Is this the year for the Paycheck Fairness Act?

Once again, the Paycheck Fairness Act (PFA) has been introduced in the House of Representatives. A s...

Posted by Sonia Chapin, SPHR, SHRM-SCP on February 11 2021
Sonia Chapin, SPHR, SHRM-SCP

Once again, the Paycheck Fairness Act (PFA) has been introduced in the House of Representatives. A similar bill has passed the House in prior years but has not been taken up in the Senate. With the recent changes in Senate makeup, is this the year for the PFA?

The PFA would amend the Fair Labor Standard Act of 1938 by modernizing the equal pay section of that Act. There are two main portions of the bill - one that updates the employer requirements and employee rights and one that directs government agencies to collect information on compensation.

The PFA, as written, would narrow the definition of “any factor other than sex” that can be used to explain an observed difference in pay. Employers would be subject to penalties for violations of the Act and updated nonretaliation clauses. Employee rights with regards to disclosing compensation would be expanded.

With regards to compensation reporting, the current version directs OFCCP to collect compensation, hiring, promotion, and termination data from at least half of contractor establishments every year. This requirement seems to be in line with OFCCP’s recent annual certification process, as an every other year option is included in that proposal. In the Act, OFCCP is directed to use this data to determine which establishments should receive further scrutiny, paving the way to a new audit selection process based on contractor reported data.

As to the original question – will the PFA pass this year? According to this bill tracking site, probably not. The PFA is currently rated at a less than 10% chance for making it all the way to enactment. However, regardless of if this bill becomes law, government contractors should expect executive action requiring compensation reporting. This will likely involve OFCCP’s AAP certification portal as the means to collect compensation information. What information is requested remains to be seen, but it is likely some sort of requirement will be in place by 2022.

Sonia Chapin, SPHR, SHRM-SCP
Sonia Chapin, SPHR, SHRM-SCP
As Managing Consultant for Berkshire, Sonia Chapin is responsible for the development and implementation of affirmative action planning.

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