The "Fair Compensation in Employment Act": Restoring Stability and Certainty to American

Objective: To update outdated legal frameworks to ensure true fairness and predictability within the civil justice system for employers and employees alike.

1. Upholding the Sanctity of Contracts and the Rule of Law

The current caps on damages for proven, intentional discrimination haven't been touched since 1991. Due to inflation, their real value has eroded by over 100%. This is not a new entitlement; it is simply restoring the original, agreed-upon deterrent the law intended.
A predictable legal environment is essential for a stable economy. The current system is unpredictable because the deterrents are arbitrary and no longer reflect the economic realities set by Congress decades ago. This act simply corrects for bureaucratic inertia and inflation.

2. Emphasizing Individual Responsibility and Deterrence of Malicious Conduct

This bill targets only 'willful, malicious, or fraudulent discrimination.' We're talking about employers who knowingly and actively break the law, not minor compliance issu Americans believe in individual responsibility, and those who intentionally violate the rights of others must face appropriate consequences.
The enhanced penalties for egregious conduct (treble damages) send a clear message that intentional fraud and malice have no place in a free market. We need a strong deterrent to prevent bad actors from undermining the integrity of the business community as a whole.

3. Promoting Predictability and Reducing Litigation Uncertainty

By indexing the caps to the Consumer Price Index (CPI-U), we remove the need for future, politically charged legislative battles. We introduce long-term certainty. Businesses and their insurers can better anticipate risk when the legal framework is stable and indexed to objective economic metrics.
Predictability in law is pro-business. This bill replaces a stagnant, arbitrary system with a clear, dynamic one that tracks economic reality.

4. Limited Government and Judicial Constraint

Congress must fulfill its duty to maintain the laws it passes. Allowing inflation to silently rewrite the law forces the judiciary into an interpretive gray area. By explicitly indexing these caps, we ensure the law remains exactly as intended by the legislative branch, not an activist judge.
This legislation maintains a tiered, capped structure. It is a measured, limited government approach to civil justice, not a blank check. We are defining the boundaries clearly.
 
Summary

The "Fair Compensation in Employment Act" is a fiscally responsible, bipartisan approach to maintaining the integrity of our existing civil rights laws. It does not expand government; it corrects for inflation and ensures that when an employer is found guilty of malicious, willful discrimination, the penalty is the one originally established by Congress in 1991. It champions individual responsibility and brings predictability to the legal system, which is good for all American businesses.

 
A BILL

To amend section 1981a of title 42, United States Code, to provide for the adjustment of damages caps for inflation and to authorize enhanced damages for willful, malicious, or fraudulent discrimination.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the "Fair Compensation in Employment Act".

SEC. 2. FINDINGS AND PURPOSE.

(a) FINDINGS.—Congress finds that—
(1) the caps on compensatory and punitive damages for intentional employment discrimination, established in the Civil Rights Act of 1991, have not been adjusted since their enactment;
(2) inflation has significantly eroded the real value of these caps, reducing their effectiveness as a deterrent and limiting fair compensation for victims of discrimination; and
(3) intentional and malicious discrimination warrants enhanced penalties to ensure accountability and protect the integrity of the Nation's civil rights laws.

(b) PURPOSE.—The purpose of this Act is to restore the original intent and effectiveness of the 1991 damage caps by indexing them to inflation and providing for treble damages in cases of willful, malicious, or fraudulent employer conduct.

SEC. 3. AMENDMENTS TO DAMAGES IN CASES OF INTENTIONAL DISCRIMINATION IN EMPLOYMENT.

Section 1981a(b)(3) of title 42, United States Code, is amended to read as follows:

(3) LIMITATIONS AND ADJUSTMENTS.—

(A) IN GENERAL.—This section would modify the existing limitations on compensatory and punitive damages, maintaining a tiered structure based on the number of employees of the respondent. The proposed caps would be:

(i) $50,000 for employers with more than 14 and fewer than 101 employees;

(ii) $100,000 for employers with more than 100 and fewer than 201 employees;

(iii) $200,000 for employers with more than 200 and fewer than 501 employees; and

(iv) $300,000 for employers with more than 500 employees.

(B) INFLATION ADJUSTMENT.—The bill would mandate annual adjustments to these dollar amounts based on the Consumer Price Index for all Urban Consumers (CPI-U) to counteract inflation since the 1991 Civil Rights Act. The Secretary of Labor would be required to publish these adjusted caps annually.

(C) TREBLE DAMAGES FOR EGREGIOUS CONDUCT.—For cases involving willful, malicious, or fraudulent discriminatory intent, the court could award treble (triple) the amount of compensatory damages otherwise available.

SEC. 4. APPLICABILITY AND EFFECTIVE DATE.

(a) APPLICABILITY.—The amendments made by section 3 shall apply to all claims under the Civil Rights Act of 1964 and the Americans with Disabilities Act of 1990 that are pending on or after November 11, 2025.

(b) REOPENING OF JUDGMENTS.—Notwithstanding any other provision of law, for any judgment entered on or after November 11, 2025, if the amount of damages awarded was limited by the caps in effect immediately prior to the date of enactment of this Act, any party to such a judgment may file a motion with the appropriate court to have the damages recalculated in accordance with the amendments made by section 3. The court shall grant such motion and adjust the award accordingly, even if the judgment is considered final or the time for appeal has expired.