Paycheck Fairness Act S.182
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The Fair Pay Campaign:
Working for Fair Pay for All
The National Women's Law Center has been a leader in the fight to ensure that all workers, especially women, receive fair and equitable pay for their work.
Next Stop: Paycheck Fairness
The Paycheck Fairness Act, passed in the House of Representatives in January and now pending in the Senate, aims to strengthen current laws against wage discrimination and provides tools to enable the federal government to be more proactive in the fight. Among other things, the Paycheck Fairness Act would also close a significant loophole in the Equal Pay Act to allow for full compensation for sex-based wage discrimination.
Resources
- State-by-State Data on the Wage Gap, April 2009
- Congress Must Act to Close the Wage Gap for Women: Facts on Women’s Wages and Pending Legislation, National Women's Law Center, April 2009
- Letter to the Senate in Support of the Paycheck Fairness Act, Coalition Sign-On Letter, April 2009
- A Platform for Progress: Supporting Women in the Workplace, National Women's Law Center, 2008
What You Can Do
- Urge your Senators to vote YES on the Paycheck Fairness Act.
- Sign the Fair Pay Campaign pledge and register to receive alerts and updates from the National Women’s Law Center.
- Spread the word -- Tuesday, April 28, Equal Pay Day.
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Pass the Paycheck Fairness Act (S.182)
To provide much needed improvements to current laws and to require the federal government to be more proactive in addressing wage discrimination, I urge you to take immediate action on pay equity by passing the Paycheck Fairness Act without any weakening amendment.
The Lilly Ledbetter Fair Pay Act restored to women the right to go to court to challenge pay discrimination. But more is necessary to realize the promise of equal pay for equal work. The Paycheck Fairness Act, which was passed by the House in January 2009, would deter wage discrimination by closing loopholes in the Equal Pay Act and barring retaliation against workers who disclose their wages. The bill also allows women and men to receive the same remedies for sex-based pay discrimination that are currently available to those subject to discrimination based on race and national origin. In addition, the bill would improve the collection of pay information by the Department of Labor and the EEOC to enable those agencies to evaluate pay disparities; facilitate class actions in Equal Pay Act claims to ensure that the rules that apply to civil rights lawsuits generally also govern the Equal Pay Act; and spark the development of salary negotiation skills training.
Now is the time for Congress to take the steps necessary to effectively address wage discrimination and eliminate loopholes that have undermined the Equal Pay Act's effectiveness. Again, I urge you to vote to approve the Paycheck Fairness Act when it comes to the floor, and to oppose any weakening amendments.
I look forward to your response.
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S. 182, the Paycheck Fairness Act. A companion bill to S. 182 was
passed on a bipartisan basis by the House of Representatives on January 9, 2009.
Congress took an important step in passing the Lilly Ledbetter Fair Pay Act of 2009. That
vital new law reverses the Supreme Court’s decision in Ledbetter v. Goodyear Tire &
Rubber Co. and helps to ensure that individuals subjected to unlawful compensation
discrimination are able to effectively assert their rights under the federal antidiscrimination
laws. But the Lilly Ledbetter Fair Pay Act, critical as it is, is just one of
many tools needed to address unfair wage disparities.
The Paycheck Fairness Act would deter wage discrimination by closing loopholes in the
Equal PayAct and barring retaliation against workers who disclose theirwages. The bill updates
and strengthens the Equal Pay Act of 1963 to ensure that it will provide effective protection
against sex-based pay discrimination. Toward that end, the measure allows women to receive
the same remedies for sex-based pay discrimination that are currently available to those subject to discrimination based on race and national origin. This comprehensive bill also provides
for much needed training and technical assistance as well as data collection and research.
Ensuring that women receive equal pay for equal work is a critical component of any effort
to stimulate the economy and to ensure self-sufficiency for them and their families.More than
four decades after Congress outlawed wage discrimination based on sex, women continue to
be paid, on average, only 78 cents for every dollar paid to men. This persistent wage gap can
be addressed only if women and all other workers are armed with the tools necessary to
challenge discrimination against them, and employers are provided with effective
incentives and technical assistance to comply with the law. The Paycheck Fairness Act
will help to better address the problem of wage discrimination and eliminate loopholes that
have undermined the EPA’s effectiveness.
