COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES
HOUSE LABOR AND INDUSTRY COMMITTEE HEARING
STATE CAPITOL ROOM G-50, IRVIS OFFICE BUILDING HARRISBURG, PENNSYLVANIA
THURSDAY, SEPTEMBER 18, 2014 9:30 A.M.
IN RE: HOUSE BILL 1890
BEFORE:
HONORABLE WILLIAM F. KELLER, MINORITY CHAIRMAN HONORABLE M. SHERYL DELOZIER HONORABLE MARK M. GILLEN HONORABLE GREGORY S. LUCAS HONORABLE RYAN E. MACKENZIE HONORABLE MARIA P. DONATUCCI HONORABLE PATRICK J. HARKINS HONORABLE PAM SNYDER
ALSO IN ATTENDANCE:
HONORABLE VANESSA BROWN HONORABLE ERIN MOLCHANY HONORABLE BRIAN SIMS
————————— JEAN DAVIS REPORTING 285 EAST MANSION ROAD • HERSHEY, PA 17033 Phone (717)503-6568 1 COMMITTEE STAFF PRESENT:
2 NOAH KARN, RESEARCH ANALYST LABOR AND INDUSTRY COMMITTEE (R) 3 JUANITA HOFFMAN, LEGISLATIVE ASSISTANT II LABOR AND INDUSTRY COMMITTEE (R) 4 JOANNE MANGANELLO, EXECUTIVE DIRECTOR LABOR AND INDUSTRY COMMITTEE (D) 5
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14 JEAN M. DAVIS, REPORTER 15 NOTARY PUBLIC
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2 TESTIFIERS
3 NAME PAGE 4 CARYN HUNT, PRESIDENT, PENNSYLVANIA NATIONAL 12 5 ORGANIZATION FOR WOMEN, (NOW)
6 SUSAN FRIESTSCHE, ESQUIRE, STAFF ATTORNEY, 19 WOMEN'S LAW PROJECT 7 DOT McLANE, Ph.D, PRESIDENT, AMERICAN 25 8 ASSOCIATION OF UNIVERSITY WOMEN (AAUW) PENNSYLVANIA 9 DEBORAH D. VEREEN, CCDP/AP, PRESIDENT, 30 10 THE VEREEN GROUP
11 ALEX HALPER, DIRECTOR, GOVERNMENT AFFAIRS 63 PENNSYLVANIA CHAMBER OF BUSINESS AND INDUSTRY 12 NEAL LESHER, LEGISLATIVE DIRECTOR, NATIONAL 70 13 FEDERATION OF INDEPENDENT BUSINESS (NFIB) PENNSYLVANIA 14 ELIZABETH MILITO, ESQUIRE, EXECUTIVE 74 15 COUNSEL, NFIB SMALL BUSINESS LEGAL CENTER
16 WRITTEN TESTIMONY RECEIVED FROM: J. SCOTT ROBINETTE, DEPUTY SECRETARY FOR 97 17 SAFETY AND LABOR-MANAGEMENT RELATIONS, PENNSYLVANIA DEPARTMENT OF LABOR & INDUSTRY 18 JANICE FANNING MADDEN, PROFESSOR, 99 19 UNIVERSITY OF PENNSYLVANIA
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3 REPRESENTATIVE MACKENZIE: It's 9:30. I would
4 like to go ahead and call our committee to order.
5 And if we can all rise and start with the Pledge
6 of Allegiance, please.
7 (Pledge of Allegiance)
8 REPRESENTATIVE MACKENZIE: Well, thank you to
9 everyone who is joining us here today. We have a good
10 crowd. A number of members are here with us today.
11 Chairman Scavello would have liked to have joined us. He
12 has traveled back to the Northeast to attend the state
13 trooper's funeral that was held yesterday.
14 We will go ahead and start roll. If you can call
15 the roll, please.
16 (Roll call)
17 REPRESENTATIVE MACKENZIE: Great. Thank you.
18 Well, the purpose of today's hearing is to
19 discuss House Bill 1890 sponsored by Representative
20 Molchany. And we're going to actually start with the
21 Representatives, so if you would like to join us here. And
22 we're also being joined here by Representative Sims.
23 REPRESENTATIVE MOLCHANY: Thank you,
24 Mr. Chairman.
25 Good morning, Chairman Keller, Representative
4 1 Mackenzie -- Chairman Mackenzie, for today and my esteemed
2 colleagues.
3 I am State Representative Erin Molchany. And I
4 currently represent the 22nd Legislative District in this
5 General Assembly, which is the city of Pittsburgh and
6 Allegheny County.
7 I want to first take the opportunity to thank
8 everyone for being here today. I want to especially thank
9 Chairman Scavello for agreeing to hold this hearing. I
10 understand that he is not able to be here today because of
11 the tragic circumstances caused by cowardly acts. And I
12 want to also send my thoughts and prayers to Trooper
13 Douglass and to the families of Corporal Dickinson during
14 this difficult time.
15 I am honored to address this committee today as
16 the prime sponsor of House Bill 1890. More importantly,
17 however, is the privilege with which I am here today. I am
18 fortunate to be a woman working in a professional position
19 in which my salary is set in statute to the same amount as
20 all of my colleagues.
21 The legislation that I have introduced and the
22 conversation I hope to have at this hearing today is
23 intended to address the millions of women in this
24 Commonwealth who do not have the same protection.
25 Nationally and in our state, women are oftentimes
5 1 the primary breadwinners of households. Women graduate
2 with Bachelor's, Master's, and Doctorate degrees at a
3 higher rate than men. However, lacking more improved legal
4 protections than our current equal pay law offers, women
5 face pay discrimination every day.
6 No matter the study, year after year, our current
7 statute fails to solve the pervasive injustice of paying a
8 woman less for the same level and quality of work.
9 We have named House Bill 1890 the Workplace
10 Opportunity Act because the two central provisions of the
11 legislation are intended to level the playing field. No
12 one is here to radically institute unreasonable mandates or
13 regulations. Some may even point out that equal pay laws
14 exist and they need no adjustments or clarifications.
15 As I've learned in my first term in the House of
16 Representatives, laws are not always enforced at a level
17 which corrects the issue that they are intended to. And
18 sometimes we make laws that after years of enforcement have
19 significant unintended consequences.
20 House Bill 1890 seeks to take Pennsylvania's
21 existing pay law and close the remaining 23-cent to 10-cent
22 gap that still exists between what a woman makes for the
23 same work as her male counterparts. It seeks to clarify
24 the reasons for which an employer can pay someone a
25 different wage for the same work, that being education,
6 1 experience, or training. As of now, this is a gray area.
2 House Bill 1890 is also intended to offer
3 protection for workers who disclose their pay to a
4 coworker. The concept is simple. If you do not know that
5 you are being paid less for the same job and people are
6 prevented from telling you for fear that their employment
7 will be jeopardized, the inequity lingers.
8 Unfortunately, if the pay gap exists throughout a
9 20-year career, it can have a serious impact not only on a
10 woman's take-home pay but also retirement and pension
11 investments.
12 So what can we do about it? Today's hearing is
13 the first step in not just correcting the problem but also
14 making Pennsylvania a better place to live and work for all
15 of its residents.
16 Imagine if Pennsylvania became the model for all
17 states in respecting all of its workers and championing
18 equal pay for equal work. Imagine if we passed bills like
19 House Bill 1890 that could be the model for other states
20 grappling with the similar wage-quality issues.
21 Today you will hear testimony from business
22 leaders, legal experts, women's organizations, some of
23 which were around when the first equal pay laws were
24 drafted in the early 1960s. Who you will not hear from
25 today are the countless women who are currently battling
7 1 for pay equity in the courts, women who personally
2 experience pay inequality and who have had the courage to
3 fight back.
4 In most, if not all, cases, women who are
5 actively pursuing legal action against employers who do not
6 pay equally for equal work are either subject to gag orders
7 contingent upon their settlement or advised not to discuss
8 their case outside of court. While this is common, it
9 further exacerbates the issue of pay inequality if no one
10 is able to share their personal experiences.
11 So I again want to thank the Labor & Industry
12 Committee for taking up this important and often not
13 discussed issue of pay equity. As legislators we should
14 always be mindful of not only reacting to an issue and
15 creating laws to address it, but we should also be
16 proactively seeking to improve existing laws so they work
17 better for every Pennsylvanian.
18 I also want to take a minute and thank
19 Representative Donatucci who sits on this committee who has
20 also introduced House Bill 1250 in an effort to correct the
21 issue. I think that this is something that we all believe
22 Pennsylvania can really come together on in a non-partisan
23 way to make sure that everybody is respected in the
24 workplace.
25 Thank you.
8 1 REPRESENTATIVE MACKENZIE: Thank you.
2 Representative Sims.
3 REPRESENTATIVE SIMS: Thank you, Mr. Chairman,
4 Acting Chairman Mackenzie. And thank you to the members of
5 the committee for what I and the testifiers here today
6 believe to be a critical piece of legislation in combating
7 the illegal practice of pay inequity.
8 My name is Brian Sims. I'm a Representative in
9 the 182nd District in Center City, Philadelphia.
10 Coincidentally, it's the county in Pennsylvania that has
11 the lowest margin in the wage gap. I believe it's 83 cents
12 on a dollar.
13 Ultimately, what I hope you will all take away
14 from today's hearing is not the belief that we're trying
15 simply to pass a law to make paying women less than men
16 illegal. As all of you know, such laws have been on the
17 books in Pennsylvania for over 50 years.
18 Unfortunately, as you'll hear today, the law as
19 written has not been sufficient to combat pay inequity.
20 And what has occurred is a system in which paying an
21 employee less because of his or her gender is illegal. But
22 determining if that is actually happening may be impossible
23 or not occur in time to pursue an action.
24 The simple reality is that we as a Commonwealth
25 and the nation as a whole have been studying, analyzing,
9 1 and sometimes combating pay inequity for over a half
2 century. Local, state, and national studies exist today,
3 as they have for decades, across industries and
4 demographics of virtually every single measure.
5 Ultimately, for women and for opponents of pay
6 equity, those studies continue to tell us time and time
7 again that women are systematically driven to lower-paying
8 jobs, paid less in the same job for the same work, and are
9 prevented at all turns from gathering the right information
10 at the right time to bring a claim for pay discrimination.
11 What the Commonwealth needs, Mr. Chairman, is
12 what we all need, for women to be paid the same pay for the
13 same work with absolutely zero exemptions.
14 First, however, we need to stop employers from
15 presenting or punishing women for disclosing their
16 salaries. We need to remove the barriers preventing women
17 from learning if they're being paid less. In short, the
18 problem with the current law as written is that it simply
19 falls too far from its goal. It's as though we made murder
20 illegal but did not give the police the tools to study the
21 crime scene, analyze a motive, or even see a body until
22 years after the fact.
23 Simply making murder illegal hasn't stopped it
24 any more than making pay inequity illegal has. We have to
25 do more. We are not asking that the Legislature make it
10 1 illegal to pay women less. That's been illegal for longer
2 than I've been alive. What we're asking is that we stop
3 pretending that a law banning something will actually stop
4 it unless there are also discovery and enforcement
5 mechanisms in place.
