Gender pay gap bill hits impasse in Senate

The movement toward eradicating the longstanding discrepancies of pay between male and female workers slowed this week when the the Paycheck Fairness Act failed to foster enough votes to advance.

And while the political inaction has disappointed advocates of equal pay for employees, some members of the benefits industry say the legislation would have restricted employers’ ability to make their own compensation decisions.

First introduced by Sen. Barbara Mikulski (D-Md.) in April, S. 2199 – armed with three related bills in the Senate and House – hit a wall Sept. 15 when lawmakers voted 52-40 against it. Even though women make half of the American workforce, the bill failed to achieve a procedural vote of 60 that would allow supporters to fast track consideration before election season approaches

The Paycheck Fairness Act seeks to amend the Fair Labor Standard Act of 1938, also known as the Equal Pay Act, for guidance and enforcement of pay discrimination. Mikulski’s bill prohibits employer retaliation against employee complaints, inquiries and discussions of wages. 

The wage fairness measure also proposed an amendment to the Civil Rights Act of 1964 that would require the Equal Employment Opportunity Commission – which offered pregnancy guidance to employers earlier this year – to collect pay data regarding sex, race and national origin. While some employers may be liable for civil action under the new proposed rules, the Department of Labor is expected to communicate information to help rid the workforce of these pay disparities.

See also: Varied response to EEOC’s new pregnancy guidance

Meanwhile, there has been little movement when it comes to gender wage gaps currently facing the national female workforce. For instance, the U.S. Census Bureau said women earned 77% of what men earned for full-time, year-round workers, in 2012. When comparing annual compensation, women now earn just $1,500 more than what more men were paid in 1960.

According to the American Association of University Women, a group that promotes the equity and education for women and girls, the pay gap inched up to 78% in 2013. Everywhere from elementary school teachers to computer programmers, women are paid less, according to the AAUW.

Lisa Maatz, the vice president of government relations at the AAUW, says the Paycheck Fairness Act is a “great example of [how] an ounce of prevention is worth a pound to cure.” Maatz says the quest for fair wages still continues.

“I think these things happen because of cultural stereotypes and because [companies] don’t have checks and balances perhaps in their HR departments,” says Maatz. “I think if you put systems in place this is a problem that can be handled very easily. And truthfully, that’s what we’re trying to do with the Paycheck Fairness Act, and quite frankly make the deterrent strong enough that employers find it would be better for them to get the house order than potentially wait for some problem down the road.”

The AAUW proposes that companies take a proactive approach before legislation is passed. This includes conducting salary audits, which can allow employers to monitor gender-pay differences. For the individual, the association states that improved negotiation skills also can help to close the pay gap over time.

Meanwhile, while the Society for Human Resource Management supports the two federal laws that already protect against gender pay inequity, Kelly Hastings, senior government relations adviser for SHRM, says “although well-intentioned, it [the Paycheck Fairness Act] is the wrong approach.”

“HR professionals who manage compensation use their professional judgment to consider a number of legitimate factors in creating fair and equitable compensation systems,” Hastings says. “These include productivity, prior salary history and market rates. By significantly restricting the factors used in setting compensation, the Paycheck Fairness Act would threaten the tools that HR professionals use to reward and retain their employees.”

See also: Paid medical leave bills to incentivize employer participation

On the national stage, President Barack Obama noted in June at the White House Summit on Working Families that women in the workforce have a major stake in the economic security of employees and the overall success of American employers. At the time, he said he asked Tom Perez, the secretary of labor, to “review overtime protections for millions of workers to make sure they’re getting the pay that they deserve.”

An Executive Order preventing retaliation against federally contracted workers who share their salary information was also penned by the President. And on Sept. 15, the same day the paycheck fairness effort stalled on the Senate floor, DOL’s Office of Federal Contract Compliance Programs announced a proposed rule to prohibit federal contractors “from maintaining pay secrecy policies.” The President’s Executive Order will be open for public comment over the next 90 days.

“Pay transparency isn’t just good for workers. It’s good for business,” says Patricia A. Shiu, OFCCP director. “Fairness and openness are great qualities for a company’s brand.”

AAUW’s Maatz agrees, but says “we don’t want it to be an issue that spooks employers.”

“It’s not only the right thing to do, it’s good business because it helps to retain employees,” Maatz explains. “Quite frankly, it creates good will in a way that is useful to anybody who wants a successful business.”

Highlighting that employers may already be attuned to this fair compensation and benefits pay structures, Philip Noftsinger, business unit president of CBIZ Payroll, explains that it’s “pragmatic to ensure that individuals performing the same tasks with the same basic skills are compensated equally, regardless of their differences,”

“Lawsuits are expensive to defend, regardless of their outcome, and most employers are going to ensure there’s no reason for someone to engage in litigation,” explains Noftsinger. “That said, we will always have to deal with those that do not play by the rules, written or unwritten.”

But when it comes to larger or smaller employers, he says there may be some hiccups for those with fewer employees solely due to the nature of their management.

“The larger the audience who holds information, the greater the possibility that information will be exposed (and therefore concerns will be addressed) or someone would object or work to correct inequities,” says Noftsinger. “In smaller companies, information is more tightly held by an individual or a smaller group, so it’s only logical that if inequities were to exist, they have a greater chance of existing in an environment of less transparency.”