Urge the Urge the United States House of Representatives, the United States Senate, and President Obama to pass the Fair Pay Act (H.R.1493/S.788).

What is the Fair Pay Act (H.R.1493/S.788)?

The Fair Pay Act (H.R.1493/S.788), sponsored by U.S. Senator Tom Harkin (D-IA) and U.S. Congresswoman Eleanor Holmes Norton (D-DC), is a bill that seeks to end wage discrimination against those who work in female-dominated or minority-dominated jobs by establishing equal pay for equivalent work. The bill also protects workers on the basis of race or national origin. The Fair Pay Act makes exceptions for different wage rates based on seniority, merit, or quantity or quality of work. It also contains a small business exemption.

What is pay equity?

Pay equity is a means of eliminating sex and race discrimination in the wage-setting system. Many women and people of color are still segregated into a small number of jobs such as clerical, service workers, nurses and teachers. These jobs have historically been undervalued and continue to be underpaid to a large extent because of the gender and race of the people who hold them. Pay equity means that the criteria employers use to set wages must be sex- and race-neutral.

The Problem

Overview

In the United States, in the employment sector, discrimination in hiring and promotion has played a role in creating a segregated work force.  The reason for this is because, too many occupations remain dominated by one gender, and as a result many women and people of color work in these occupations are dominated by individuals of their same sex, race, and national origin.

One thing that the segregated workforce creates is, wage rate differentials exist between equivalent jobs segregated by sex, race, and national origin in Government employment and in industries engaged in commerce or in the production of goods for commerce.

In America,  the source of wage discrimination is embedded in the legal system and cultural history, which is exhibited , in today's compensation systems.  Historically,  employers considered  men to be the primary breadwinners and married women as being in the workforce to earn "pin money."   As a result, the "family wage" was built around the concept of a wage-earning male and a "dependent" female spouse. Some jobs were off-limits to women and minorities, and in many cases, women were discriminated against for reasons such as needing time off to have children.

Today, in female-dominated fields, moreover, wages have traditionally been depressed and continue to reflect the artificially suppressed pay scales that were historically applied to so-called “women’s work.”

While women have broken a lot of barriers in the employment sector in the past thirty years, even today women are still often steered into the more traditional female occupations - such as nurse, teacher, clerical worker, or retail sales clerk. This has perpetuated sex-based occupational segregation, which is beyond the reach of the Equal Pay Act alone.

The wage gap exists, in part, because many women and people of color are still segregated into a few low-paying occupations. More than half of all women workers hold sales, clerical and service jobs. Studies show that the more an occupation is dominated by women or people of color, the less it pays. Part of the wage gap results from differences in education, experience or time in the workforce. But a significant portion cannot be explained by any of those factors; it is attributable to discrimination. In other words, certain jobs pay less because they are held by women and people of color.

A 2007 study found that--even when accounting for key factors generally known to influence earnings such as race, educational attainment, and experience--nearly half (49.3 percent) of the pay gap can be explained by differences in the industries and occupations that men and women work in, and 41 percent of the pay gap cannot be accounted for but may be partially explained by discrimination in the workplace.

The existence of such wage rate differentials;

-depresses wages and living standards for employees necessary for their health and efficiency;

-prevents the maximum utilization of the available labor resources;

-tends to cause labor disputes, thereby burdening, affecting, and obstructing commerce;

-burdens commerce and the free flow of goods in commerce; and

- constitutes an unfair method of competition.

Statistics on Equal Pay: What is the current wage gap? How large is the wage gap?

In the United States, African-Americans only earn 62 cents for every dollar Caucasians make, Latinos only earn 68 cents for every dollar Caucasians make in the work place, and  women only make 77 cents for every dollar men make. 

In 2008, the earnings for African American women were $31,489, 67.9 percent of men's earnings (a drop from 68.7 percent in 2007), and Latinas' earnings were $26,846, 58 percent of men's earnings (a drop from 59 percent in 2007). Asian American women's earnings in 2008 were $42,215 -- 91 percent of men's earnings, an increase from 89.5 percent in 2007.

Who really needs pay equity?

Women, people of color, and white men who work in jobs that have been undervalued due to race or sex bias need pay equity. Many of these workers are the sole support for their families. In addition, it is estimated that 70 percent of women with children under 18 work outside the home. (Up  from  44.9 percent 20 years ago.) Discriminatory pay has consequences as people age and across generations. Everyone in society is harmed by wage discrimination. Therefore, everyone needs pay equity.

What is the legal status of pay equity?

Two laws protect workers against wage discrimination. The Equal Pay Act of 1963 prohibits unequal pay for equal or "substantially equal" work performed by men and women. Title VII of the Civil Rights Act of 1964 prohibits wage discrimination on the basis of race, color, sex, religion or national origin. In 1981, the Supreme Court made it clear that Title VII is broader than the Equal Pay Act, and prohibits wage discrimination even when the jobs are not identical. However, wage discrimination laws are poorly enforced and cases are extremely difficult to prove and win. Stronger legislation is needed to ease the burden of filing claims and clarify the right to pay equity.