6 I hope that you see from the testimony that will
7 be given this morning that we can do better and we must do
8 better. This legislation is a common-sense solution to an
9 insidious and decades-long problem. And I believe that we
10 have the ability and the duty to pass it.
11 Thank you very much.
12 REPRESENTATIVE MACKENZIE: Great. Thank you,
13 Representatives Molchany and Sims. I appreciate your
14 testimony today.
15 And, Representative Molchany, I want to thank you
16 for your leadership on this issue and for bringing this
17 bill before the committee today. Thank you.
18 REPRESENTATIVE MOLCHANY: Thank you.
19 REPRESENTATIVE MACKENZIE: All right. We have
20 our first panel with three presenters. We have Caryn Hunt
21 from Pennsylvania National Organization for Women; Susan
22 Frietsche, with the Women's Law Project; Dot McLane,
23 American Association of University Women Pennsylvania; and
24 Deborah Vereen, the Vereen Group.
25 If you could all please step forward and join us
11 1 here. Thank you for joining us. And if you'd like to
2 first start by introducing yourselves just so we know who's
3 who here.
4 MS. HUNT: Sure. I'm Caryn Hunt. I'm President
5 of the Pennsylvania State Chapter of the National
6 Organization for Women. I hail from South Philly from
7 Representative Keller's district. And I'm very, very glad
8 to be here and speak on behalf of my organization and also
9 on behalf of equal pay for equal work.
10 We are particularly in support of House Bill
11 1890. This bill would close loopholes in the existing law
12 and prevent pay secrecy which would give workers the tools
13 that they need to end pay discrimination. House Bill 1890
14 is part of the Pennsylvania agenda for women's health,
15 which Pennsylvania now also supports.
16 You are all aware of the statistics, the broad
17 statistics. The U.S. Census Bureau pegs women's wages at
18 77 cents against every dollar that a man makes. For women
19 of color, the pay gap is significantly greater.
20 African-American women are paid 64 cents, Latinos are paid
21 55 cents to every dollar earned by a white non-Hispanic
22 male. Now, the U.S. Bureau of Labor statistics measures
23 the gap in a different way. They look at weekly earnings.
24 And looked at that way, they find an average gap of 81
25 cents.
12 1 And both agencies have recently updated their
2 information to show improvement in 2013. But the point is
3 no matter how you measure it, there is a gap, and there has
4 been one for a very long time. Some states have a narrower
5 gap than others. Some industries have a narrower gap then
6 others. Union workers have a narrower gap than nonunion
7 workers.
8 Women of color labor under both gender and racial
9 discrimination. Working mothers and single moms,
10 especially single moms, pay an additional mommy penalty of
11 4 percent for each child they have.
12 Believe me when I tell you that these women who
13 are co-breadwinners and sole breadwinners for their
14 families, they contemplate this shortfall in their pay
15 every hour because it matters to their economic security,
16 the economic security of their family, their future and
17 their health.
18 It's not a matter of education. Women are more
19 educated than their male counterparts, women of working
20 age. It's not a matter of experience. As you'll find
21 today, the American Association of University Women found
22 that women are paid less right out of college, so they
23 start out with a pay gap. And of course, this accumulates.
24 A lifetime of getting shortchanged financially adds up to
25 pretty big numbers. So as you can imagine, women are very
13 1 interested in making sure that the pay gap is closed.
2 Even with all these different perspectives on the
3 same subject -- and there have been a whole lot of studies
4 in the last 50 years -- the fact does remain, there is a
5 pay gap. It persists for every conceivable factor related
6 to wages. Again, you'll hear more about that from the
7 other panelists.
8 In general, on average over the last 50-plus
9 years, the rate of narrowing the pay gap has been about a
10 half a penny a year. That's in the nation and in
11 Pennsylvania. So in other words, for half a century, five
12 decades, you know, it's very clear that the laws that are
13 on the books right now have not done their work, have not
14 done the work of eliminating the pay gap.
15 And it's also very clear that left to their own
16 devices, even with this law on the books, business and
17 industry in Pennsylvania has not acted to close the gap.
18 There's no reason to believe that it will.
19 And frankly, businesses that depend upon gender
20 and racial discrimination as part of their profit strategy
21 are acting unethically even though they may not know it,
22 you know, whether they know it or not. And women deserve
23 much better.
24 Pay secrecy which is a culture of discouraging
25 openness about earnings or retaliation against transparency
14 1 allows pay discrimination to continue. Ending pay secrecy
2 is the quickest way to give workers the tools that they
3 need to negotiate what they're worth in the marketplace.
4 Most people are aware of the story of Lily
5 Ledbetter from the Goodyear Tire Company. She didn't
6 realize that she was being discriminated against for 19
7 years. So, you know, it obviously affected her savings.
8 It obviously affected her retirement plans. And how
9 destructive to her and her employer when the truth finally
10 came out.
11 It's basically because of knowledge of what peers
12 are being paid that women are able to bring pay
13 discrimination suits against their employers. And it's
14 really important to give women that access to the courts.
15 I mean, that's how pay discrimination is going to be gotten
16 rid of.
17 The opposite of pay secrecy is pay transparency,
18 having a policy in place that's designed to treat employees
19 fairly. And a lot of companies are consciously taking a
20 look at their pay policies now and erasing, you know, any
21 lingering trace of sex or racial discrimination that's in
22 their pay policies. And work places that operate under pay
23 transparency like public employment or union jobs, the
24 gender gap is much smaller.
25 This fosters respect and trust in the workplace.
15 1 And it also, by the way, makes companies much less
2 vulnerable to pay discrimination suits.
3 I did hear a great interview on NPR about a
4 company practicing pay transparency. The CEO, Dane
5 Atkinson -- he's the CEO of SumAll -- he just decided that
6 he was going to have a pay transparency, you know, policy
7 and he posted all his employees' salaries and also their
8 shares in the company. And he said, yeah, it made for a
9 little bit of chaos right in the beginning.
10 He had a lot of people coming to him and saying,
11 you know -- not a lot, but some people coming to him saying
12 that they felt a little shortchanged. So he had to have
13 very frank conversations with them. But it also forced him
14 to think about his pay policy and, you know, figure out why
15 he does what he does.
16 This is an opportune moment to hold this hearing,
17 as earlier this week the U.S. Senate considered the
18 Paycheck Fairness Act. And it was voted against, you know,
19 along partisan lines. And that's really a shame because
20 this isn't a partisan issue. It's a matter of fairness.
21 Women voters are half of everyone's constituents,
22 Democrats or Republicans. No matter where you come from,
23 women make up half the workforce both nationally and in
24 Pennsylvania. This is the reality in 2014. And it is very
25 fair to say that the Pennsylvania Pay Equity Act, which has
16 1 not been updated since 1968, does not reflect current
2 reality.
3 Women in the Commonwealth need to know that their
4 elected officials represent them and their concerns. The
5 more women understand just how and why they're being
6 shortchanged every single hour that they put in working,
7 the more they're going to demand action from the
8 Legislature.
9 With all due respect to this body, we did not
10 need another study of this subject. There have been a lot
11 of studies. And they all show the same thing, which is
12 women, and especially women of color, experience a pay gap.
13 Really, studies just simply delay acting on the facts.
14 The issue affects women, their families, their
15 futures, and their health. Stop asking women to wait. Our
16 laws need to change. Wage discrimination has got to go.
17 Just as it has in the U.S. Senate, this issue
18 will keep coming up again as well as other issues related
19 to women in the workplace, like affordable childcare,
20 raising the minimum wage. Essentially, House Bill 1890
21 won't do the job alone of ending gender discrimination in
22 the workplace, but it's a very solid place to start.
23 Women are taking on more financial
24 responsibilities in their families, just like men are
25 taking on more of the caretaking responsibilities. Society
17 1 has changed a lot since 1959. Fundamentally, a society
2 that values families would acknowledge the demands of
3 caregiving and value the contributions of both men and
4 women in both the workplace and at home.
5 House Bill 1890, along with a bill like
6 Representative Donatucci's which increases financial
7 penalties for businesses in Pennsylvania that discriminate
8 against their workers on the basis of gender, earned sick
9 time, updating parental leave laws, helping families afford
10 childcare, as I said, and, of course, most importantly,
11 raising the minimum wage will update our laws to include
12 women and reflect the reality experienced by families in
13 the state every day.
14 It's not that hard to do. It's really just a
15 matter of will. And it is what's fair. So please pass
16 1890 out of committee and let the women of Pennsylvania see
17 that you care about the issue. Because when government
18 cares about the issue, then business will care about the
19 issue.
20 Thank you very much.
21 REPRESENTATIVE MACKENZIE: Thank you, Ms. Hunt,
22 for your testimony today.
23 I do want to recognize Representative Delozier
24 who joined us during the testimony.
25 Next we have Susan Frietsche from the Women's Law
18 1 Project.
2 MS. FRIETSCHE: Good morning.
3 REPRESENTATIVE MACKENZIE: Good morning.
4 MS. FRIETSCHE: Acting Chairman Mackenzie,
5 Chairman Keller, members of the committee, my name is Susan
6 Freitsche. And I'm senior staff attorney with the Women's
7 Law Project in our Pittsburgh office. We're a non-profit
8 women's legal advocacy organization dedicated to
9 eliminating sex discrimination and improving women's legal
10 and economic status.
11 And one of the areas in which we have been
12 working since 1974, when we were founded, is in the area of
13 sex discrimination in the workplace. So we are absolutely
14 thrilled that this committee is looking closely at House
15 Bill 1890 and examining why in 2014, when we have had legal
16 protection against wage discrimination on the books for 50
17 years federally and 55 years at the state level, why are we
18 still seeing such extreme wage disparities?
19 As Caryn said, when you look at the disparity
20 suffered by women of color particularly, it is just
21 appalling, 64 cents on the dollar for an African-American
22 woman worker compared to a non-Hispanic white male worker
23 and 54 cents for a Latino woman worker compared to the
24 wages of the dollar of a white male worker. That's an
25 extreme wage gap.
19 1 And the bad news is while it is creeping,
2 creeping upward, the progress is glacial. And, you know,
3 we've asked ourselves, why is this? In my practice, we see
4 it sometimes. I have had women call me saying, I know I'm
5 getting paid less but I can't prove it. I just have a
6 feeling I'm getting paid less.
7 One of my callers found out that she was getting
8 a significantly lower salary than a man who was hired at
9 the same time with the same credentials, same experience,
10 same job responsibilities, same education, same everything,
11 significantly less. And the way she found out was somebody
12 sent an e-mail to the wrong e-mail address and she happened
13 to see his salary, which otherwise would have been secret.
14 So House Bill 1890 will address several of the
15 areas in Pennsylvania's equal pay law that have permitted
16 wage discrimination to flourish in Pennsylvania.
17 And I have to say, we are one of the worst states
18 in the nation. Pennsylvania ranks very, very low in wage
19 equity. I believe we are -- we have the 12th largest wage
20 gap, gender wage gap, in the country. So it is very --
21 it's very significant that you are taking this step to
22 address this problem.
