MODEL BILLS

Fair Pay Act

Summary: The Fair Pay Act prohibits wage discrimination between equivalent jobs.

SECTION 1. SHORT TITLE

This Act shall be called the “Fair Pay Act.”

SECTION 2. FINDINGS AND PURPOSE

(A) FINDINGS—The [legislature/council/commission] finds that:

1. Despite federal and state laws that ban discrimination in pay in both the public and private sectors, wage differentials persist between women and men and between minorities and non-minorities in the same jobs, and in jobs that require equivalent composites of skill, effort, responsibility and working conditions.

2. The existence of such wage differentials depresses wages and living standards; reduces family incomes, contributing to higher poverty rates experienced by female-headed and minority households; prevents the maximum utilization of available labor resources; tends to cause labor disputes, thereby burdening and obstructing commerce; constitutes an unfair method of competition; and [insert a jurisdiction-specific finding, e.g., “constitutes an unfair labor practice under state law or violates the state’s public policy against discrimination.”]

3. Discrimination in wage-setting practices has played a role in depressing wages of women and minorities.

4. Many occupations are dominated by individuals of the same sex, race or national origin, and discrimination in hiring, job assignment, and promotion has played a role in establishing and maintaining segregated workforces.

5. Eliminating discrimination in compensation based on sex, race or national origin would have many positive effects, including providing a solution to problems in the economy created by discriminatory wage differentials; reducing the number of working women and people of color who earn low wages, thereby lowering their incidence of poverty during normal working years and in retirement; and promoting stable families by raising family incomes.

(B) PURPOSE—It is the purpose of this Act to correct—and as rapidly as practicable, to eliminate—discriminatory wage practices based on sex, race or national origin.

SECTION 3. FAIR PAY

After section XXX, the following new section XXX shall be inserted:

(A) DEFINITIONS—In this section:

1. “Employer” means [cite existing definition in state employment law].

2. “Employee” includes any permanent full-time or part-time employee and any temporary employee who has worked for a period of at least three months. “Employee” shall not include any individual employed by his or her parents, spouse or child.

3. “Equivalent jobs” means jobs or occupations that are equal within the meaning of the Equal Pay Act of 1963, 29 U.S.C. 206(d), or jobs or occupations that are dissimilar but whose requirements are equivalent, when viewed as a composite of skill, effort, responsibility and working conditions.

4. “Person” means an individual, partnership, association, corporation or other legal entity, including the state and all of its political agencies and subdivisions.

5. “Labor organization” means any organization that exists for the purpose, in whole or in part, of collective bargaining, or of dealing with employers concerning grievances, terms or conditions of employment, or of other mutual aid or protection in connection with employment.

6 “Market rates” means the rates that employers within a prescribed geographic area actually pay, or are reported to pay for specific jobs, as determined by formal or informal surveys, wage studies, or other means.

7. “Wages and wage rates” shall include all compensation in any form that an employer provides to employees in payment for work done or services rendered, including but not limited to base pay, bonuses, commissions, awards, tips, or various forms of non-monetary compensation, if provided in lieu of or in addition to monetary compensation, and that have economic value to an employee.

(B) PROHIBITION AGAINST DISCRIMINATION IN WAGES

1. It shall be an unlawful employment practice, in violation of this section, for an employer to discriminate between employees on the basis of sex, race or national origin by:

a. Paying wages to employees at a rate less than the rate paid to employees of the opposite sex, or of a different race or national origin, for work in equivalent jobs; or

b. Paying wages to employees in a job that is dominated by employees of a particular sex, race or national origin at a rate less than the rate at which such employer pays to employees in another job that is dominated by employees of the opposite sex, or of a different race or national origin, for work on equivalent jobs.

2. It shall not be an unlawful employment practice for an employer to pay different wage rates to employees where such payments are made pursuant to:

a. A bona fide seniority or merit system;

b. A system that measures earnings by quantity or quality of production; or

c. Any bona fide factor other than sex, race or national origin, provided that wage differentials based on varying market rates for equivalent jobs, or the differing economic benefits to the employer of equivalent jobs, shall not be considered differentials based on bona fide factors other than sex, race or national origin.

