Paycheck Fairness Act

II Calendar No. 46 117TH CONGRESS 1ST SESSION H. R. 7 IN THE SENATE OF THE UNITED STATES APRIL 19, 2021 Received; read the first time APRIL 20, 2021 Read the second time and placed on the calendar AN ACT To amend the Fair Labor Standards Act of 1938 to provide more effective remedies to victims of discrimination in the payment of wages on the basis of sex, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Paycheck Fairness 4 Act’’. 5 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 2 HR 7 PCS SEC. 2. ENHANCED ENFORCEMENT OF EQUAL PAY RE- 1 QUIREMENTS. 2 (a) DEFINITIONS.—Section 3 of the Fair Labor 3 Standards Act of 1938 (29 U.S.C. 203) is amended by 4 adding at the end the following: 5 ‘‘(z) ‘Sex’ includes— 6 ‘‘(1) pregnancy, childbirth, or a related medical 7 condition; 8 ‘‘(2) sexual orientation or gender identity; and 9 ‘‘(3) sex characteristics, including intersex 10 traits. 11 ‘‘(aa) ‘Sexual orientation’ includes homosexuality, 12 heterosexuality, and bisexuality. 13 ‘‘(bb) ‘Gender identity’ means the gender-related 14 identity, appearance, mannerisms, or other gender-related 15 characteristics of an individual, regardless of the individ- 16 ual’s designated sex at birth.’’. 17 (b) BONA FIDE FACTOR DEFENSE AND MODIFICA- 18 TION OF SAME ESTABLISHMENT REQUIREMENT.—Section 19 6(d)(1) of the Fair Labor Standards Act of 1938 (29 20 U.S.C. 206(d)(1)) is amended— 21 (1) by striking ‘‘No employer having’’ and in- 22 serting ‘‘(A) No employer having’’; 23 (2) by striking ‘‘the opposite’’ and inserting 24 ‘‘another’’; 25 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 3 HR 7 PCS (3) by striking ‘‘any other factor other than 1 sex’’ and inserting ‘‘a bona fide factor other than 2 sex, such as education, training, or experience’’; and 3 (4) by inserting at the end the following: 4 ‘‘(B) The bona fide factor defense described in 5 subparagraph (A)(iv) shall apply only if the em- 6 ployer demonstrates that such factor (i) is not based 7 upon or derived from a sex-based differential in com- 8 pensation; (ii) is job-related with respect to the posi- 9 tion in question; (iii) is consistent with business ne- 10 cessity; and (iv) accounts for the entire differential 11 in compensation at issue. Such defense shall not 12 apply where the employee demonstrates that an al- 13 ternative employment practice exists that would 14 serve the same business purpose without producing 15 such differential and that the employer has refused 16 to adopt such alternative practice. 17 ‘‘(C) For purposes of subparagraph (A), em- 18 ployees shall be deemed to work in the same estab- 19 lishment if the employees work for the same em- 20 ployer at workplaces located in the same county or 21 similar political subdivision of a State. The pre- 22 ceding sentence shall not be construed as limiting 23 broader applications of the term ‘establishment’ con- 24 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 4 HR 7 PCS sistent with rules prescribed or guidance issued by 1 the Equal Employment Opportunity Commission.’’. 2 (c) NONRETALIATION PROVISION.—Section 15 of the 3 Fair Labor Standards Act of 1938 (29 U.S.C. 215) is 4 amended— 5 (1) in subsection (a)— 6 (A) in paragraph (3), by striking ‘‘em- 7 ployee has filed’’ and all that follows and insert- 8 ing ‘‘employee— 9 ‘‘(A) has made a charge or filed any com- 10 plaint or instituted or caused to be instituted 11 any investigation, proceeding, hearing, or action 12 under or related to this Act, including an inves- 13 tigation conducted by the employer, or has tes- 14 tified or is planning to testify or has assisted or 15 participated in any manner in any such inves- 16 tigation, proceeding, hearing or action, or has 17 served or is planning to serve on an industry 18 committee; 19 ‘‘(B) has opposed any practice made un- 20 lawful by this Act; or 21 ‘‘(C) has inquired about, discussed, or dis- 22 closed the wages of the employee or another 23 employee (such as by inquiring or discussing 24 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 5 HR 7 PCS with the employer why the wages of the em- 1 ployee are set at a certain rate or salary);’’; 2 (B) in paragraph (5), by striking the pe- 3 riod at the end and inserting ‘‘; or’’; and 4 (C) by adding at the end the following: 5 ‘‘(6) to require an employee to sign a contract 6 or waiver that would prohibit the employee from dis- 7 closing information about the employee’s wages.’’; 8 and 9 (2) by adding at the end the following: 10 ‘‘(c) Subsection (a)(3)(C) shall not apply to instances 11 in which an employee who has access to the wage informa- 12 tion of other employees as a part of such employee’s essen- 13 tial job functions discloses the wages of such other employ- 14 ees to individuals who do not otherwise have access to such 15 information, unless such disclosure is in response to a 16 complaint or charge or in furtherance of an investigation, 17 proceeding, hearing, or action under section 6(d), includ- 18 ing an investigation conducted by the employer. Nothing 19 in this subsection shall be construed to limit the rights 20 of an employee provided under any other provision of 21 law.’’