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More than forty-five years ago, President Kennedy signed the Equal Pay Act (EPA)1 into
law, making it illegal for employers to pay unequal wages to men and women who perform
substantially equal work. The following year, Title VII of the Civil Rights Act of 1964 was
enacted, making it illegal to discriminate, including in compensation, on the basis of sex, race, color, religion, and national origin. At the time of the EPA’s passage in 1963, women earned merely 59 cents to every dollar paid to men.2 Although enforcement of the EPA and Title VII have helped to narrow the wage gap, significant disparities remain and must be addressed.
Congress has recently taken steps to improve the laws that govern pay discrimination. After the
Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co. severely limited workers’
ability to vindicate their rights under federal anti-discrimination laws, President Obama signed the Lilly Ledbetter Fair Pay Act as his first piece of substantive legislation.3 The Act reverses the Supreme Court’s harmful decision and restores the protection against pay discrimination that it stripped away. The Act makes clear that pay discrimination claims on the basis of sex, race, national origin, age, religion and disability may be filed when a discriminatory pay decision or practice is adopted, when a person becomes subject to the decision or practice, or when a person is otherwise affected by the decision or practice, “including each time an employee receives a discriminatory paycheck.”
Although the Ledbetter Fair Pay Act was a major step forward in addressing the wage gap for
women, it simply reaffirms what had been long accepted law prior to the Supreme Court’s
decision in Ledbetter. More is necessary both to strengthen equal pay laws, which have been
weakened over time by courts, and to require the federal government to be more proactive in
preventing and battling wage discrimination. For example, the House passed the Paycheck Fairness
Act, introduced by Representative Rosa DeLauro, in January 2009,4 and it is critical that the
Senate follow suit. In addition, Congress should promptly enact the Equal Remedies Act,
which would remove arbitrary limits on damages in discrimination cases, and the Fair Pay Act,
which would ensure equal pay to those with jobs that require equivalent skills, effort,
responsibility, and working conditions.
In these critical economic times, closing the gender wage gap is an important tool to
provide much needed economic stimulus for women and their families.
The Gender Wage Gap Persists
Wage disparities are of particular concern in light of the present economy. More than 14.4
million women – about one in eight – are poor, and women were 42 percent more likely to live
in poverty than men in 2007. While it is well-documented that men have been hit hard by the
current recession, women are suffering too: In March 2009, women’s unemployment jumped
to 7 percent, the highest rate in over 25 years. Indeed, since September 2008, as the
recession has spread from male-dominated sectors to female-dominated service and retail
sectors, women’s unemployment has risen slightly faster than men’s unemployment.5
Making sure women are fairly paid is a key tool to address these economic realities.
In 2007, women working full-time, year-round were paid only 78 cents for every dollar earned
by men. The median earnings of white, non-Hispanic women working full-time, year-round
were $36,745 compared to $50,330 for white, non-Hispanic men, meaning they earned only
73 cents for every dollar earned by their male counterparts.6
The gender wage gap is exacerbated by race and national origin; minority women fare
significantly worse when compared to white, non-Hispanic men. In 2007, African American
women working full-time, year-round earned 62% of the wages of white, non-Hispanic men
($31,009 compared to $50,330) while Hispanic women earned just 53% of the wages of
white, non-Hispanic men ($26,612).7 This means that an African American woman earned
just 62 cents for every dollar earned by a white, non-Hispanic man, while a Hispanic woman
earned only 53 cents on the dollar compared to white, non-Hispanic males.8
An earnings gap exists between women and men across a wide spectrum of occupations. In
2007, for example, the median weekly wages earned by women physicians were just 59% of
the median weekly wages of male physicians.9 Women in sales and sales-related occupations
earned only about 62% of the median weekly wages of men in equivalent positions.10 While
the gap is narrower in some occupations, it is still substantial. Women in the construction
industry, for example, earned median weekly wages that were only 88% of what their male
counterparts earned.11 And women in computer and mathematical occupations had weekly
earnings that were 81% of the wages paid their male counterparts.12
In some occupations, women have actually lost ground. For example, in a study of
management positions in 10 industries that together employ over 70% of women in the
workforce, the U.S. Government Accountability Office (then the General Accounting Office)
found that women managers consistently made less than their male counterparts; in seven of
the 10 industries, the pay gap had increased between 1995 and 2000.13
The earnings gap between women and men also persists across all educational levels.14 While
education lifts all boats, it lifts men’s boats much higher than women’s. For example, in 2007
among workers 25 years of age and older with some high school education, women’s median
annual earnings were $15,373, compared to $25,074 for men.15 Graduation from high school
boosted women’s median earnings to $22,357, yet the same high school degree yielded
$34,772 for men.16 Even a two-year associate’s degree gives men a much bigger bang for
their buck ($45,199 in median annual earnings) than it does for women ($30,551).17 And
while earning a bachelor’s degree yielded a median annual of income of $39,149 for women,
it produced a whopping $58,341 for men.18 In fact, the pay gap is widest among non-Hispanic
white men and women: non-Hispanic white men with just a high school diploma make almost
as much ($37,030) as non-Hispanic white women who have graduated from college
($38,641).19
There is not a single state in which women have gained economic equality with men.20 As of
2007, Washington, D.C. was the area with the smallest wage gap, at 93%, whereas Wyoming had the widest gap, with women making about 63% of what men earned.21 For state-by-state
information on how women continue to be short-changed in their pay, visit:
http://www.nwlc.org/fairpay/statefacts.html.