3. An employer who pays wages in violation of this section shall not, in order to comply with the provisions of this section, reduce the wages of any employee.

4. No labor organization, or agents that represent employees of an employer that is subject to any provision of this section, shall cause or attempt to cause such an employer to discriminate against an employee in violation of this section.

5. The [State Department of Labor or other appropriate agency] shall promulgate regulations that specify the criteria for determining whether a job is dominated by employees of a particular sex, race or national origin. Criteria shall include, but not be limited to, factors such as whether the job has ever been formally classified as, or traditionally considered to be, a “male” or “female” or “white” or “minority” job; whether there is a history of discrimination against women or people of color with regard to wages, assignments or access to jobs, or other terms and conditions of employment; and the demographic composition of the workforce in equivalent jobs (e.g., numbers or percentages of women, men, white persons, and people of color). The regulations shall not include a list of jobs.

(C) OTHER PROHIBITED ACTS

It shall be an unlawful employment practice in violation of this section for an employer:

1. To take adverse actions or otherwise discriminate against any individual because such individual has opposed any act or practice made unlawful by this section; has sought to enforce rights protected under this section; or has testified, assisted or participated in any manner in an investigation, hearing or other proceeding to enforce this section; or

2. To discharge, or in any other manner discriminate against, coerce, intimidate, threaten or interfere with any employee or any other person because an employee inquired about, disclosed, compared or otherwise discussed an employee’s wages, or because an employee exercised, aided or encouraged any other person to exercise any right granted or protected by this section.

(D) WAGE DISCLOSURE, RECORDKEEPING AND REPORTING REQUIREMENTS

1. Upon commencement of an individual’s employment, and at least annually thereafter, every employer subject to this section shall provide to each employee a written statement sufficient to inform the employee of his or her job title, wage rate, and how the wage is calculated. This notice shall be supplemented whenever an employee is promoted or reassigned to a different position with the employer, provided that the employer is not required to issue supplemental notifications for temporary reassignments that are of no more than three months in duration.

2. Every employer subject to this section shall make and preserve records that document the wages paid to employees, and that document and support the method, system, calculations and other bases used to establish, adjust and determine the wage rates paid to said employer’s employees. Every employer subject to this section shall preserve records and make reports from the records as shall be prescribed by the [State Department of Labor or other appropriate agency].

3. The regulations promulgated under this section relating to the form of reports required shall provide for protection of the confidentiality of employees, and shall expressly require that reports shall not include the names or other identifying information from which readers could discern the identities of employees. The regulations may also identify circumstances that warrant a prohibition on disclosure of reports or information identifying the employer.

4. The [State Department of Labor] may use the information and data it collects pursuant to this section for statistical and research purposes, and may compile and publish such studies, analyses, reports and surveys, based on the information and data, as it considers appropriate.

(E) ENFORCEMENT

1. This section may be enforced by a private cause of action under [appropriate section of state law].

2. This section shall be enforced by [appropriate government agency], which shall promulgate such regulations as are necessary to implement and administer compliance. Regulations shall include procedures to receive, investigate and attempt to resolve complaints, and to bring actions in any court of competent jurisdiction to recover appropriate relief for aggrieved employees.

3. In any action under this section in which an employee prevails:

a. The employee shall be awarded monetary relief, including back pay in an amount equal to the difference between the employee’s actual earnings and what the employee would have earned but for the employer’s unlawful practices, and an additional amount in punitive damages as appropriate.

b. The employer shall be enjoined from continuing to discriminate against employees, and the employer may be ordered to take such additional affirmative steps as are necessary, including reinstatement or reclassification of affected workers, to ensure an end to unlawful discrimination.

c. The employer shall pay a reasonable attorney’s fee, reasonable expert witness fees, and other costs of the action.

(F) STATUTE OF LIMITATIONS

An action may be brought under this section not later than two years after the date of the last event constituting the alleged violation for which the action is brought.

SECTION 4. SEVERABILITY

The provisions of this Act shall be severable, and if any phrase, clause, sentence or provision is declared to be invalid or is preempted by federal law or regulation, the validity of the remainder of this Act shall not be affected.

SECTION 5. EFFECTIVE DATE

This Act shall take effect on July 1, 20XX.