23 At the risk of paralyzing you with more
24 statistics, I just want to quickly look at some of the
25 research to just anticipate what may be objections to this
20 1 law based on a belief that there actually isn't really a
2 wage gap that's attributable to sex discrimination, that if
3 women make less than men, the reason they make less than
4 men is because they choose to make less than men. They
5 make choices of either their occupation or their work hours
6 or their level of responsibilities that they prefer to have
7 jobs that pay less.
8 Even in the same occupation, women earn less than
9 men. Some good recent examples from the research, women
10 are about half of the medical students in the United States
11 today. But they have a starting salary gap of $16,800
12 between men and women who graduated from med school in New
13 York between 1999 and 2008.
14 And when you control for things like on-the-job
15 productivity or choice of medical specialty, the gap is
16 still there. That's a significant, significant gap. So
17 that's sort of the high wage rate.
18 Looking on the low end, it doesn't matter whether
19 the occupation is male dominated or female dominated. The
20 wage gap is still there. So in the male-dominated
21 occupation of janitors and building cleaners, a male earns
22 on average $511 weekly and a women in the same job would
23 make $408 weekly, so 511 versus 408.
24 In the female-dominated occupation of maids,
25 housekeeping, and cleaners, men still make more, getting
21 1 $425 a week, while women are paid $395 a week. So it
2 persists no matter what you control for.
3 There are new studies coming out all the time.
4 There's a new study that came out in August focusing on the
5 food service industry that found that women are paid less
6 than men in all but one of 11 categories of food service
7 jobs. And the hourly wage gap gets worse as the job pays
8 better. So the difference is pennies for cashiers and
9 dollars for managers.
10 The gap is not accounted for in differences in
11 hours worked. And we have an excellent example of that in
12 the case law. A public defender in Blair County, for
13 example, was paid less as a full-time public defender than
14 her full-time male colleague. She had a child. And when
15 she returned to work after the birth of the child, she
16 sought part-time employment.
17 And as a part-time employee, she was paid less
18 than men who were part time. The examples in the case law
19 are many -- and they're pretty severe -- a female vice
20 president whose salary was ten to twenty thousand dollars
21 less than the other three vice presidents, male vice
22 presidents, all of whom received bonuses more than she did;
23 a senior consultant hired at a salary $15,000 less than a
24 man hired one month after her; a high school principal paid
25 ten thousand to fifteen thousand dollars less than equally
22 1 positioned male principals; and a female manager who was
2 fired when she complained about being paid $14,000 less
3 than a similarly situated male coworker.
4 So why does this happen? How is it possible that
5 these things are still happening? when really, I think, we
6 have broad consensus in our society that women should be
7 paid equal pay for equal work. That is not at all a
8 controversial proposition anymore. And I think the reason
9 is that our laws are very weak.
10 House Bill 1890 will help diminish the problem by
11 amending Pennsylvania's equal pay law to require greater
12 scrutiny of pay differences to ensure that any differences
13 that exist are, in fact, based on a bona fide factor other
14 than sex that is job related and consistent with business
15 necessity. And it will also remove the pay secrecy
16 obstacle.
17 So I want to just say a little bit more about
18 those two problems. Both Federal and State law permit
19 employers to pay women less if the wages were set based on
20 a factor other than sex. That's the language in the law, a
21 factor other than sex . So if an employer can say, yes,
22 I'm paying all of my women workers or this particular woman
23 worker less than this man here, but the reason I'm doing it
24 is a factor other than sex, that's okay under our Federal
25 and State law.
23 1 And the problem has arisen that a factor other
2 than sex has been interpreted by courts very broadly so
3 that basically you just put a different dress on it and
4 you're okay.
5 So two of the factors other than sex that you see
6 occurring in the case law are market forces and prior
7 salary. So because the market has permitted men to be paid
8 more historically if the man arrives at a job and says, I
9 made, you know, so much money at my last salary, the women
10 arrives at the same job and said, oh, I made $20,000 less
11 than that, the current law, some courts are permitting the
12 factor other than sex exception to let that historical sex
13 discrimination continue to be perpetuated forever.
14 So what House Bill 1890 would do would be just to
15 close that loophole and to make sure that a factor other
16 than sex is actually a factor other than sex, not just sex
17 discrimination in a different terminology.
18 We should not allow employers to say nobody has
19 ever paid you, woman worker, fairly. No one has ever paid
20 you as much as they pay their male employees, so I wouldn't
21 either . And yet that is the way our current law is being
22 interpreted. We also need to expand the equal pay law's
23 applicability to all workers. When the Legislature last
24 looked at this statute in 1968, it amended it to apply to
25 almost nobody.
24 1 Our State law is very limited in applicability.
2 It doesn't apply to anybody who is covered by the Federal
3 Labor Standards Act. And that's a great, great many and a
4 majority of workers. House Bill 1890 could and should be
5 amended to remove that portion of the law that limits its
6 applicability.
7 So in closing, I just want to thank you,
8 Representative Molchany, Representative Sims, and
9 Representative Donatucci, for your leadership in this. And
10 thank you so much -- as a former victim of pay
11 discrimination, I personally thank you and hope that this
12 bill can become law very quickly.
13 Thank you.
14 REPRESENTATIVE MACKENZIE: Thank you,
15 Ms. Frietsche, for your testimony.
16 MS. FRIETSCHE: You're welcome.
17 REPRESENTATIVE MACKENZIE: I would also like to
18 recognize we have Representative Brown joining us in the
19 audience today.
20 Next up we have Dot McLane from the American
21 Association of University Women here in Pennsylvania.
22 MS. McLANE: Good morning.
23 REPRESENTATIVE MACKENZIE: Good morning.
24 MS. McLANE: Chairman Keller, Representative
25 Mackenzie, Representative Molchany, and committee members,
25 1 thank you for giving me this opportunity to speak.
2 I am President of the American Association of
3 University Women of Pennsylvania or AAUWPA. Our
4 organization has 40 branches across the State, a little
5 over 2,000 members, and an additional 1,300-plus that are
6 members at large. We belong to the National AAUW community
7 which is about 170,000 members and supporters.
8 Our parent organization, AAUW, was founded in
9 1881. And we've been advocating for pay equity since 1894
10 when we first did a research report on the topic. We have
11 continued since that time to focus our public policy
12 efforts on closing the gender wage gap, including our
13 current lobbying efforts for the passage of the Paycheck
14 Fairness Act at the Federal level.
15 Pay equity is a pivotal issue for AAUW, as our
16 mission is advancing equity for women and girls. The
17 current Federal and State legislation addressing equal pay
18 is fraught with loopholes and inadequate authority to
19 enforce the current legislation. So it's vital that we
20 take this opportunity to strengthen our State legislation
21 with House Bill 1890.
22 Although women's pay has made progress since the
23 passage of the Equal Pay Act of 1963, the gender wage gap
24 has stayed essentially unchanged from 2001 to 2012 with
25 women working full time year round earning 77 cents for the
26 1 dollar men are paid.
2 While the U.S. Census Bureau announced on Tuesday
3 that the 2013 earnings ratio nudged up to 78 cents, the
4 Bureau also said that the difference between the 2012 and
5 2013 number is not statistically significant. In any case,
6 whether we're talking about a gap of 22 cents or 23 cents,
7 it's still an unacceptable gap that means less money for
8 women and their families.
9 Moreover, AAUW's 2012 research report, Graduating
10 to a Pay Gap, compared apples to apples and controlled for
11 all factors known to affect earnings: Hours worked,
12 occupation, college major, marital status, selectivity of
13 the college they attended and more. And still, AAUW
14 researchers found a 7 percent unexplainable pay gap between
15 men and women just one year out of college. Seven percent
16 is no small change to a woman.
17 Occupational segregation in which women tend to
18 cluster into low-paying occupations, the increase in
19 numbers of women as their family's primary breadwinners or
20 co-breadwinners, 40.9 percent and 22.4 percent respectively
21 in 2012. The high number of single mothers in the United
22 States, of which 13.2 percent in 2012 lived in poverty, and
23 the fact that twice as many women as men 65 years or older
24 live in poverty demonstrate the dismal consequences of
25 women not receiving equal pay for equal work.
27 1 Pennsylvania was given a grade of C plus by the
2 Institute for Women's Policy Research for women's
3 employment and earnings as measured by various earning
4 indicators. AAUW reports that Pennsylvania ranks 40th in
5 median wages for full-time year-round workers, 16 years of
6 age and older. Pennsylvania ranks 40th with a 76 percent
7 earnings ratio.
8 The gender pay gap isn't just a number. It
9 represents real dollars and cents that translates into less
10 money for food, gas, housing, education, childcare, and so
11 on.
12 Pay secrecy, which House Bill 1890 speaks to, is
13 an important factor contributing to wage discrimination. A
14 survey conducted by the Institute for Women's Policy
15 Research Rockefeller asked workers in the public and
16 private sectors about policies at their workplaces that
17 discourage or prohibit sharing information about pay.
18 When separating private and public sector
19 workers, the private sector workers were much more likely
20 to be subject to discouragement or prohibition of
21 discussion of wage and salary. And 62 percent of the women
22 and 60 percent of the men said that they were discouraged
23 to speak about their wages compared to the public sector
24 where 18 percent of the women and 11 percent of the men
25 were discouraged from talking about their salaries.
28 1 The practice of pay secrecy was most common among
2 single mothers of which 63 percent responded that
3 discussion of wage and salary was discouraged or
4 prohibited.
5 Another consequence of workplace policies that
6 discourage or prohibit information sharing is that young
7 women starting out in the workforce more often than not
8 don't know when they are being offered a good or fair
9 salary. That, coupled with the evidence that women are
10 less likely to negotiate for a higher salary, leads to
11 women starting out their careers at a decided disadvantage
12 compared to their male colleagues.
13 Over her working life, a woman can lose from
14 700,000 to a million dollars depending on her level of
15 education and experience. AAUW offers Start Smart Salary
16 Negotiation workshops that teach women how to benchmark
17 their salary and to negotiate for more if the offer comes
18 up short. Yet these initiatives are only part of the
19 solution.
20 Individuals, employers, and policymakers all have
21 a role to play in closing the gender pay gap. House Bill
22 1890 presents a clear and important opportunity for our
23 State lawmakers to fulfill that role by requiring employers
24 to prove that pay differentials are due to bona fide
25 factors and allowing employees to openly discuss their
29 1 salaries, file a complaint, or participate in
2 investigations of salary matter. House Bill 1890 can help
3 close the gender wage gap and bring women closer to equal
4 pay for equal work.
5 AAUW and AAUW Pennsylvania continue to support
6 legislation such as House Bill 1890 to accomplish this
7 reality.
8 Thank you.
9 REPRESENTATIVE MACKENZIE: Thank you, Ms. McLane,
10 for your testimony.
11 We're going to keep moving. And then we'll
12 reserve all the members' questions until we finish up with
13 our next presenter, Deborah Vereen, with the Vereen Group.
14 MS. VEREEN: Good morning.
15 REPRESENTATIVE MACKENZIE: Good morning.
16 MS. VEREEN: Good morning. Thank you.
17 Good morning, Chairman Keller and Vice Chair
18 Mackenzie, and also all committee members and my
19 distinguished colleagues here. I am Deborah Vereen. And
20 I'm a strategist that helps organizations look at their
21 policies and procedures, their evolving workforce, and what
22 they can do to help to leverage that evolving workforce.