. 22 (d) ENHANCED PENALTIES.—Section 16(b) of the 23 Fair Labor Standards Act of 1938 (29 U.S.C. 216(b)) is 24 amended— 25 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 6 HR 7 PCS (1) by inserting after the first sentence the fol- 1 lowing: ‘‘Any employer who violates section 6(d), or 2 who violates the provisions of section 15(a)(3) in re- 3 lation to section 6(d), shall additionally be liable for 4 such compensatory damages, or, where the employee 5 demonstrates that the employer acted with malice or 6 reckless indifference, punitive damages as may be 7 appropriate, except that the United States shall not 8 be liable for punitive damages.’’; 9 (2) in the sentence beginning ‘‘An action to’’, 10 by striking ‘‘the preceding sentences’’ and inserting 11 ‘‘any of the preceding sentences of this subsection’’; 12 (3) in the sentence beginning ‘‘No employees 13 shall’’, by striking ‘‘No employees’’ and inserting 14 ‘‘Except with respect to class actions brought to en- 15 force section 6(d), no employee’’; 16 (4) by inserting after the sentence referred to 17 in paragraph (3), the following: ‘‘Notwithstanding 18 any other provision of Federal law, any action 19 brought to enforce section 6(d) may be maintained 20 as a class action as provided by the Federal Rules 21 of Civil Procedure.’’; and 22 (5) in the sentence beginning ‘‘The court in’’— 23 (A) by striking ‘‘in such action’’ and in- 24 serting ‘‘in any action brought to recover the li- 25 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 7 HR 7 PCS ability prescribed in any of the preceding sen- 1 tences of this subsection’’; and 2 (B) by inserting before the period the fol- 3 lowing: ‘‘, including expert fees’’. 4 (e) ACTION BY THE SECRETARY.—Section 16(c) of 5 the Fair Labor Standards Act of 1938 (29 U.S.C. 216(c)) 6 is amended— 7 (1) in the first sentence— 8 (A) by inserting ‘‘or, in the case of a viola- 9 tion of section 6(d), additional compensatory or 10 punitive damages, as described in subsection 11 (b),’’ before ‘‘and the agreement’’; and 12 (B) by inserting before the period the fol- 13 lowing: ‘‘, or such compensatory or punitive 14 damages, as appropriate’’; 15 (2) in the second sentence, by inserting before 16 the period the following: ‘‘and, in the case of a viola- 17 tion of section 6(d), additional compensatory or pu- 18 nitive damages, as described in subsection (b)’’; and 19 (3) in the third sentence, by striking ‘‘the first 20 sentence’’ and inserting ‘‘the first or second sen- 21 tence’’. 22 (f) ENFORCEMENT AUTHORITY.— 23 (1) IN GENERAL.—The Equal Opportunity Em- 24 ployment Commission shall carry out the functions 25 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 8 HR 7 PCS and authorities described in section 1 of Reorganiza- 1 tion Plan No. 1 of 1978 (92 Stat. 3781; 5 U.S.C. 2 App.) to enforce and administer the provisions of 3 section 6(d) of the Fair Labor Standards Act of 4 1938 (29 U.S.C. 206(d)), except that the Secretary 5 of Labor, through the Office of Federal Contract 6 Compliance Programs, may also enforce this provi- 7 sion with respect to Federal contractors, Federal 8 subcontractors, and federally-assisted construction 9 contractors, within the jurisdiction of the Office of 10 Federal Contract Compliance Programs under Exec- 11 utive Order No. 11246 (42 U.S.C. 2000e note; relat- 12 ing to equal employment opportunity) or a successor 13 Executive order. 14 (2) COORDINATION.—The Equal Opportunity 15 Employment Commission shall issue such regula- 16 tions as may be necessary to explain and implement 17 the standards of such section 6(d). The Secretary of 18 Labor may issue regulations to govern procedures 19 for enforcement of section 6(d) by the Office of Fed- 20 eral Contract Compliance Programs. The Secretary 21 of Labor and the Equal Employment Opportunity 22 Commission shall establish other coordinating mech- 23 anisms as may be necessary. 24 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 9 HR 7 PCS SEC. 3. TRAINING. 