Business community opposes Paycheck Fairness Act

As the Obama administration continues to work toward economic recovery, the Senate will be debating the Paycheck Fairness Act next week — a bill that the business community says is both unnecessary and sure to hurt job creation, but that others contend is necessary to ensure gender equity in the workplace.

According to business groups, on its face the bill seems innocuous enough. After all, who wouldn’t be in favor of gender equity in the work place?

However, they say, the bill — already approved 256-163 in the House last year —would try to ensure pay equity by restricting employers salary decisions, making it easier to file suit against employers believed to be engaged in sex-based pay discrimination and requiring businesses to disclose detailed salary information to the government.

Many further argue that the legislation is superfluous, as the Equal Pay Act and Title VII of the Civil Rights Act already provide protection against gender-based wage discrimination.

Michael Layman, labor and employment manager for the Society for Human Resource Management (SHRM), stressed that, with a membership that is about 70% female, SHRM takes pay discrimination very seriously but that the Paycheck Fairness Act would be excessive and overly burdensome.

“Whether you are a small business owner or a corporation with an entire human resources department, the business uses their professional judgment in the marketplace to make salary offers and pay decisions,” Layman told The Daily Caller. “There is no ‘correct wage’ for any given employee, so the Paycheck Fairness Act touches on the subjective nature of salary to make the employer easier to sue than they are under the existing two federal gender pay discrimination laws.”

The U.S. Chamber of Commerce shares that sentiment. Mike Eastman, the Chamber’s executive director of labor law policy, told TheDC that the Chamber is concerned about the harm it will cause to American business.

“It’s a bill we really don’t like,” Eastman said, pointing to the onerous restrictions, regulations and potential for frivolous lawsuits he says the bill creates. “As a practical matter it is just one more thing that creates a disincentive to do business here in the United States. If you are looking at where to open a new business, it is going to be a factor.”

Eastman continued by noting that the potential for high priced litigation is among the more worrisome aspects of the bill.

“This would be the first law in the EEOC’s (Equal Employment Opportunity Commission) jurisdiction that would have unlimited punitive damages at their disposal,” he said. “And they are notorious for engaging in bad faith and using heavy handed tactics to get employers to cave in. If now there is no limit on the punitive damages, you can imagine the threat to business.”

In a letter to then-director of the Office of Management and Budget Peter Orszag in June, the Business Roundtable and The Business Council cited the Paycheck Fairness Act as an example of pending legislation that would hurt economic growth and stifle job creation.

“[Paycheck Fairness] would open companies to potentially crippling employment litigation without adding significant benefit to workers, since current law already addresses the discrimination issue,” the letter read.

In spite of the concerns coming from the business community, women’s groups, labor organizations, and even the president insist that the Paycheck Fairness Act is essential to ensure that women are treated fairly in the workplace.