23 And I work not only with for-profit, non-profit,
24 but government and also education. So to look at what are
25 the right things to do and how do we look at policies that
30 1 were put in place 50 years ago versus what do we need to do
2 to modify them today or throw them out and start over.
3 So I have personally experienced and
4 professionally interacted with the positives and the
5 negatives of pay equity from being in perceived
6 nontraditional roles for a woman and working with
7 organizations to review their Human Resource policies and
8 practices to foster an environment of inclusion that works
9 for everyone, i.e., equitable compensation, inclusionary
10 policies.
11 My testimony today is from my business lens of
12 connecting the dots to respect, value, and economics.
13 The importance of pay equity -- and today we're
14 putting a focus on it for women. America's Constitution,
15 brand, image, message, economy, and future was and is about
16 access and opportunity for everyone.
17 Words matter. And it is the demonstrated
18 behavior that brings them to life and breathes equity and
19 trust. Each of us needs to walk the talk by enabling the
20 achievement and consistent practice of pay equity across
21 the board regardless of gender, race, ethnicity, or
22 generation.
23 The Commonwealth of Pennsylvania's leaders in the
24 community, business, education, and government sectors
25 should have a strategic focus on pay equity for all women
31 1 for the above and following reasons:
2 As of 2012, women were 50.8 percent of the U.S.
3 population and 51.2 percent of Pennsylvania's population.
4 As of 2012, women were 58.2 percent of
5 Pennsylvania's labor force.
6 Women in the U.S. will account for 49 percent of
7 the total labor force growth between 2006 and 2016.
8 Women and persons of color account for 70 percent
9 of the new entrants into the U.S. labor force.
10 And 75 percent of working women are in full-time
11 positions.
12 Currently, Pennsylvania does not have a county
13 that pays equitably. Pennsylvania's women earn on average
14 the least in Jefferson and Indiana Counties and the most in
15 Philadelphia County, 54 cents to 83 cents respectively for
16 every one dollar a man earns.
17 500,000-plus of Pennsylvania's
18 households/families are headed by women.
19 Women in full-time positions on average make
20 $11,607 less than their male counterparts annually. Think
21 about that. Would this be acceptable to you? Would you
22 believe that this is fair? The gender wage gap will amount
23 to five hundred thousand to two million dollars in an
24 earnings loss for a woman over her 35-year career.
25 The loss of earnings affects a woman's income,
32 1 social security, pension, 401k, incentive bonuses, health
2 care professional development opportunities, sense of
3 fairness, value, and quality of life for herself and also
4 her family.
5 The consistent practice of pay equity across the
6 board fosters a valued and engaged workforce, improved
7 morale, employee trust and satisfaction that leads to
8 creativity, innovation, high performance, and mission
9 ownership. When the work environment reflects and values
10 today's workforce, an organization's bottom line and the
11 State's economy are positively impacted.
12 Additional return on investment for Pennsylvania
13 and an organization is attracting, representing, and
14 retaining diverse skills, experience, and perspectives at
15 all levels to engage and leverage the current and the
16 evolving consumer base.
17 The Equal Pay Act Law commenced in 1959, evolved
18 in 1968, and basically has stalled since 2001. Let's have
19 a mindset change in 2015 with the House and Senate leading
20 by passing House Bill 1890, Senate Bill 1212, and
21 Pennsylvania organizations implementing best practices in
22 workplace equity and parity.
23 Pay secrecy retaliation protection and equitable
24 and accountable policies and procedures that govern equity
25 and parity in starting salaries, performance evaluation,
33 1 and promotion compensation decisions to ensure Pennsylvania
2 is not only competitive but leading in closing the access
3 and opportunity gap for today's and tomorrow's workforce.
4 Closing the pay gap would create an incredible
5 economic stimulus for Pennsylvania.
6 In closing my question is: Why wouldn't members
7 of the Pennsylvania Legislature ensure pay equity for women
8 not just simply because it's the right thing to do but it
9 is the smart thing to do for Pennsylvania and for families?
10 I thank you very much for focusing on this very
11 critical and also systemic barrier.
12 Thank you.
13 REPRESENTATIVE MACKENZIE: Thank you, Ms. Vereen,
14 for your testimony.
15 MS. VEREEN: You're welcome.
16 REPRESENTATIVE MACKENZIE: I appreciate all of
17 you joining us here today. There was a tremendous amount
18 of information and data that is very helpful. I want to
19 thank you.
20 We are going to go to questions. And we'll start
21 with Chairman Keller.
22 MINORITY CHAIRMAN KELLER: Thank you,
23 Mr. Chairman.
24 We've heard a lot of statistics here today. And
25 I don't know who is better qualified to answer the
34 1 question. But all I do is go back from my life experience.
2 And when I worked down at Waterfront we had no women in the
3 workforce.
4 Today, we have women in the workforce. The job
5 has been mechanized so women can participate in it. And
6 they are. And we have women in the workforce. And in
7 Philadelphia building trades, we have women entering the
8 apprentice programs. So we're having women in the
9 workforce there. And all that is determined by collective
10 bargaining, so everybody is paid the same. A lot more
11 women are in organized labor today.
12 If we pulled out the women who have to be paid by
13 the Collective Bargaining Agency, how would that affect the
14 pay inequity gap? because they're paid the same as the men.
15 If you pulled out organized labor, the gap has to widen
16 tremendously. Are there any statistics on that?
17 MS. HUNT: Chairman Keller, that's a really good
18 question. Because, of course, if you have a union, you
19 don't have a pay gap, you don't have a gender pay gap.
20 MINORITY CHAIRMAN KELLER: What did you say?
21 MS. HUNT: If you have a union, you don't have a
22 gender pay gap.
23 MINORITY CHAIRMAN KELLER: Oh, okay.
24 MS. HUNT: So I don't know whether there have
25 been studies of this, but I know who would know. And that
35 1 is a witness who was not able to be here today in person,
2 Professor Janice Fanning, who submitted written testimony
3 and who has served as an expert witness on pay disparity
4 and has written extensively on it.
5 So I would be happy to convey your question to
6 her and get back to the committee in writing.
7 MINORITY CHAIRMAN KELLER: Thank you.
8 It will show that it's glaring. It's even more
9 of an inequity if we take out people who are covered under
10 the Collective Bargaining Agreement.
11 MS. VEREEN: According to the Bureau of Labor
12 statistics, the wage gap for union members is approximately
13 half of what it is for nonunion members.
14 And for women, it represents more than $200 per
15 week difference, union versus nonunion workers. So $200 a
16 week. That's quite a lot.
17 MINORITY CHAIRMAN KELLER: I'll say. I'll take
18 it.
19 Thank you, Mr. Chairman.
20 REPRESENTATIVE MACKENZIE: Thank you, Chairman
21 Keller.
22 I do have two quick questions. On the map of
23 Pennsylvania, we see differences in the disparity across
24 the different counties. Do we have an understanding of why
25 that has originated?
36 1 MS. VEREEN: I don't know what the actual reason
2 is. My feeling about it would be it depends on the
3 industries and the companies that reside in those
4 districts. If you get into areas that are more urban, like
5 Philadelphia and Pittsburgh, those employers tend to be a
6 little more accountable to the legislation than possibly
7 the smaller more rural or suburban areas.
8 So I would think that, as someone stated,
9 Philadelphia has the smallest wage gap. And that's by
10 virtue of where it's situated and the amount of industry
11 and employment that's there. And the worse pay gap -- I'm
12 not sure exactly which one it is, but I'm sure it's rural.
13 REPRESENTATIVE MACKENZIE: And then the second
14 question I had is if -- one of the testimonies said that we
15 have the 12th worse pay gap in the country. And when you
16 look at those states that have the smallest pay disparity,
17 do we have an understanding of what has worked well in
18 those cases? Do we have a best practices state that we can
19 look to?
20 MS. FRIETSCHE: I think Connecticut stands out as
21 having a particularly strong state equal pay law . And
22 there are, I believe, now seven states that have updated
23 their state equal pay laws in similar ways to 1890 to what
24 House Bill 1890 would do. So, yeah, we have some models
25 out there to look to.
37 1 REPRESENTATIVE MACKENZIE: Great. And when you
2 look at those models, have any of those other states passed
3 legislation recently where you've done studies to look
4 before and after?
5 MS. FRIETSCHE: I have not. And I'm not aware
6 whether there are studies of that nature. But we would be
7 happy to look into it for the committee.
8 REPRESENTATIVE MACKENZIE: Great.
9 MS. FRIETSCHE: Minnesota actually is a model
10 state. I forget how many years ago the government took a
11 look at their pay scales and made them equivalent. And not
12 only equivalent for the same job, but the same type of job.
13 So, for example a janitor and a cleaning lady or
14 that sort of thing. They tried to put parity for the same
15 type of job skills. And they have the smallest pay gaps.
16 So that's also a model.
17 REPRESENTATIVE MACKENZIE: Okay.
18 MS. FRIETSCHE: Another one in the literature is
19 Ontario, Canada, as a model for a very small wage gap.
20 REPRESENTATIVE MACKENZIE: Great. Thank you.
21 We are going to proceed with questions.
22 Representative Molchany.
23 REPRESENTATIVE MOLCHANY: Thank you,
24 Mr. Chairman.
25 You know, given all our testimony and the fact
38 1 that we know that we will not hear from today some of the
2 women who are impacted by the pay gap and pursuing legal
3 action in that vein, do you believe that, in general,
4 employees in Pennsylvania are aware of their rights as it
5 pertains to State and Federal equal pay laws or do you
6 think that there's maybe an information gap as much as
7 there is a pay gap?
8 MS. McLANE: I can say that most employees are
9 not aware of. They are not aware of what the laws are on
10 the book. They are also -- no matter what company,
11 organization, they work for, there is this unsaid rule not
12 to discuss wages, not to bring it up to your supervisor or
13 also within your coworkers as well.
14 So when you have that secrecy and that untold law
15 within an organization, then you don't even really look at
16 the law. You make certain assumptions. So there are some
17 laws on the books, but most of the workforce is not even
18 aware of them.
19 PANELIST: I agree with that. Even though the
20 EEOC, you're required to post that information, that people
21 know they are supposed to be equally paid, they don't
22 understand what the laws are. And more importantly, even
23 if they knew they were being paid or suspected that they
24 were being paid unfairly, the recourse is just so limited
25 and so risky that women just won't go there.
39 1 MS. McLANE: There is a huge and justifiable fear
2 of retaliation at the hands of employers. So even asking
3 the question, am I being paid fairly? is a risky question
4 for many people. Most people don't have access to a
5 lawyer. Most people would not have any idea how to go
6 about getting access to a lawyer at a rate that they could
7 afford.
8 You know, there's a big gap between the
9 protection that is promised in the law and people's actual
10 ability to avail themselves of its protections. There also
11 is a weakness in the remedies that our current equal pay
12 law would permit a court to award.
13 So we would recommend that the remedy section of
14 the equal pay law also be modernized and be given a little
15 bit more teeth.
