Paycheck Fairness

The Paycheck Fairness Act would amend the Equal Pay Act and create new damages and causes of action while removing impediments for employees to bring suits. 

Specifically, the Paycheck Fairness Act would make the following changes:
• Bar retaliation against workers who share information about wages with other employees (not a new concept in California, where the practice is prohibited under the Labor Code);
• Allow for compensatory and punitive damages;
• Allow for opt-out class actions (as opposed to the current opt-in system); and
• Narrow the “any factor other than sex” affirmative defense by requiring employer-proffered rationales for pay disparity to be job-related, bona fide factors linked to business necessities.

The Paycheck Fairness Act, especially when combined with the recently-passed Lilly Ledbetter Fair Pay Act, could trigger a wave of individual and collective wage-and-hour actions. Employers will need to review their compensation policies and procedures to ensure they are updated and being implemented properly. Employers also should start looking more closely at their compensation structure (preferably with counsel) to ensure that any disparity is based on bone-fide factors related to business necessity.