The Paycheck Fairness Act would amend the Fair Labor Standards Act of 1938 to strengthen protections against wage discrimination based on sex and related characteristics. It expands the legal scope of “sex” to include pregnancy, childbirth or related conditions, sexual orientation, gender identity, and intersex traits. It tightens the defenses employers can use to justify pay differences, enhances remedies (including class actions and damages for violations), and broadens enforcement through the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP). The bill also adds new prohibitions on pay history practices (for prospective employees) and requires extensive data collection and reporting on pay and employment demographics, while funding training, research, and coordination across agencies. A new National Equal Pay Enforcement Task Force would oversee interagency coordination, and a National Award for Pay Equity would recognize employers taking proactive steps to close pay gaps. The act includes a 6-month effective date and provides small-business exemptions similar to current FLSA exemptions.
Key Points
- 1Expanded definitions and coverage: “Sex” includes pregnancy, childbirth, sexual orientation, gender identity, and intersex traits; ensures these categories are protected from wage discrimination.
- 2Enhanced enforcement and remedies: The bona fide factor defense is narrowed and clarified (factors must be non-sex-based, job-related, business-necessary, and account for the entire differential; an alternative practice must be considered). The act allows broader relief, including class actions and potential compensatory and punitive damages for violations, with targeted enforcement by EEOC and OFCCP and coordinated penalties.
- 3Wage-history prohibitions: It is unlawful to rely on a prospective employee’s prior wages to set or constrain pay, to seek wage history, or to retaliate against someone for opposing discriminatory pay practices; prohibits required waivers restricting disclosure of wage information.
- 4Data collection and transparency: The EEOC must annually collect disaggregated compensation data by sex, race, and national origin (and possibly other employment data), from large private employers (100+ employees) or as determined by the agency. The data must be reported publicly at 18-month intervals in aggregate form by industry, occupation, and metropolitan area; OFCCP and other DOL efforts would also collect and use such data for enforcement and policy purposes.
- 5Training, research, and interagency coordination: The act requires targeted training (including negotiation bias training) for employers and employees; funds a grant program to promote such training; supports research on pay gaps (including among younger workers), and establishes a National Equal Pay Enforcement Task Force to coordinate efforts across EEOC, DOJ, DOL, and OPM; and creates a National Award for Pay Equity to recognize exemplary employers.
- 6Notices, small-business considerations, and implementation: Employers must post notices describing the new requirements (including electronic posting); small businesses receive exemptions similar to existing FLSA exemptions; there is a 6-month effective date after enactment for the new provisions.