16 REPRESENTATIVE MOLCHANY: Thank you.
17 REPRESENTATIVE MACKENZIE: All right.
18 Next we have Representative Delozier.
19 REPRESENTATIVE DELOZIER: Thank you very much.
20 I just had a clarification that I would like your
21 input. I've read through the summary in the bill and
22 obviously wholeheartedly support everyone being paid
23 equally. For any reason, they shouldn't be discriminated
24 against.
25 But in reading the Federal law and the equal
40 1 employment, it talks about that they can't be discriminated
2 based on race, color, religion, sex, or national origin.
3 So I guess I just want to hear from your opinion what the
4 difference is from this law versus what is not being done
5 by the Federal law that's already in existence.
6 MS. FRIETSCHE: House Bill 1890 would add
7 additional protections for fair pay. So it would close
8 loopholes in our equal pay law at the state level, and
9 those same loopholes exist at the Federal level in the
10 Federal equal pay law by requiring employers to show that
11 if they're paying different salaries to men and women,
12 those differences are not based on sex. But they are
13 rather related to job performance and are consistent with
14 business necessity. So that's one way in which it would
15 strengthen the existing law.
16 And a second very important way is that it would
17 stop pay secrecy and prohibit retaliation against workers
18 for disclosing their pay or for asking other workers what
19 their pay is. So those are two really important ways in
20 which this bill would strengthen the protections that are
21 available at either the State or the Federal level.
22 And just to be clear about the pay secrecy
23 provision, House Bill 1890 does not require pay
24 transparency. It doesn't require employers to post
25 everybody's salary.
41 1 REPRESENTATIVE DELOZIER: That would just be the
2 ideal.
3 MS. FRIETSCHE: That's right.
4 But it would protect workers against retaliation
5 if they dared to ask what another worker was making.
6 MS. McLANE: That's what AAUW has advocated most
7 for, the key part of pay secrecy in eliminating this
8 retaliation and that is not present in the Federal law
9 legislation. So this bill would actually be ahead of that
10 one.
11 REPRESENTATIVE DELOZIER: Okay.
12 And similar to what Representative Mackenzie had
13 mentioned, other states that have put something like this
14 into place, are those, as you call it, a loophole, or are
15 those rectified in those other states as well or is this
16 something -- do we model this after another state? And if
17 I missed that, I apologize. But did we model this, these
18 changes, after another state or is this something that we
19 just want in Pennsylvania?
20 MS. FRIETSCHE: Yes. We looked at other states,
21 including Connecticut. And we looked at pending Federal
22 legislation that would strengthen the Federal equal pay
23 laws as well.
24 PANELIST: I think what makes other states a
25 little bit better at closing the gender wage gap is not
42 1 necessarily more legislation but that they adhere to their
2 current legislation, because, as you know, the legislation
3 can be interpreted many different ways. And that's part of
4 the problem with the Federal and the State legislation.
5 So it's not so much that they may have sealed up
6 all their loopholes, but they just choose to interpret it
7 in a better manner than suits closing the wage gap.
8 REPRESENTATIVE DELOZIER: Okay. Thank you.
9 Thank you, Mr. Chairman.
10 REPRESENTATIVE MACKENZIE: Great. Thank you,
11 Representative Delozier.
12 The next questions are from Representative
13 Gillen.
14 REPRESENTATIVE GILLEN: Thank you.
15 Hi. I'm over here at this end. I'm from Berks
16 County. And I have a special interest in this hearing, as
17 I have five daughters.
18 My wife is better educated than I am. We both
19 have master's degrees, but she spent some time at the
20 Reading Hospital School of Nursing. She's smarter than I
21 am. She's better educated than I am. And she doesn't make
22 any money at all. She's a stay-at-home mom. And she is
23 homeschooling our children and doing a tremendous job.
24 I understand when you introduced yourself you're
25 from Representative Keller's district, did I hear you say?
43 1 MS. HUNT: Yes.
2 REPRESENTATIVE GILLEN: Okay. My mother also
3 lives in Representative Keller's district.
4 MS. HUNT: I highly recommend it.
5 REPRESENTATIVE GILLEN: And she even stopped by
6 the office to get some help. And I commend the good
7 chairman on that.
8 I've read through the testimony in advance. And
9 I guess this is for anybody on the panel. When you read
10 the Chamber of Commerce's perspective and the NFIB's
11 perspective on the legislation, it varies in several areas.
12 And I honestly come to this hearing with a spirit
13 of inquiry. Have you had the opportunity to visit with the
14 NFIB or the Chamber or have any face-to-face discussions or
15 telephone calls or e-mail communications perhaps to close
16 the gap with regard to their positions?
17 PANELIST: Representative Gillen, this bill is
18 part of a package of legislation, as Caryn said, the
19 Pennsylvania agenda for women's health. And we have, in
20 fact, started talking to the Chamber about ways in which we
21 can work together to improve women's health and well-being
22 in the Commonwealth. We have not yet sat down about this
23 particular bill. But I certainly hope we do. And I hope
24 we do soon.
25 REPRESENTATIVE GILLEN: Because looking at their
44 1 testimony -- and I have not had a personal conversation
2 with them. But as I perused the testimony, they had
3 concerns about enhanced litigation and private employers'
4 rights being abridged.
5 And I was just curious as to the nature of the
6 chemistry, hearing your testimony, reading your testimony,
7 and reading their testimony, if there's any possibility of
8 bridging some of these gaps or clarifying positions.
9 That's the nature of my inquiry.
10 PANELIST: Well, I run a small office. I think
11 of myself as a businessperson of a sort, a non-profit
12 businessperson. And I understand the stresses and
13 difficulties that small businesspeople face. And I'm happy
14 to sit down and talk with the business community what
15 problems they may see in the bill.
16 REPRESENTATIVE GILLEN: Just a brief comment. I
17 have every aspiration for my daughters, as you have for
18 your own children and colleagues. And my two oldest
19 daughters have got their sheep out at the 4-H Program. So
20 I want to expose them to every educational opportunity,
21 every enriching experience in life. And I hope at the end
22 of the day they will receive the salary that's commensurate
23 with their good effort and education and hard work.
24 So thank you for your testimony.
25 Thank you, Mr. Chairman.
45 1 PANELIST: I'd just like to add that I'm also
2 pretty sure that you don't want them to have to wait
3 another 50 years to be paid what they're worth when they,
4 you know, take advantage of the opportunities that they
5 have.
6 REPRESENTATIVE GILLEN: I expect they'll be
7 taking care of me during my retirement years. So I want it
8 to be fairly immediate.
9 Thank you.
10 REPRESENTATIVE MACKENZIE: All right. Thank you,
11 Representative Gillen.
12 Next up we have Representative Snyder.
13 REPRESENTATIVE SNYDER: Thank you, Mr. Chairman.
14 Chairman Keller did ask the question I was
15 thinking, too. But I would like to expand upon it just a
16 bit if I could.
17 As you get those statistics on labor unions, if
18 it's a collective bargaining agreement, you know, I would
19 assume that the women are paid the same as the men for the
20 job classification. I just wonder if there are any studies
21 out there for the big box stores and employers like that.
22 Is there a disparity between the men and the
23 women in those types of workplaces? So if you could get
24 that information also, I would appreciate it.
25 MS. McLANE: So you are talking about larger
46 1 employers as opposed to smaller employers?
2 REPRESENTATIVE SNYDER: Yes. Like the Wal-Marts,
3 the Sam's Clubs, the Costcos, those kinds of things.
4 MS. McLANE: Well, you probably know that AAUW
5 sponsored a class that tried to get a class action suit
6 against Wal-Mart because of the gender pay gap.
7 REPRESENTATIVE SNYDER: So there is a gender pay
8 gap there?
9 MS. McLANE: There is absolutely a gender pay
10 gap.
11 REPRESENTATIVE SNYDER: Okay.
12 MS. McLANE: And it was not allowed to go forward
13 as a class action. So individual plaintiffs have to go
14 forward with it.
15 REPRESENTATIVE SNYDER: Okay.
16 MS. McLANE: I don't recall the exact number. A
17 lot of it was not only pay, but being promoted to manager
18 levels.
19 REPRESENTATIVE SNYDER: Can we get those
20 statistics perhaps if you have them?
21 MS. McLANE: Of course.
22 REPRESENTATIVE SNYDER: Thank you very much.
23 Thank you, Mr. Chairman.
24 MS. VEREEN: And if I could just add, in that
25 Wal-Mart case, the managers who paid women less said that
47 1 they were doing that because men are working as the heads
2 of their households while women are just working for the
3 sake of working and to earn extra money.
4 I mean, it's stunning how persistent these gender
5 stereotypes about women workers are. And I personally
6 believe that's a large reason for the persistence of the
7 pay gap. There are just very deep entrenched attitudes
8 about women gender bias. And that's what we need to work
9 at eliminating in order to really solve this problem.
10 MS. VEREEN: I have to say that's absolutely
11 true. And to give you a personal example of that, at one
12 point in my career I was in a non-traditional industry, but
13 I had been in that industry for a little while. But I went
14 into a non-traditional role for a female.
15 Within a week after I was hired and promoted into
16 that, a non-Hispanic white male came into the same
17 position, same title, same responsibilities, a week later.
18 Six months into the role, he actually called me and was
19 frustrated and wanted to know if I would be willing to
20 coach and mentor him.
21 He had come into -- for him, it was a
22 non-traditional industry. He had not been in that
23 industry. But he had a passion for it. And I asked him,
24 come on over. Let's, you know, have a talk. You know,
25 what are you struggling with?
48 1 In the conversation, not solicited at all, but in
2 the conversation, his worry was that I wanted to be in this
3 role. My wife told me not to go into this role, that I had
4 a very good job. I was being paid very well. I needed to
5 stay where I was.
6 He said, Deborah, I really need to be successful
7 at this. And I want to be successful at this. And you're
8 having great performance. And I just would like to be able
9 to tap into that.
10 So he said, I am making this, when I was making
11 that. He said, I can make it on what I'm making now
12 because I believe within two years I'm going to grow. I'm
13 going to move forward in this. But he said I need to get
14 it right. My performance needs to come forward.
15 So after thinking about that a week, I went into
16 my supervisor and said, am I being paid the right salary?
17 Is it really equitable to what I'm doing? And he said,
18 your performance is fantastic. You're great. He said,
19 you're doing better than we even expected.
20 I said, great. Why am I being paid $10,000 less
21 than males that are in this position? He first looked at
22 me and said, No. 1, you have no business discussing pay. I
23 said, No. 1, I didn't ask what their pay was. It just
24 simply happened to come out in conversation.
25 He said, and, No. 2, he, the males, have a
49 1 family. They have to support them. They will always be
2 making more. So I said -- you know, at that time, this was
3 in the mid-80's. Back then I said I lost my mind. But, of
4 course, after I matured I was so glad I did say what I
5 said. I said, so you've told me how wonderful my
6 performance is. I am mentoring two men right now to get
7 their performance up. I said, and, you know, we shouldn't
8 be talking about personal things. But oh, by the way, I'm
9 divorced. And I'm the head of my family and I need my
10 income.
11 Needless to say, 60 days after that, I was
12 brought up and I was also given a bump for my performance.
