Written by
Vicky Peakman
HR and Gender Pay Gap Consultant, CURO
LinkedIn

31 May 2021

Governments around the globe are focusing on the pandemic, as they should be, yet gender pay equity legislation is still hitting the headlines worldwide. We've broken down the recent pay legislation updates below, including: 

  • Increased causes of action due to the Paycheck Accrual Rule 
  • The introduction of the Paycheck Fairness Act and American Families Plan 
  • A proposal for increased pay transparency and pay equity tools for workers' rights 
  • The introduction of Equal Remuneration for Work of Equal Value legislation

Increased Causes of Action Due to the Paycheck Accrual Rule (US)

In January, a US Court of Appeals clarified that there is no statute of limitations for evidence of pay discrimination. This stems from the Lily Ledbetter Fair Pay Act applying to the Equal Pay Act. Despite the evidence being at the point of hire, 12 years before the discrimination claim, it was found to be allowable due to the ‘paycheck accrual rule’. This rule means that a “new cause of action for pay discrimination arises every time a plaintiff receives a paycheck resulting from an earlier discriminatory compensation practice”. Organizations must therefore be vigilant both to inequity occurring at each point a pay decision is made, and to whether there is any reason to believe that pay discrimination has occurred in past decisions.

Introduction of the Paycheck Fairness Act and American Families Plan (US)

In April, the US House of Representatives passed the Paycheck Fairness Act, which aims to close loopholes in current legislation and introduce salary history bans and new reporting requirements. In a statement, President Biden applauded the House of Representatives for passing the Act and urged the Senate to follow suit. Organizations should be considering what this act means for them and begin preparing for it.

Last week, President Biden announced the American Families Plan, which includes provisions to help with some aspects of working lives that lead to pay inequity. It includes help with childcare costs so parents can have the choice to continue working, and the provision of paid parental and family leave, for which the US has lagged behind its economic competitors. The legislation still needs to be drafted and negotiated by the House of Representatives before moving on to the Senate and being passed into law, but it gives an indication of the scope of Biden’s ambitions to ‘build back better’.


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Proposal for Increased Pay Transparency and Pay Equity Tools for Workers’ Rights (EU)

The US isn’t alone in pressing forward with gender pay legislation. The EU presented a proposal in March that aims to increase pay transparency and strengthen the pay equity tools for workers to claim their rights. The President of the European Commission, Ursula von der Leyen, said: “Equal work deserves equal pay. And for equal pay, you need transparency.” The proposals include: the right to information on pay prior to employment, salary history bans, the right to request pay information, pay gap reporting on the pay gap for employers with at least 250 employees, and joint pay assessments on pay gaps above 5% that cannot be justified. The gender pay legislation also proposes that the burden of proof is on the employer to show that there is no discrimination in relation to pay - rather that the worker proving that there is discrimination. This proposal will need to be approved by the European Parliament and Council, after which member states have two years to adopt the directive into national law.

 

Introduction of Equal Remuneration for Work of Equal Value Legislation (International)

The World Bank’s Women, Business and the Law 2021 report states that, despite the global pandemic, three countries introduced new ‘equal remuneration for work of equal value’ legislation during the previous year to October 2020. This brings the total number of countries with such legislation to 90 out of 190 measured. The index measures the law and regulations that restrict women’s economic inclusion and correlates with the World Economic Forum’s Global Gender Gap Index. This suggests that “where women face less discrimination.., greater progress has been made in closing gender gaps in opportunities and outcomes”.

 

Moving Forward in Gender Equality and Equal Pay

The push for gender equality - and equal pay - around the globe continues and the pandemic has only highlighted those inequalities. It can be expected that new pay equity legislation will continue to be announced and organizations should be prepared for it.

 

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