As women get older, the wage gap for them widens. When women start their careers, the pay
gap is relatively small: females aged 15 to 24 working full-time, year-round have median
annual earnings that are 95% of what their male counterparts earn.22 However, by the time
they reach the critical years leading up to retirement, that 5% pay gap has increased over five
times: women aged 45 to 64 who work full-time, year-round earn only 72% of what men do.23
If women in the workforce earned the same amounts as men who work the same number of
hours, have the same education, age, and union status and live in the same region of the
country, their annual family income would rise by about $4,000 and their poverty rates would
be cut by half or more.24 The Institute for Women’s Policy Research has calculated that a
typical woman who graduated college from 1984 and who was in her mid-40s in 2004 has lost
more than $440,000 during that period due to the wage gap.25 Similarly, the Center for
American Progress found that women lose $434,000 over their lifetimes as a direct result of the
gender pay gap.26 For women in the workforce, closing the gender wage gap is an important
tool to enhance their family incomes and provides needed economic stimulus to families during
these difficult economic times.
Pay inequity also follows women into retirement. Unmarried women in the workforce today
will receive, on average, about $8,000 a year less in retirement income than their male
counterparts; even controlling for number of years worked and educational levels, the pay gap
during prime working years, plus spending a career in a female-dominated job, accounts for
two-thirds of that retirement income gap.27 Women’s loss of income in retirement due to pay
inequity during their working years shows up primarily in their pensions and savings, not their
Social Security. To the contrary, Social Security’s progressive benefit formula and spousal
benefits help women to counteract the effects of wage discrimination.28
The Wage Gap Reflects Sex Discrimination
The wage gap cannot be dismissed as the result of “women’s choices” in career and family
matters. In fact, recent authoritative studies show that even when all relevant career and family attributes are taken into account, there is still a significant, unexplained gap in men’s and women’s earnings. Thus, even when women make the same career choices as men and work the
same hours, they still earn less.
A 2003 study by U.S. Government Accountability Office (then the General Accounting
Office) found that, even when all the key factors that influence earnings are controlled for —
demographic factors such as marital status, race, number and age of children, and income, as
well as work patterns such as years of work, hours worked, and job tenure — women still
earned, on average, only 80% of what men earned in 2000. 29 That is, there remains a 20% pay
gap between women and men that cannot be explained or justified.