1 The Equal Employment Opportunity Commission 2 and the Secretary of Labor, acting through the Office of 3 Federal Contract Compliance Programs, subject to the 4 availability of funds appropriated under section 11, shall 5 provide training to employees of the Commission and the 6 Office of Federal Contract Compliance Programs and to 7 affected individuals and entities on matters involving dis- 8 crimination in the payment of wages. 9 SEC. 4. NEGOTIATION SKILLS TRAINING. 10 (a) NEGOTIATION BIAS TRAINING.— 11 (1) IN GENERAL.—The Secretary of Labor shall 12 establish a program to award contracts and grants 13 for the purpose of training employers about the role 14 that salary negotiation and other inconsistent wage 15 setting practices can have on allowing bias to enter 16 compensation. 17 (2) TRAINING TOPICS.—Each training program 18 established using funds under section (a) shall in- 19 clude an overview of how structural issues may 20 cause inequitable earning and advancement opportu- 21 nities for women and people of color and assist em- 22 ployers in examining the impact of a range of prac- 23 tices on such opportunities, including— 24 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 10 HR 7 PCS (A) self-auditing to identify structural 1 issues that allow bias and inequity to enter 2 compensation; 3 (B) recruitment of candidates to ensure di- 4 verse pools of applicants; 5 (C) salary negotiations that result in simi- 6 larly qualified workers entering at different 7 rates of pay; 8 (D) internal equity among workers with 9 similar skills, effort, responsibility and working 10 conditions; 11 (E) consistent use of market rates and in- 12 centives driven by industry competitiveness; 13 (F) evaluation of the rate of employee 14 progress and advancement to higher paid posi- 15 tions; 16 (G) work assignments that result in great- 17 er opportunity for advancement; 18 (H) training, development and promotion 19 opportunities; 20 (I) impact of mid-level or senior level hir- 21 ing in comparison to wage rates of incumbent 22 workers; 23 (J) opportunities to win commissions and 24 bonuses; 25 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 11 HR 7 PCS (K) performance reviews and raises; 1 (L) processes for adjusting pay to address 2 inconsistency and inequity in compensation; and 3 (M) other topics that research identifies as 4 a common area for assumptions, bias and in- 5 equity to impact compensation. 6 (b) PROGRAM AUTHORIZED.— 7 (1) IN GENERAL.—The Secretary of Labor, 8 after consultation with the Secretary of Education, 9 is authorized to establish and carry out a grant pro- 10 gram. 11 (2) GRANTS.—In carrying out the program, the 12 Secretary of Labor may make grants on a competi- 13 tive basis to eligible entities to carry out negotiation 14 skills training programs for the purposes of address- 15 ing pay disparities, including through outreach to 16 women and girls. 17 (3) ELIGIBLE ENTITIES.—To be eligible to re- 18 ceive a grant under this subsection, an entity shall 19 be a public agency, such as a State, a local govern- 20 ment in a metropolitan statistical area (as defined 21 by the Office of Management and Budget), a State 22 educational agency, or a local educational agency, a 23 private nonprofit organization, or a community- 24 based organization. 25 VerDate Sep 11 2014 23:15 Apr 20, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7.PCS H7 pamtmann on DSKBC07HB2PROD with BILLS 12 HR 7 PCS (4) APPLICATION.—To be eligible to receive a 1 grant under this subsection, an entity shall submit 2 an application to the Secretary of Labor at such 3 time, in such manner, and containing such informa- 4 tion as the Secretary of Labor may require. 5 (5) USE OF FUNDS.—An entity that receives a 6 grant under this subsection shall use the funds made 7 available through the grant to carry out an effective 8 negotiation skills training program for the purposes 9 described in paragraph (2). 10 (c) INCORPORATING TRAINING INTO EXISTING PRO- 11 GRAMS.—The Secretary of Labor and the Secretary of 12 Education shall issue regulations or policy guidance that 13 provides for integrating the negotiation skills training, to 14 the extent practicable, into programs authorized under— 15 (1) in the case of the Secretary of Education, 16 the Elementary and Secondary Education Act of 17 1965 (20 U.S.C. 6301 et seq.), the Carl D. Perkins 18 Career and Technical Education Act of 2006 (20 19 U.S.C. 2301 et seq.), the Higher Education Act of 20 1965 (20 U.S.C. 1001 [Text truncated for display. Full text available on Congress.gov.]