Last week, the Senate Committee on Health, Education, Labor and Pensions held hearings on the proposed Paycheck Fairness Act. The PFA would amend the Equal Pay Act to provide plaintiffs with sweeping new claims in gender discrimination lawsuits. The PFA's supporters state that the Act is necessary due to the continuing gender gap in compensation throughout many sectors of the U.S. workforce.

Under current interpretations of the EPA, employees who claim that their salaries are negatively affected by gender must show comparisons to employees of the different gender with jobs that are the same or very close to their own. The PFA would allow plaintiffs in equal pay claims to demonstrate gender bias through comparison to employees in different roles in other parts of the company. This would create a "comparable worth" standard that would require employers to justify why different jobs are compensated on a different basis.

The PFA would allow employers to defend their salary structure through a business necessity defense, but that defense would be very narrow. Employers would have to prove that there is no reasonable way to accomplish their business goals other than by paying the different positions different salaries. Any alternative means demonstrated to reach those goals would defeat this defense. Market demand for different jobs, and resulting salary differences would not be a clear defense to a PFA claim. The bill also contains a provision that would prohibit employers from disciplining employees for discussing or comparing their compensation.

If enacted, the PFA would require federal courts to act as compensation referees, making judgments about the inherent value of services provided by different positions within a company. Employers would need to be extremely careful about their establishment of compensation systems, and documentation of reasons why one job pays more than another.

Last year, the PFA easily passed the House, but died in the Senate when its critics described the bill as both a job killer and an invitation to increased labor litigation. Proponents, including the Obama administration and the EEOC appear poised to make another run at passing the legislation.