation and negative impacts on small business, job creation and confidentiality of compensation information. President Obama and Department of Labor Secretary Hilda Solis both expressed disappointment in the vote and vowed to continue the Administration’s equal pay enforcement efforts.

Key provisions of the legislation would have (1) required the Equal Employment Opportunity Commission to collect compensation data, (2) protected employees who requested compensation data from retaliation, (3) replaced the current Equal Pay Act’s system of opt-in class actions with opt-out classes (more popular with plaintiffs’ attorneys) (4) restricted employers’ affirmative defenses, and (5) provided uncapped compensatory and punitive damages.

A recent Management Alert issued November 12, 2010, discusses features of the Paycheck Fairness Act in more detail. Paycheck Fairness Act May Become Reality in Lame Duck Senate Session. Click here to read.

A prior Management Alert, Is A Pay Audit in Your Future? also provided information about the legislation. Click here to read.

As a result of the recent elections, the divided power in Congress will slow down the Obama Administration’s legislative agenda for labor and employment issues. Beginning next year, with the House to be controlled by Republicans, it is not likely that sweeping or controversial legislation will be passed by Congress. The outcome this week on the Paycheck Fairness Act suggests that the Administration’s legislative agenda also faces long odds during the remainder of the 2010 “lame duck” session of Congress.

Even though the Paycheck Fairness Act is dead for now, employers should be mindful of increased agency enforcement focus on equal pay issues, particularly federal contractors subject to OFCCP audits. Employers should continue to monitor legislative developments in the pay equity area and consider proactive audits and internal reviews of pay practices in anticipation of increased enforcement efforts.