13 But it is the unconscious biases that are there. And it's
14 just the way of doing business.
15 So we really have to raise the awareness. And we
16 have to put in a level set of laws. The law is the
17 foundation. The law is one of the major enabling tools.
18 But then organizations have to know this is the
19 law. What do I as an organization, as a CEO, as a VP of HR
20 need to put in place that has that governance, that
21 accountability, to help change the mindset, to help change
22 those unconscious values of hiring managers and those that
23 take care of the succession planning?
24 So, yes, it is there. And it's alive. And it's
25 well. I go into organizations and just simply say, let's
50 1 just take a look at this. And the surprise. It's not
2 sometimes that it's blatant or that it's malice. It's just
3 the way the business has been done and has been approached.
4 So that's what we have to delve into.
5 REPRESENTATIVE MACKENZIE: Great.
6 Are there any other questions from committee
7 members? Representative Donatucci.
8 REPRESENTATIVE DONATUCCI: Thank you,
9 Mr. Chairman.
10 And thank you for your testimony. Considering
11 that many women don't even know that they are being
12 discriminated against, do you have any statistics on how
13 many women in Pennsylvania have initiated lawsuits? And
14 how much would that number increase if House Bill 1890 were
15 to be passed?
16 PANELIST: I do not. There are not a lot of case
17 law under our current state equal pay law. And that is
18 because back in 1968 it was amended to apply to only a
19 very, very small class of workers. So our state equal pay
20 law does not even protect most women workers in
21 Pennsylvania today. And that is a terrible failing that
22 can be corrected through this legislation.
23 REPRESENTATIVE DONATUCCI: My second question is,
24 House Bill 1250 would really have to rely on 1890 to be
25 passed to really have any impact. Unfortunately, it came
51 1 out of committee with a lot less penalty than I had wanted.
2 But my question is, if the penalties were high enough,
3 would it be a deterrent to employers discriminating against
4 women's pay?
5 PANELIST: Well, certainly I think penalties that
6 are meaningful are much more of a deterrent than penalties
7 that were set 50 years ago. So certainly that would help.
8 And there are other remedies that could be provided to
9 prevailing plaintiffs in equal pay lawsuits. And we'd like
10 to recommend that they be incorporated into House Bill 1890
11 as well.
12 REPRESENTATIVE DONATUCCI: Thank you.
13 PANELIST: And I'd like to say that I believe
14 that if this bill is passed and the awareness is raised
15 with employers, you have, I would say, a majority of
16 employers that would take a look at their policy and their
17 wages. And the light bulb would come on. And they would
18 put equitable things in place.
19 So would you have more lawsuits? I don't know.
20 Because for me, I would think that more employers would
21 actually rise to it.
22 Now, yes, will there be some employers that it
23 will take a lawsuit, a class action suit, to get them
24 moving? But I won't say that that is most of them in
25 Pennsylvania. It's about putting the law in place but then
52 1 also raising the awareness to it.
2 PANELIST: And fear of allowing women to have
3 access to the courts should not keep us from doing the
4 right thing. Right?
5 And I do agree with my fellow panelist that by
6 improving the law and giving it teeth and making it
7 effective, which it has not been for 50 years, will change
8 things without litigation. Because business will take a
9 look.
10 REPRESENTATIVE DONATUCCI: Thank you. Because I
11 was surprised. I don't know what the numbers were of how
12 much has been granted in lawsuits Federally to women for
13 employment wage disparity.
14 Thank you.
15 MINORITY CHAIRMAN KELLER: Thank you,
16 Representative Donatucci.
17 Chairman Keller.
18 MINORITY CHAIRMAN KELLER: Thank you,
19 Mr. Chairman. One final quick question.
20 Ms. Vereen, you've piqued my curiosity. I think
21 what I'm hearing is in your experience, the majority of
22 companies do not do this with malice or with a profit
23 motive. It's a mindset that we're fighting here?
24 MS. VEREEN: Yes. It's a mindset. It's a
25 culture. It's a culture of thinking that women are only
53 1 capable of certain roles, women only have certain skills.
2 And now you have women, especially in these two younger
3 generations, that are going into what the male-dominated
4 leadership believes are non-traditional roles.
5 MINORITY CHAIRMAN KELLER: Okay.
6 MS. VEREEN: So for instance, when I went into --
7 and I've been in a number of non-traditional roles in my
8 career. And sometimes when I went into those roles, it was
9 that as a female, being the only female, the first female
10 into that role, I had to be put on probation because they
11 really didn't think that I was going to be successful.
12 MINORITY CHAIRMAN KELLER: I see.
13 MS. VEREEN: Whereas a man coming in the same day
14 would just simply get X salary and go ahead, move forward.
15 So it's the culture. And once you raise the awareness of
16 that culture, that it is actually going on -- I'll give you
17 an example. We had a press conference in April about the
18 Senate bill. And when I was interviewed and I said, you
19 know, every VP of HR should just simply go and do a wage
20 equity and parity, you know, comparison in their HR
21 Department. And then they would actually see what was
22 going on.
23 I had two CEOs and one EVP of HR actually call me
24 and say, thank you very much. I had no clue. So that's
25 why I'm saying there's a culture that's there with hiring
54 1 managers, even with writing job descriptions. And a lot of
2 times the job descriptions have been in place for 15, 20
3 years and they were written for a man.
4 So when they see a female coming in, immediately,
5 well, she's not really qualified, but, okay, let's give her
6 a shot, but we need to put her on probation. And we should
7 not put her up to the rate scale just yet.
8 PANELIST: I agree it's also a cultural thing.
9 But another element is a lot of -- not being in a malicious
10 method but a lot of employers might think it's just good
11 business sense to keep the payroll down as much as possible
12 to bring the profits up. So if they can offer a woman less
13 and she takes it, they go, good. That keeps my payroll
14 down. And because women don't know what they should be
15 paid and they don't typically negotiate as well as a man
16 will, she'll take less. And, you know, so they go on and
17 they're happy to pay her less.
18 MS. VEREEN: You know, that's a really good
19 point. A lot of organizations have pay ranges and pay
20 scales. And so therefore, the women will come in at the
21 lower end of the pay range, where the male will come in at
22 the higher end of the pay range. And it will have to do
23 with their budget, but also for them, it's okay.
24 You know, they don't believe they're doing
25 anything wrong because the woman is within that pay scale,
55 1 but she's at the lower end of the pay scale. So not even
2 thinking what is the effect on it because of that culture
3 of a woman is not the head of a household and not
4 supporting a family.
5 MINORITY CHAIRMAN KELLER: The opposition is
6 going to say you're going to create more lawsuits and
7 that's a bad thing. If we can get this bill passed -- and
8 you're saying if you raise the awareness way behind the
9 times, companies will dig in.
10 But the majority -- in your experience, the
11 majority of the companies, once we have something that we
12 can show them that, you know, you have to get better on
13 this issue, they won't take the -- we won't have to bring
14 lawsuits against them. They would just -- as you said,
15 people thanked you for bringing it to their attention.
16 MS. VEREEN: Right.
17 MINORITY CHAIRMAN KELLER: So basically what
18 we're trying to do with this bill is to bring it to
19 people's attention that there is an inequity. And I don't
20 know if it's profit driven. In the overall cost of things,
21 what could that pay inequity bring to the bottom line?
22 Probably it is just a cultural thing .
23 MS. VEREEN: And think about this: A male will
24 bring a lawsuit before a female will. And just think about
25 the example I gave you of myself. I could have very easily
56 1 went out and had a really big lawsuit and then brought all
2 the other women with me and had a class action lawsuit.
3 But when I presented it to them and why it was and then
4 they rectified it, but then they also went and did a pay
5 comparison.
6 MINORITY CHAIRMAN KELLER: One other question.
7 Does this mean I have to give Joanne a raise?
8 PANELIST: I'd just like to add that this would
9 also benefit men. I mean, we've been talking about the pay
10 gap for women and it is significant and that should be the
11 focus. But updating the pay equity law in Pennsylvania
12 will benefit all workers because they will have an
13 opportunity to find out what they should be paid. And it
14 will also, as we've been saying, you know, ask business to
15 take a look at what they're doing.
16 I do think that it is a mindset, as Deborah said,
17 that, you know, if you think you can get away with paying
18 someone less, you will. I mean, it's like shopping, right?
19 We are always looking for a bargain. It isn't malicious.
20 It is unconscious. But it is there. And it's unethical.
21 And so if government leads, business will follow
22 in this case and come to the very sensible recognition that
23 it is unethical.
24 MINORITY CHAIRMAN KELLER: Thank you.
25 Thank you, Mr. Chairman.
57 1 REPRESENTATIVE MACKENZIE: Thank you, Chairman
2 Keller.
3 Representative Molchany.
4 REPRESENTATIVE MOLCHANY: Thank you,
5 Mr. Chairman.
6 I just have a comment on kind of the underlying
7 cultural issue with pay gaps and pay inequity. And I do
8 agree with what Deborah mentioned. I don't think employers
9 maliciously do this. And I am thinking that it's probably
10 more than two CEOs that were probably thinking of picking
11 up the phone to thank you for bringing attention to
12 something going on internally within their own company that
13 they wanted to correct. I do believe that employers are
14 not being malicious about this.
15 And that brings me to the comment that, you know,
16 I think within companies as well, we see fewer women
17 serving on boards of directors, corporate boards, frankly,
18 government boards, authorities and commissions. I took a
19 look at the SERS and PSERS boards of directors for
20 instance.
21 And the SERS board, which is the State Employee's
22 Retirement System, the largest pension obligation, pension
23 investment board in the state, the folks that control that
24 and make decisions has, I believe, 11 members. They are
25 appointments and none of them are women. Yet the SERS
58 1 system has approximately forty to forty-five thousand women
2 enrolled in their retirement system.
3 And I think there's a real opportunity for us to
4 also bring attention to the fact that the wage gap can also
5 be -- there could be a conversation about the wage gap with
6 companies who are interested in correcting the issue about
7 maybe the diversity of their Board of Directors and maybe
8 having more women at the table.
9 So thank you for bringing that to our attention.
10 REPRESENTATIVE MACKENZIE: Thank you,
11 Representative Molchany.
12 I did have one follow-up question. In the
13 discussion that we were having with the questions, a number
14 of times marital status was mentioned. And that does not
15 seem to be directly addressed in the legislation that we
16 have here before us, 1890. It's a sex-based differential.
17 Is there any precedent in other states for marital status
18 and prohibiting that from being a factor?
19 PANELIST: I'm not aware of any. I think that
20 when you look at the gender wage gap, when you look at
21 marital status, the statistics show that if you're married
22 and you're a woman, you get paid less than a woman that's
23 not or a woman with children who gets paid less, whereas a
24 man gets paid more.
25 So when a woman becomes a mother, she gets paid
59 1 less. When a man becomes a father, he gets paid more. And
2 married women tend to make less as well for various
3 reasons. So that's usually what the statistics in marital
4 status are referring to.
5 PANELIST: And about ten years ago or maybe even
6 more now, the EEOC recommended to business organizations to
7 update their applicant interviewing applications. Because
8 years ago, you could ask, you know, are you married? How
9 many children? Do you have a car? And so forth and so
10 forth.