One extensive study that examined occupational segregation and the pay gap between women
and men found that, after controlling for occupational segregation by industry, occupation,
place of work, and the jobs held within that place of work (as well as for education, age, and
other demographic characteristics), about one-half of the wage gap is due solely to the
individual’s sex.30
The wage gap between men and women starts within one year after college graduation: women
working full-time earn only 80 percent as much as their male counterparts, at a time when the
vast majority of women and men are likely not to have taken time out of the workforce.31
Studies like these are borne out by case after case, in the courts and in the news, of suits
brought by women charging their employers with wage discrimination. The evidence shows that
sex discrimination in the workplace is still all too prevalent. Recent examples of pay
discrimination cases include:
In the largest employment discrimination suit ever filed, female employees have sued Wal-
Mart for paying women less than men for similar work and using an old boys’ network for
promotions that prevented women’s career advancement. One woman alleged that when she
complained of the pay disparity, her manager said that women would never make as much as
men because “God made Adam first.” Another woman alleged that when she applied for a
raise, her manager said, “Men are here to make a career, and women aren’t. Retail is for
housewives who just need to earn extra money.”32 The Ninth Circuit recently reaffirmed the
case as a class action on behalf of more than 1.5 million women who are current and former
employees of Wal-Mart.33
In February 2007, a federal judge approved a $2.6 million settlement against Woodward
Governor Company for gender discrimination with respect to pay, promotions and training.
The Equal Employment Opportunity Commission (EEOC) sued the global engine systems and
parts company on behalf of female employees working at two of the company’s plants.
Pursuant to the terms of the agreement, an outside individual will oversee the company’s
implementation of and compliance with the settlement, including the development of written
job descriptions for the positions at issue as well as performance appraisals and a
compensation review process.34
In 2004, on the eve of trial, investment house Morgan Stanley agreed to settle a sex
discrimination class action filed by the EEOC alleging that the investment firm paid women in
mid- and upper-level jobs less than men, passed women over for promotions, and committed
other discriminatory acts. Although it denied the allegations, Morgan Stanley did agree to pay
$54 million to the plaintiffs and to take numerous other actions to prevent discrimination in
the future.35
In 2004, Wachovia Corporation admitted no wrongdoing but agreed to pay $5.5 million to
settle allegations by the U.S. Office of Federal Contract Compliance Programs that it engaged
in compensation discrimination against more than 2,000 current and former female employees
over six years.36
Clearly, sex discrimination plays a major role in producing and sustaining the wage gap for
women. It is thus hardly surprising that public opinion surveys consistently show that
ensuring equal pay is among women’s top work-related priorities. For instance, nine in 10
women responding to the “Ask a Working Women Survey” conducted by the AFL-CIO in
2004 rated “stronger equal pay laws” as a “very important” or “somewhat important” legislative
priority for them.37 Similarly, a January 2007 national survey of 1000 unmarried adult
women by Women’s Voices Women Vote found that 73% of respondents said that support
for pay equity legislation would make them “much more likely” to support a Congressional
candidate.38
Legislation Is Needed to Close Loopholes in the Law, Reverse Rollbacks in Federal
Enforcement, and Promote Truly Equal Pay for Equal Work
Unfortunately, the way courts have interpreted Title VII and the Equal Pay Act is
insufficient to remedy persistent wage disparities and demonstrates the need for stronger laws to ensure that women are paid equal wages for equal work. The Lilly Ledbetter Fair Pay Act was a
critical piece of a larger series of legislative reforms necessary to accomplish these goals. But more is necessary to close the pay gap, including the bills discussed below:
The Paycheck Fairness Act
Enactment of the Paycheck Fairness Act, passed by the House of Representatives in January
2009 and pending in the Senate, would update and strengthen the EPA in important ways:
The Act Would Reinstate Pay Equity Programs and Enforcement at the Department of
Labor
The Act reinstates the collection of gender-based data in the Current Employment Statistics
survey. It sets standards for conducting systematic wage discrimination analyses by the agency
that oversees the nondiscrimination and affirmative action obligations of federal contractors. 39
The Act also directs the Department to implement of the Equal Opportunity Survey, a vital
tool for detecting wage and other types of discrimination. 40
The Act Would Spark the Development of Salary Negotiation Skills Training
The Act establishes a competitive grant program to develop training programs for women and
girls on how to negotiate better compensation packages, and directs the Secretaries of Labor
and Education to integrate the programs developed into education and job training programs
under their respective jurisdictions.
The Act Would Increase Training, Research, and Education
The Act provides for increased training for EEOC employees to help them identify and
respond to wage discrimination claims. It also calls for enhancing various research and
education programs at the Department of Labor, including programs to research ways to
eliminate gender-based pay disparities and provide information to employers to assist them
in eradicating such disparities.
The Act Would Improve Collection of Pay Information by the EEOC
With limited exceptions designed to enable employers to protect proprietary
information, the Act requires the EEOC to survey pay data already available and issue