Paycheck Fairness Act Would Have a Chilling Effect on Job Creation

As we noted earlier today, the Senate HELP Committee held a hearing on the Paycheck Fairness Act this morning. The NAM joined with many other employer groups in sending a letter to the HELP Committee members prior to the hearing. Our letter explains that the Paycheck Fairness Act “would jeopardize employee incentive pay and employee privacy, and promote costly litigation against even well-intentioned employers – all while doing little to prevent actual wage discrimination.”

Our letter further explains that if the bill were to become law it would:

  • threaten employee bonus or incentive pay that, by definition, provides some employees a higher wage than others,
  • prohibit employees from negotiating higher pay either before being hired or during employment,
  • allow employees’ wages to be disclosed to peers, friends, family and competitors,
  • require employers to submit pay data on their employees to the Federal government,
  • force the Labor Department to reinstate a flawed and duplicative pay grade survey that has proven ineffective at enforcing civil rights laws among federal contractors,
  • make it easier for trial lawyers to file large class actions against employers, and
  • establish unlimited punitive and compensatory liability under the Equal Pay Act against employers of every size.

While the Senate has been focusing on numerous bills to create jobs, it seems counterintuitive to move forward on legislation that would make it more difficult for employers to create and retain jobs.

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