Paycheck Fairness Act: A flawed approach to job bias

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Tuesday, September 28, 2010

THERE SHOULD BE no tolerance for gender-based discrimination in the workplace, and the Paycheck Fairness Act contains sensible provisions on the issue, including protections against retaliation for employees who challenge pay schedules. But the proposal, which builds on the existing Equal Pay Act, would allow employees and courts to intrude too far into core business decisions.

The bill, which is pending in the Senate, would allow employers to defend against equal-pay 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 "consistent with business necessity." This provision would codify the current state of the law as developed in the courts over the past 30 years. During that time, judges pressed employers to prove the need for educational requirements that had no nexus to advertised jobs. Such requirements were often used to deny employment to minority applicants.

But the bill does not stop there. 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.


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