Equal pay for equal work has long been a topic of concern in the fight for gender equality. In Pennsylvania, significant strides are being taken to address this issue as the state legislature contemplates measures to expand the state Equal Pay Law and the Pennsylvania Human Relations Act (PHRA).
The proposed changes seek to redefine the concept of “equal work” and provide a framework for employers to justify pay differentials based on legitimate factors. Continue reading to explore the latest developments surrounding this important legislation and discuss its potential impact on employers and employees.
Expanding The Scope: Senate Bill 36
At the forefront of these developments is Senate Bill 36, currently under review by the state legislature’s Labor and Industry Committee. This bill aims to broaden the existing Equal Pay Law by replacing the term “equal work” with “comparable work.” While this change may seem subtle, it introduces the complex challenge of defining what constitutes “comparable work.”
To address this challenge, the amendment defines comparable work as work that shares substantial similarities in terms of skill, effort, responsibility, and working conditions. In addition, the legislation clarifies that job titles or descriptions alone should not be the sole determinant of comparability.
Protecting Employers: The Bona Fide Factor Defense
Recognizing that pay differentials can arise from various legitimate factors, the proposed legislation introduces the “bona fide factor defense.” Employers can utilize this defense if they can demonstrate the following:
- The wage differential is based on a bona fide seniority system, merit system, a system that measures earning by quantity or quality of production or sales, or factors other than sex, such as education, training, or experience.
- Each factor relied upon is reasonably applied
- One or more factors accounted for the entire wage differential
However, it’s crucial to note that the bona fide factor defense is available only if the employer can prove that it is job-related, consistent with business necessity, and not derived from a sex-based differential in compensation. This legislation defines “business necessity” as a legitimate business purpose that effectively fulfills the intended purpose, and the defense will not be applicable if an alternative practice can serve the same purpose without creating a wage differential.
Challenges And Considerations For Business Owners
While the proposed legislation aims to address pay equity concerns, it also presents challenges for employers. The focus on job titles and responsibilities as insufficient factors for determining comparability may require employers to scrutinize pay differentials within single job titles. This could result in an influx of claims requiring employers to justify their pay practices before the Pennsylvania Human Relations Commission.
Should this bill become law, employers with employees in Pennsylvania will need to adapt and establish mechanisms to justify their pay differentials. Proactively addressing potential disparities and ensuring that pay decisions are based on legitimate factors will be crucial for compliance and maintaining a fair and inclusive work environment.
How A PEO Can Support Pennsylvania Business Owners
As Pennsylvania’s legislature considers expanding the state Equal Pay law and the PHRA, businesses must be prepared to navigate potential challenges and ensure compliance with evolving regulations. However, a professional employer organization (PEO) like GMS can assist business owners in Pennsylvania. We provide comprehensive HR solutions, including expert guidance on pay equity and ensuring compliance with the amended legislation. By partnering with GMS, business owners can navigate the complexities of the law while maintaining a fair and inclusive work environment. With GMS by your side, Pennsylvania business owners can confidently face the future and focus on what they do best – growing their businesses and supporting employees. Contact our HR experts today to learn more about how we can help your business.