A flurry of lobbying activity, blogging exhortation and raised expectations poured forth last week over possible Senate action on S. 3772, the Paycheck Fairness Act, a bill that would attempt to impose rigid and unrealistic “pay equity” mandates on employers through government orders and the threat of litigation.
It appears that Senate action was really not in the works, and politicians and their activist allies were just ginning up the stories to motivate the political base. Such is Cynical September in Washington.
And really, you can’t be for “jobs” — that is, new hiring and a lower unemployment rate — and seriously support the bill. The additional rules and legal liability the bill would create would substantially raise the marginal costs of every new hire.
The Washington Post knocked the legislation today in an editorial, “Fair-pay misfire.”
It also mandates that the business necessity 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 — contrary to the employee’s assertion — more costly or less efficient? What if the employee and employer disagree on what the business purpose is or should be?
This approach also could make employers vulnerable to attack for responding to market forces. Take an employer who gives a hefty raise to a valued male employee who has gotten a job offer from a competitor. Would a court agree that the raise advanced a legitimate business purpose or could the employer be slammed unless he also bumps up the salary of a similarly situated female employee?
Discrimination is abhorrent, but the Paycheck Fairness Act is not the right fix.
The National Association of Manufacturers had key voted against the House version of the bill when it was considered in January 2009. So the Senate had 20 months to consider it but only now it’s being talked about?