The Solution

Women and people of color have been historically undervalued in the workplace due to discrimination. Above all, fair pay is a matter of justice and human dignity. But it also has severe economic ramifications. One study estimated that women earn $700,000 to $2 million less than men in wages over a lifetime. This significantly undermines their ability to provide for their families today and hurts their retirement security tomorrow. By ensuring fairness in compensation,  it would  provide workers with the respect that comes with a fair paycheck.

Laws regarding Equal Pay

Section 6(d) of the Fair Labor Standards Act of 1938 prohibits discrimination in compensation for `equal work' on the basis of sex.  Artificial barriers to the elimination of discrimination in compensation based upon sex, race, and national origin continue to exist more than 4 decades after the passage of section 6(d) of the Fair Labor Standards Act of 1938, the Equal Pay Act of 1963, and the Civil Rights Act of 1964 (42 U.S.C. 2000a et seq.). Elimination of such barriers would have positive effects, including—

-(A) providing a solution to problems in the economy created by discrimination through wage rate differentials;

-(B) substantially reducing the number of working women and people of color earning low wages, thereby reducing the dependence on public assistance; and

-(C) promoting stable families by enabling working family members to earn a fair rate of pay.

What will the Fair Pay Act do?

The Fair Pay Act (H.R.1493/S.788) would address this problem by extending the reach of the equal pay laws in the following ways:

Providing Equal Pay for Equivalent Jobs

The Fair Pay Act would equalize wage disparities between jobs that are segregated on the basis of sex, race, or national origin, but require equivalent skills, effort, responsibility, and working conditions.

It would amend the Fair Labor Standards Act of 1938 to prohibit discrimination in the payment of wages on account of sex, race, or national origin. (Allows payment of different wages under seniority systems, merit systems, systems that measure earnings by quantity or quality of production, or differentials based on bona fide factors that the employer demonstrates are job-related or further legitimate business interests.)

Protecting Victims of Wage Discrimination

Similar to the Paycheck Fairness Act, the Fair Pay Act provides punitive and compensatory damages to victims of wage discrimination. It also prohibits retaliation against individuals who exercise their rights under the law.

In addition,  it would prohibits the discharge of, or any other discrimination against, an individual for opposing any act or practice made unlawful by this Act, or for assisting in an investigation or proceeding under it.  

It would also direct courts, in any action brought under this Act for violation of such prohibition, to allow expert fees as part of the costs awarded to prevailing plaintiffs. Allows any such action to be maintained as a class action.

Requiring Employer Record Keeping

The Fair Pay Act requires all employers to keep records of the methods they use to set employee wages. Employers must also provide yearly reports to the EEOC that describe their workforce by position and salary as well as gender, race, and ethnicity.

The Fair Pay Act direct the Equal Employment Opportunity Commission (EEOC) to:

-(1) undertake studies and provide information and technical assistance to employers, labor organizations, and the general public concerning effective means available to implement this Act; and

-(2) carry on a continuing program of research, education, and technical assistance with specified components related to the purposes of this Act.

Who is covered by the Fair Pay Act?

Both private business and government agencies are covered. Part-time and temporary workers are protected to the same extent that they are currently under the FLSA.

How does this act expand upon the 1963 Equal Pay Act?

The Equal Pay Act essentially covers "equal pay for equal work" and applies only to sex-based discrimination. The Fair Pay Act expands these protections in two ways: First, it prohibits pay discrimination on the basis of race and national origin, as well as sex; Second, it prohibits such discrimination among workers performing dissimilar work in equivalent jobs. The Equal Pay Act prohibits only sex discrimination between workers performing substantially the same jobs.

How will the Fair Pay Act affect business?

Each employer individually will decide how its employees are paid. The government will absolutely not set wages. Under the Fair Pay Act, businesses would decide how jobs are valued, as they should. It requires only that a legitimate and non-discriminatory system be used to set wages.

Based on experiences in state government, effective pay equity programs can be implemented with minimal costs. Fair pay for employees can lead to greater productivity by raising morale among workers who expect to receive fair pay for their work. By compensating workers for the fair value of their work, the Fair Pay Act can help businesses recruit and retain the best-qualified workers. There has been no evidence of job loss associated with any pay equity plans. The many businesses that already evaluate their compensation plans to correct for the effects of bias will not be impacted by this legislation. For other employers, the Act will provide them with an incentive to examine their wage-setting policies in order to eliminate any bias.

What can you do to get the Fair Pay Act of 2011 passed?

Please write to and/or call your U.S. Representatives and Senators and President Obama tell them to pass the Fair Pay Act (H.R.1493/S.788). Also ask your U.S. Representatives and Senators to co-sponsor the Fair Pay Act (H.R.1493/S.788).