On March 11, 2010, the Health, Education, Labor, and Pensions (HELP) Committee of the United States Senate held a hearing on the Paycheck Fairness Act (PFA), which was passed by the House of Representatives nearly 14 months ago. The PFA would amend the Equal Pay Act of 1963, which makes it unlawful for employers to pay unequal wages to men and women who perform substantially equal work.

As passed by the House, the PFA would add compensatory and punitive damages for pay discrimination claims and permit class action lawsuits. The PFA would also narrow an employer’s defense to Equal Pay Act claims. Currently, an employer may defend a wage disparity by establishing that it is caused by "any other factor other than sex." The PFA would narrow this defense to a more restrictive standard of “a bona fide factor other than sex, such as education, training, or experience,” and in addition require employers to demonstrate that such factor is job related to the position in question and consistent with business necessity. The PFA also would prohibit retaliation against an employee for inquiring about, discussing, or disclosing employee wages, for filing a complaint or making a charge, or for assisting in the furtherance of a sex discrimination investigation, proceeding, hearing, or action. If the PFA is passed into law, the Equal Employment Opportunity Commission would issue regulations and collect pay data information from employers as described by the race, sex, and national origin of the employees.

The HELP Committee heard substantial testimony from both supporters and opponents of the bill. Supporters pointed to statistics showing that women’s wages, and more so the wages of minority females, are still not on par with their male counterparts, and argued that workers do not currently pursue pay discrimination actions because they do not have access to information about their colleagues’ earnings. Supporters also argued that the PFA would not result in a flood of lawsuits because employers would voluntarily make pay adjustments to avoid litigation. On the other hand, opponents of the PFA argued that pay disparities between men and women are often caused by differences in education and experience and not by discrimination. Opponents told the HELP Committee that the real winners under the PFA would be the lawyers who bring class action lawsuits, which often result in lucrative attorneys fee awards to the plaintiffs’ class counsel.

It is difficult to predict the likelihood of the PFA’s passage in the near future, as the bill has already been in the Senate for more than a year. However, now that the bill has proceeded to the formal hearing stage before the Senate HELP Committee, it is important legislation for employers to keep an eye on.