Ledbetter Bill Heads to the President’s Desk

By January 28, 2009Labor Unions

Even with the passage of the Ledbetter Fair Pay Act as the first major piece of legislation this session, some activists and editorialists are saying Congress needs to do even more to further strengthen current laws against gender-based wage discrimination.” That’s the description the New York Times used in an editorial, but it’s a misrepresentation of what the so-called Paycheck Fairness Act would do. In addition to allowing unlimited punitive and compensatory damages under the Equal Pay Act, the bill would fundamentally the change the ways business are able to make basic business decisions.

The Washington Post highlights this point:

…the new bill allows employers to defend against lawsuits by proving that pay disparities between men and women were based on “bona fide” factors, such as experience or education, and that these factors are tied to business necessities. Fair enough. But the bill also says that this defense “shall not apply” when the employee “demonstrates that an alternative employment practice exists that would serve the same business purpose without producing such differential and that the employer has refused to adopt such alternative practice.” But what if the employer has refused because it has concluded that the alternative is, indeed, more costly or less efficient? What if the employee and employer disagree on what the “business purpose” is or should be?

Diana Furchgott-Roth of the Hudson Institute also examines another aspect of the Paycheck Fairness Act: By changing existing rules concerning collective actions filed under the Equal Pay Act, the legislation would make it significantly easier for plaintiffs’ attorneys to file class action suits.

Also, it would encourage class actions by requiring workers who do not want to participate to opt out, rather than opt in, a radical change from conventional law and practice.  Employers would have to collect data on the race, sex, and wage of all workers and give it to the Equal Employment Opportunity Commission.

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