Legislative Memo: Regarding Strengthening Laws Requiring Equal Pay for Equal Work

April 21, 2015

A.6075 (Titus) / S.001 (Savino)

Position: SUPPORT

When the Equal Pay Act of 1963 became federal law, women earned just 59 cents for each dollar earned by men.¹  In the intervening half-century, women have made sure strides toward equality in the workplace – but even now, women in New York earn only 86% of what men earn,²  and jobs traditionally held by women still pay significantly less than those traditionally held by men.³

This wage gap is more pronounced for African-American and Hispanic women, who earn just 66% and 55% of that earned by white non-Hispanic men in New York, respectively.⁴  Further, for women who do not know how much their male colleagues earn, it is extremely difficult to determine whether pay discrimination is an issue – and 61% of private sector employees in the United States report they are either discouraged or outright prohibited from discussing wage and salary information.⁵

In light of unsuccessful efforts to update the federal Equal Pay Act,⁶  states have begun to take the lead on fair pay in the workplace – and nearly nine in ten New Yorkers agree that it is time for New York to be a leader in this area.⁷

A.6075/S.001 will ensure that New York employers can no longer cloak gender-related pay disparities by justifying them on other grounds. The bill would also make it harder for employers to keep employees in the dark on pay policies, and, in proven wage discrimination cases, would provide for stronger penalties more proportionate to the violation. The New York Civil Liberties Union strongly supports this measure.

The legislation would make three important changes to New York’s Labor Law. First, A.6075/S.001 would close a loophole in New York’s equal pay law that allows employers to justify unequal pay practices. Under existing law, when a wage discrimination claim is made, employers may use a broad affirmative defense to justify differentials in pay as being due to “any other factor other than sex.”⁸

The bill would amend the labor law to narrow the defense to “a bona fide factor other than sex” that is neither based on nor derived from a sex-based wage differential, and is both job-related and consistent with “business necessity.”⁹  In addition, under existing law, male and female employees must be paid the same wage only if they work at precisely the same physical location – the bill would clarify that equal pay principles should apply to employees who work for the same employer at different sites within the same geographical region.

Second, A.6075/S.001 would outlaw wage secrecy policies in the workplace. Workplace wage secrecy provides cover for discriminatory pay policies by making it difficult or impossible for employees to compare their own pay to that of a similarly positioned colleague – in the well-known case of Lily Ledbetter, for example, a company policy of wage secrecy prevented discovery of pay discrimination for nearly a decade.¹⁰

To put a stop to this, the bill would appropriately balance employees’ access to information with business needs, establishing that employers may not “prohibit an employee from inquiring about, discussing, or disclosing the wages” of an employee, but allowing employers to establish reasonable limitations on inquiries, discussion, or disclosure, including prohibiting employees from discussing or disclosing the wages of another employee without that employee’s permission.¹¹

And finally, in cases where an employee successfully proves that an employer has willfully violated New York’s equal pay law, A.6075/S.001 would allow for increased damages up to triple the amount of unpaid wages.¹²  Existing law allows prevailing employees to recover up to the full amount of the unpaid wages they were lawfully entitled to – but this may not remedy an employee’s true losses, or motivate a resistant employer to ensure equal pay in the workplace.

Women who experience wage discrimination stand to lose much more than just the simple difference in pay over time; related economic losses, such as benefits and increases pegged to salary, can add up – as well as other losses that may be harder to measure, such as the costs of opportunities forgone as unaffordable. Permitting higher damages in the most serious cases will help women recover their losses in a more meaningful way, and encourage employers to take action when they realize that a disparity exists.

New York women work hard to support themselves and their families, and existing protections simply do not go far enough to combat the serious problem of wage discrimination. A.6075/S.001 would close loopholes in our state’s equal pay law, allow for the shedding of much-needed daylight on workplace pay policies, and provide meaningful recourse for employees who experience willful wage discrimination – all while balancing the interests of businesses and employers. For these reasons, the New York Civil Liberties Union strongly urges passage of A.6075/S.001.

1 National Committee on Pay Equity, The Wage Gap Over Time (Sept. 2011), available at http://www.pay-equity.org/info-time.html.

2 National Partnership for Women, New York Women and the Wage Gap (Oct. 2014), available at http://www.nationalpartnership.org/research-library/workplace-fairness/f… (citing U.S. Census Bureau, American Community Survey 1-Year Estimates 2013, Table B20017 (2014), available at http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview…..

3 Christianne Corbett & Catherine Hill, American Ass’n of University Women, Graduating to a Pay Gap (Oct. 2012) at 15-17, available at http://www.aauw.org/files/2013/02/graduating-to-a-pay-gap-the-earnings-o… (citing statistics gathered from U.S. Dep’t of Education, National Ctr. for Education Statistics; U.S. Dep’t of Commerce, U.S. Census Bureau, American FactFinder; and U.S. Dep’t of Labor, Bureau of Labor Statistics).

4 National Women’s Law Center, The Wage Gap: State by State (Oct. 2014), available at http://www.nwlc.org/wage-gap-state-state (citing U.S. Census Bureau, American Community Survey (2013), available at http://www.census.gov/acs/www/.

5 Institute for Women’s Policy Research, Pay Secrecy and Paycheck Fairness: New Data Shows Pay Transparency Needed (Nov. 2010), available at www.iwpr.org/press-room/press-releases/pay-secrecy-and-paycheck-fairness….

6 See, e.g., 113th U.S. Congress, Paycheck Fairness Act of 2014 (S.2199 Mikulski), cloture motion rejected Sep. 15, 2014; S.001/A.6075 mirrors the federal Paycheck Fairness Act legislation.

7 53 percent of voters believe equal pay for women should be the “highest priority” for Gov. Cuomo and the State Legislature, and another 36 percent say it should be a “high priority.” Quinnipiac University Polling Institute, Equal Pay for Women Has Most Support in New York, Quinnipiac University Poll Finds (Jan. 2013), available at http://www.quinnipiac.edu/images/polling/ny/ny01312013.pdf.

8 N.Y. Labor Law § 194. See, e.g., Wheeler v. Citizens Telecommunications Co. of N.Y., Inc., 795 N.Y.S.2d 370 (3rd Dep’t 2005) (appropriate non-discriminatory factors supporting pay differential included superior education, more experience in sales and management, and salary level at prior job); Lavin-McEleney v. Marist College, 239 F.3d 476, 478 (2nd Cir. 2001) (neutral factors included rank, years of service, division, tenure status, and degrees earned).

9 A.6075/S.001, § 1.

10 See Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 649-50 (2007) (Ginsburg, J., dissenting) (“[A female employee] may have little reason even to suspect discrimination until a pattern develops incrementally and she ultimately becomes aware of the disparity.”).

11 A.6075/S.001, § 1.

12 A.6075/S.001, § 2.