11 If you really have updated your HR policies to be
12 inclusionary policies and not to lead you to litigation,
13 you no longer ask those questions because it is supposed to
14 be equity and parity. You know, whether you have a child
15 or not, whether you're thinking about having children or
16 not, has nothing to do with your skills and ability and the
17 performance that you can bring forth.
18 So that's why also I look at inclusionary
19 policies for HR. Are your policies still 15, 20 years old?
20 Have you updated them? And what do your interviewing
21 applications and interviewing questions look like? Because
22 they very easily can get you into trouble.
23 And if they haven't been updated, that also then
24 starts to feed that culture that's already there because
25 you're already asking questions that you should not be
60 1 asking.
2 REPRESENTATIVE MACKENZIE: I think that's great
3 advice. You know, unfortunately that type of
4 discrimination still does occur in the interviewing
5 process.
6 PANELIST: Yes, it does. And various legislation
7 pending in the Legislature now -- and I apologize for not
8 having the bill numbers.
9 MINORITY CHAIRMAN KELLER: It's Representative
10 Snyder's bill.
11 PANELIST: Oh, yeah. Well, please don't let me
12 speak for you.
13 MINORITY CHAIRMAN KELLER: I was just going to
14 ask the Chairman if he's interested in this issue, that
15 Representative Snyder has a bill addressing it if the
16 Chairman would like to hold a hearing on that bill also.
17 REPRESENTATIVE SNYDER: Yes. Thank you,
18 Mr. Chairman. House Bill 1984 we did have a hearing on it
19 in this committee. And, you know, at the time there was
20 testimony saying just what Deborah has said. You know, if
21 you're following the current law and your HR departments
22 are up to date, you know, all is well and good.
23 However, I agree with you, Chairman Mackenzie.
24 That's not happening.
25 REPRESENTATIVE MACKENZIE: Right.
61 1 REPRESENTATIVE SNYDER: And House Bill 1984 would
2 ensure that it does happen. Because as I listen to your
3 stories and, you know, you have employers that have said,
4 we pay the man more because he has a family, well, if
5 you're not allowed to ask that in an interview under
6 current law, how does he know he has a family when he set
7 that pay scale? So I would encourage support of House Bill
8 1984.
9 Thank you, Mr. Chairman.
10 REPRESENTATIVE MACKENZIE: Thank you,
11 Representative Snyder.
12 Seeing no further questions, I would like to
13 thank all of our panelists who have joined us here today.
14 We appreciate your testimony very much. And we thank you
15 again.
16 MS. HUNT: Thank you.
17 MS. FRIETSCHE: Thank you.
18 MS. McLANE: Thank you.
19 MS. VEREEN: Thank you.
20 REPRESENTATIVE MACKENZIE: All right.
21 We are going to proceed with our second panel.
22 First we have Alex Halper with the Pennsylvania Chamber of
23 Business and Industry.
24 We have Neal Lesher with the National Federation
25 of Independent Businesses here in Pennsylvania.
62 1 And we have Elizabeth Milito, also with the
2 National Federation of Independent Businesses. She is with
3 the Small Business Legal Center.
4 Thank you for joining us. We will start with
5 Alex Halper.
6 MR. HALPER: Thank you very much, Chairman
7 Mackenzie, Chairman Keller, and members of the committee,
8 and Representatives Molchany and Sims. Thank you again for
9 inviting me to testify today on House Bill 1890. Again, my
10 name is Alex Halper. I'm director of Government Affairs
11 for the Pennsylvania Chamber of Business and Industry.
12 House Bill 1890, as we've discussed already,
13 amends Pennsylvania's equal pay law. This law generally
14 prohibits employers from discriminating between employees
15 on the basis of sex by paying an employee less than the
16 wages paid to an employee of the opposite sex doing the
17 same work. Similar protections from discrimination are
18 provided employees under the Federal Equal Pay Act and
19 Title VII of the Civil Rights Act of 1964, as well as
20 several other Federal statutes.
21 The PA Chamber strongly opposes discrimination in
22 the workplace; but we also believe an important principle
23 of Pennsylvania's Equal Pay Law is balancing policies and
24 enforcement against discrimination with the right of
25 employers to set wages, to set salaries, to set HR policies
63 1 within their companies that they believe to be in the best
2 interest of their companies.
3 With that said, we do have very serious concerns
4 with some of the amendments that are proposed in House Bill
5 1890, which we believe will fundamentally change the
6 application and enforcement of the Equal Pay Law and its
7 impact on employers throughout Pennsylvania.
8 Currently, the Equal Pay Law requires equal pay
9 for equal work. I know we've gone into this a little bit
10 but just want to reiterate that there are several
11 exceptions in the law. And the equal pay for equal work
12 standard applies unless wages are based on a seniority
13 system, a merit system, a system that measures earnings by
14 quality or quantity of production or a differential based
15 on any other factor other than sex.
16 And the factors other than sex exemption is
17 really the crux, I believe, of the Equal Pay Law. And it's
18 really critically important to maintaining that principle
19 within the Equal Pay Law that private employers have the
20 right to make salary and wage decisions.
21 We do believe that House Bill 1890 would
22 effectively eliminate that exception from the law. I mean,
23 the language would still be in there, but the standard that
24 is put in place for an employer to actually use that
25 defense if an allegation of sex discrimination is brought
64 1 against them, their ability to use that is, we believe,
2 effectively eliminated.
3 There are countless factors and circumstances
4 that employers might consider when determining wages of
5 prospective or current employees which are not based on
6 seniority, merit, quality, or quantity but are most
7 certainly not based on sex discrimination.
8 In my full written testimony, I went through just
9 a handful of the scenarios that some of our members talked
10 to me about that occur within their businesses. So I won't
11 go into all of them right now. But I think it's important
12 to consider some of these situations.
13 And even House Bill 1890 acknowledges that those
14 situations occur by listing several potential factors as
15 examples of what might constitute a, quote, bona fide
16 factor, including education, training, or experience. And
17 the problem or the irony is that even an employer citing
18 one of those reasons as why a pay disparity exists, reasons
19 that the legislation has deemed to be appropriate for a pay
20 disparity, even using those reasons, they would find it
21 very difficult to fight an allegation of sex discrimination
22 because the framework that is established under House Bill
23 1890 we believe is really unrealistic and onerous to
24 employers.
25 I'm going to go through the steps that an
65 1 employer would have to take in order to disprove sex
2 discrimination if House Bill 1890 becomes law. And these
3 are not in chronological order but I think just a natural
4 stepping stone that an employer would have to consider.
5 First, an employer defending against an
6 allegation would have to demonstrate that a factor other
7 than sex used to determine wage rates is, quote, bona fide.
8 Those terms are not defined. And, frankly, even if they
9 were defined, they are wide open to interpretation.
10 I spoke to one small business owner. And
11 frankly, this was one of the less, I guess, sympathetic
12 scenarios that I heard. They hired their son to an
13 entry-level position and paid him 10 percent higher. They
14 didn't sound particularly proud about that. But that's
15 something that they did. And they're grooming him to take
16 over this small business. You know, I'm not sure if I
17 would consider that bona fide. But I wouldn't consider it
18 sex discrimination either.
19 So let's say an employer proves that a wage
20 disparity is in place for a bona fide reason. An employer
21 will then be required to demonstrate and prove that a
22 factor is specifically job related with respect to the
23 position in question and consistent with business
24 necessity. And this is where we believe these requirements
25 will no doubt enhance an employer's exposure to liability
66 1 under the Equal Pay Law.
2 So just a handful of the examples we heard.
3 These were sort of alluded to in some of the previous
4 testimony. What if an employer is set to hire a man and a
5 woman for two comparable positions and the woman negotiate
6 for and is granted an extra dollar an hour to match the
7 rate of her previous job. Many job applications or many
8 notices ask for salary history. That essentially would not
9 be -- you wouldn't be able to consider that under this
10 framework.
11 We also heard about market forces. You know,
12 market forces, what's called a loophole in this scenario.
13 Market forces are a reality in business. Let's say a man
14 was hired to a position before the economic recession --
15 and, you know, when it was a job applicant's market, wages
16 were generally higher -- and a woman was hired during the
17 past four or five years during a very sluggish recovery
18 when wages have been lower?
19 Should that employer be forced to pay that same
20 entry-level wage? Market forces is not a loophole. It's a
21 reality that employers all over Pennsylvania and all over
22 the country are constantly operating under.
23 One member of ours kind of summed it up this way:
24 Pay decisions are rarely ever based on one factor. A woman
25 may have more education. A man may have more experience.
67 1 A woman may have been on the job longer. A man may have
2 had a higher wage at a prior job that the employer wants to
3 match. There is no practical way that any employer,
4 especially a small employer, could ever hope to justify any
5 salary differential which is based on multi-varied analysis
6 of different qualifications at different times. Putting
7 the burden of proof on the employer to prove the absence of
8 discrimination in this circumstance would be forcing the
9 employer to meet impossible standards. That's the end of
10 the quote.
11 Finally under this legislation, let's say an
12 employer successfully demonstrates that the reason for some
13 pay disparity was bona fide job related with respect to the
14 position in question and consistent with business
15 necessity. They could still violate the Equal Pay Law if
16 the aggrieved employee, or their attorney, had proposed an
17 alternative business practice to eliminate the disparity
18 that the employer chose to not adopt.
19 When I explained that to some of our employer
20 members, they said, well, everyone is just going to suggest
21 everyone's wages go up. That will be the alternative
22 business model. Just give everyone a raise to meet that
23 same standard. Of course, that's just not the way it
24 works. An employer may not have the resources to grant
25 across-the-board raises or frankly they may not think that
68 1 everyone deserves a raise, especially if they're using one
2 of the factors that are listed in the legislation,
3 experience, education, etc.
4 So I guess in summary, the Equal Pay Law protects
5 employees from discrimination based on sex as it relates to
6 wages and currently acknowledges that pay disparity
7 sometimes exists for reasons other than discrimination and
8 provides reasonable standards by which employers can defend
9 their wage practices and policies if there's an allegation
10 against them.
11 Under House Bill 1890, the purpose and impact of
12 the Equal Pay Law would be drastically altered. And an
13 employer sued under the Equal Pay Law, if amended by House
14 Bill 1890, would not only be forced to prove a negative
15 that discrimination based on sex did not occur but would
16 also be required to prove compliance with standards that
17 are vague, open to very broad interpretation, and too often
18 we think would be really impossible to reach.
19 Again, I thank you for the opportunity and the
20 invitation to testify. And I would be happy to answer any
21 questions.
22 REPRESENTATIVE MACKENZIE: Thank you, Mr. Halper.
23 Next we have Neal Lesher with the NFIB of
24 Pennsylvania.
25 MR. LESHER: Thank you, Mr. Chairman.
69 1 Thank you, Chairman Mackenzie and Chairman
2 Keller, for holding this hearing. And thank you to the
3 prime sponsor for inviting us to testify as well.
4 My name is Neal Lesher. I'm the legislative
5 director for NFIB Pennsylvania. I'm very excited to be
6 joined by Beth Milito from our Legal Center in Washington,
7 D.C. Beth is a senior executive counsel with our Legal
8 Center and works with small businesses on a daily basis on
9 a host of topics, including equal pay and
10 anti-discrimination wage and hour claims and wrongful
11 termination suits.
