The most threatening piece of anti-employer, anti-jobs legislation in the lame-duck session is S. 3772, the Paycheck Fairness Act, which could come up for a cloture vote in the Senate on Wednesday.
The bill extends federal government control over wage decisions made by employers to reflect their business’ specific circumstances, setting a rigid “pay equity” standard as the priority above all other factors. The Chicago Tribune summarized the problems in an editorial, “Paycheck Fairness?”
The proposed law says that in cases where a pay disparity between men and women is challenged in court, an employer would have to prove there is some reason for the gap other than discrimination. The employer would also have to prove that the gap serves a necessary business purpose. And even then, the employer could be in trouble if a court determines that an “alternative employment practice” would serve the same purpose without skewing the salaries.
Those judgment calls go by another name: management decisions. The legislation would open businesses to wide second-guessing of decisions they made to hire and promote the most effective work force in a competitive environment. It would leave businesses with one eye on the competition and one eye on what a judge might decide in hindsight is a preferable “alternative employment practice.”
Uncle Sam to the nation’s employers: We’ll tell you how to run your business.
The bill would also be a bonanza for the trial lawyers, because it removes limits on awards in employment discrimination litigation and makes participation in class-action lawsuits a matter of opt-out, rather than opt-in.
The Hudson Institute on Wednesday, Nov. 10, sponsored a forum on Capitol Hill on the legislation, “The Negative Employment Effects of the Paycheck Fairness Act.” Papers and presentations:
- June O’Neill, Baruch College, City University of New York, “The Paycheck Fairness Act”
- Diana Furchtgott-Roth, Huson Institute, “The Employment Effects of the Paycheck Fairness Act”
- Lauri Damrell, Orrick, Herrington & Sutcliffe LLP, “How Would Employers Comply?”
- Nita Beecher, Mercer ORC Networks, “How Would Employers Comply?”
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