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One last push for the misnamed Paycheck Fairness Act

Senate Majority Leader Harry Reid on Monday, Sept. 13, introduced S. 3772, the Paycheck Fairness Act, giving new, election-season impetus for the bill that would encourage lawsuits against employers.

The House passed its own version, H.R. 12, in January 2009 in tandem with the Lilly Ledbetter Fair Pay Act, which removed statutes of limitations on employment pay suits. Reid's bill supplants the one introduced by Sen. Hillary Clinton (D-NY), S. 182, before she became Secretary of State.

Free market advocates oppose the bill for government's interference in supply and demand and contracts, well summarized by Hans Bader of the Competitive Enterprise Institute as "[forcing] employers to pay some people equal amounts for doing unequal work." (Washington Examiner, Aug. 4, "Paycheck Fairness Act would mandate equal pay for unequal work, triggering flood of lawsuits.")

Business groups also object to the legislation's provisions that would encourage more lawsuits against employers. As the National Association of Manufacturers' "key vote" letter opposing the House bill summarized:

By removing all limits to punitive and compensatory damage awards on claims made under the Equal Pay Act (EPA), the Paycheck Fairness Act (H.R. 12) would expose employers to increased threats of litigation - even when unintentional pay disparities may have occurred. Its passage would likely prompt many employers to purchase additional legal liability insurance, increasing their costs and decreasing their ability to raise wages, increase benefits or hire new U.S. House of Representatives workers. In fact, it is difficult to imagine a scenario in which the bill would not lead to lower wages and fewer jobs.

The White House has stepped up its advocacy for the bill, with adviser Valerie Jarrett having an op-ed published in The Washington Post promoting the bill, "Closing the wage gap: It's a matter of survival for working families" adding some "it's a matter of life or death!" hyperbole to the usual "women only make 77 cents for every dollar a man makes" misrepresentation. Thankfully, Diana Furchtgott-Roth is always prepared with a factual refutation as in this letter, "After almost 50 years, the gender gap in pay still resonates."

UPDATE (4:40 p.m.): The head lobbyist for the Association of American University Women had a meeting with Senate Majority Leader Harry Reid this afternoon on the issue, or so her Twitter report has it.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.