12 We're going to kind of split up our testimony.
13 I'm going to talk about a few things. And then I'm going
14 to kick it over to Beth.
15 Just a brief overview of NFIB. NFIB is the
16 nation's leading small business advocacy organization. We
17 represent members in Washington, D.C., and all 50 State
18 Capitols, founded in 1943 as a non-profit, non-partisan
19 organization. NFIB's mission is to promote and protect the
20 rights of its members to own, operate, and grow their
21 businesses. NFIB represents 350,000 independent business
22 owners throughout the United States, including 15,000 right
23 here in the Commonwealth.
24 The typical NFIB member employs one to five
25 employees, reports gross sales of about $350,000 annually.
70 1 And we represent really the gamut from dry cleaners to
2 convenience store operators, small manufacturers, farmers,
3 lawyers, plumbers, contractors, really any small business
4 that you can think of.
5 First we want to make it clear that NFIB supports
6 equal pay. We believe that an equal day's work should get
7 an equal day's pay. But we cannot support a burdensome
8 overreach into the employer and employee relationship that
9 puts employers at greater risk of frivolous litigation.
10 And for those reasons, we do not support House Bill 1890 in
11 its current form. And we're going to outline a few of the
12 reasons today.
13 First, as we've already heard, it is already
14 against the law and has been against the law for 50 years
15 to discriminate against women in setting pay. We've heard
16 all of these laws already. We have the State Equal Pay
17 Law. We have the State Human Relations Act. We have the
18 Federal Equal Pay Act. We have Title VII of the Civil
19 Rights Act.
20 And in 2009, Congress passed the Lily Ledbetter
21 Fair Pay Act, which extended the statute of limitations for
22 employees to bring forth litigation, which has
23 significantly increased the risk of litigation on small
24 employers.
25 Also, we've heard a number of statistics today.
71 1 And I would just caution that, you know, there are a number
2 of reports out there on equal pay. And some of the
3 statistics that we heard today we believe are somewhat
4 misleading and are used to jump to the conclusion that
5 employers are discriminating and that we need a broad-based
6 government solution to stop it.
7 According to a 2009 report that was commissioned
8 by the U.S. Department of Labor, there are a number of
9 factors that can lead to the gender pay inequity. And
10 those include the fact that a larger percentage of women
11 tend to work in part-time jobs. A larger percentage of
12 women leave the workforce at some point for either
13 childbirth, to care for children, or to care for elderly
14 relatives and that women tend to look for more
15 family-friendly employment policies including better
16 benefits, such as health care for their families, that may
17 include a tradeoff in salary.
18 The study concluded that after adjusting for
19 variables that can be measured and controlled for, that the
20 unexplained wage gap is between 4.8 percent and 7.1
21 percent. So we know there is an unexplained wage gap.
22 It's not the 54 cents on the dollar that I see over here in
23 some of these counties.
24 We think it's important that when we talk about
25 statistics, that we do control factors that we can explain
72 1 and have a more honest conversation about the real wage gap
2 that exists and that it's not an overly inflated number.
3 I've also talked to a number of our members in
4 preparation for this hearing. And I've had a number of
5 great conversations with them about how they might react
6 should this law become enacted. And the one thing that
7 rang true in all those conversations is that small
8 businesses are not like large corporations.
9 You know, I've heard a couple times the position
10 of senior vice president for HR brought up, well, our
11 members don't have a vice president for HR. They have
12 Kathy who does accounts payable. Marketing does the
13 Twitter account and also does some of the Human Resources
14 as well.
15 And a number of our members told us that look,
16 you know, unlike large corporations, we don't have
17 identical positions across our business. We have five
18 employees. And there's a lot of cross-training that
19 occurs. It's unlike a Fortune 500 company where you might
20 have 100 accountants, and you can easily determine what an
21 accountant is. It's very difficult for a small employer to
22 say that this position is equal to that position because
23 they are doing different things.
24 And actually, as one of our members who owns a
25 foundry along with her sister told me, I've got welders who
73 1 can grind but grinders who can't weld. I didn't understand
2 that, but she did. And she was very concerned about being
3 taken into court and having to explain to a court that may
4 not understand all the intricacies of her business why some
5 of those factors might exist.
6 So with that, I'm going to turn it over to Beth
7 who's going to talk a little bit more about some of the
8 legal implications that small businesses might face under
9 this legislation.
10 Thank you.
11 MS. MILITO: Thank you.
12 And thank you, Chairman Mackenzie, Chairman
13 Keller, and the members of the committee, for inviting us
14 to appear here this morning.
15 I work in NFIB'S Small Business Legal Center.
16 I've been there for over ten years. And the Legal Center
17 is a public interest law firm that's dedicated to
18 representing small businesses in the courts and also
19 providing educational and compliance assistance to small
20 businesses so they're aware of their rights and their
21 obligations under Federal and state laws.
22 NFIB and its members support equal pay for equal
23 work. But House Bill 1890 doesn't provide paycheck
24 fairness for women. In fact, it will cut flexibility in
25 the workplace for working parents and curtail merit pay
74 1 that rewards good work, the very things that are important
2 to us.
3 Here's why. First, it is already illegal to
4 discriminate on the basis of gender. It's been against the
5 law to pay a woman less than a man with comparable
6 experience in the same job since passage of the Federal
7 Equal Pay Act in 1963 followed thereafter by the Equal Pay
8 Law here in Pennsylvania.
9 The fix proposed by House Bill 1890 then won't
10 change that. It would, however, tightly regulate how
11 employers can pay their employees. This law will not
12 create equal pay but it will make it nearly impossible for
13 employers to tie compensation to work quality,
14 productivity, and experience. It will reduce flexibility
15 in the workplace and make it far easier to submit a
16 frivolous claim that lines the pockets of lawyers.
17 Ultimately this bill will hurt all workers and
18 most particularly small businesses. Today I'd like to
19 discuss NFIB's two biggest concerns with the bill; namely,
20 the signature modification made to the factor other than
21 sex defense and the anti-retaliation provision.
22 The bill amends the Equal Pay Law to limit
23 allowable bona fide factors for wage differentials to
24 education, training, or experience and further requires
25 that the employer demonstrate that the factor, one, is not
75 1 based or derived from a sex-based differential and
2 compensation, is job related with respect to the position,
3 and is consistent with business necessity.
4 These revisions essentially eliminate the factor
5 other than sex defense, replacing it with an unattainable
6 standard of an affirmative employer showing that any
7 individual wage difference was job related and required by
8 business necessity and not derived from a sex-based
9 differential and compensation.
10 In doing so, the act imports a business necessity
11 plus standard for an employer to defend every individual
12 pay decision even where no evidence of discrimination is
13 required to be shown. This would allow judges and juries
14 to second guess employers and the marketplace as to the
15 relative worth of job qualifications and individual pay
16 decisions.
17 This stacks the decks substantially against the
18 employer and seems to turn due process on its head. Small
19 employers will become targets for lawyers seeking
20 substantial settlements without even having to prove that a
21 business intentionally discriminated against women.
22 I want to talk a little bit about lawsuits
23 because lawsuits threatened or filed -- and it's not
24 necessarily a lawsuit that's filed in court. It's the
25 demand letter that terrifies our members. That's what I
76 1 hear about most often. I've heard story after story of
2 small business owners spending countless hours and
3 significant sums of money to settle, defend, or work to
4 prevent a lawsuit.
5 And our members are loathe to write a check to
6 settle what they perceive to be a frivolous claim. But
7 upon hearing how much it's going to cost and how long it's
8 going to take to defend against a claim, they throw their
9 hands up and in the end, more often than not, will settle a
10 claim often before a lawsuit is even filed because in the
11 end, time is money to a small business owner.
12 We need to remember that small business owners
13 generally do not have in-house counsels. They do not have
14 in-house HR expertise. They do not have a member of the
15 Society of Human Resource Management employee on their
16 staff. The person in the office -- and it may be the
17 business owner's spouse, husband or wife -- is handling the
18 HR matters along with the accounts payable, the accounts
19 receivable. They are doing it all.
20 Small business owners are more vulnerable because
21 of this to lawsuits I think because attorneys know it can
22 fetch a quick settlement. And in many cases, these factors
23 really just make them more vulnerable targets for
24 plaintiffs.
25 House Bill 1890 also adds a provision forbidding
77 1 employers from discharging or discriminating against an
2 employee who files a complaint or participates in any
3 action under the Equal Pay Law.
4 We believe this could lead to employees who may
5 suspect that they will be terminated for poor performance
6 filing frivolous claims under the Equal Pay Law in order to
7 make it impossible for the employer to terminate them.
8 Under House Bill 1890, as worded currently, that employee
9 could not be discharged for any reason because the language
10 does not specify that the employee may not be discharged
11 because they filed a complaint.
12 I want to make it clear that we work very hard at
13 NFIB to ensure, again, that our members are aware of the
14 rights and obligations under Federal and state laws,
15 including anti-retaliation. We take that very seriously.
16 But the language as currently written in the bill does not
17 specify that the employee may not be discharged because
18 they filed the complaint. It's just they filed a
19 complaint.
20 In closing, while we agree with the principle of
21 equal pay, we believe this legislation would ultimately
22 impose enormous burdens and risks on employers, devalue
23 important factors in establishing wages, such as training,
24 education, and skill and flexibility, sometimes personal
25 choices made by employees, and expand litigation
78 1 opportunities for attorneys.
2 Thank you again for the opportunity to be here
3 today.
4 REPRESENTATIVE MACKENZIE: Thank you, Ms. Milito,
5 for your testimony.
6 MS. MILITO: You're welcome.
7 REPRESENTATIVE MACKENZIE: We are going to move
8 to questions now.
9 The first questions are from Chairman Keller.
10 MINORITY CHAIRMAN KELLER: Thank you,
11 Mr. Chairman.
12 Mr. Lesher, I guess you believe in the Mark Twain
13 quote that there are three different kinds of lies: Lies,
14 damn lies, and statistics. We heard from the panel before
15 you of all the statistics. And they have footnoted every
16 one of them. In your belief that gap is much smaller. Do
17 you have any footnotes?
18 MR. LESHER: If you look at our testimony, we did
19 footnote to the study from the Department of Labor that I
20 referenced. I have a copy of that study here today. And
21 there's a number of other studies. I didn't want to get
22 into a back and forth on statistics. I just wanted to make
23 the point that when you talk about aggregate numbers,
24 sometimes that can be misleading.
25 I'm not trying to make the claim that there isn't
79 1 in any way a gender pay disparity. But when we see some of
2 these exaggerated numbers like the 54 cents on the dollar,
3 we know that that doesn't account for certain factors that
4 can easily be explained with data that are
5 nondiscrimination based. That's really my point.
6 MINORITY CHAIRMAN KELLER: Okay.
7 MR. LESHER: But there is a footnote to the study
8 that I referenced, yes.
9 MINORITY CHAIRMAN KELLER: And, Mr. Halper, you
10 believe that there's not a disparity, that it is just a
11 business decision that's being made, that people make wage
12 decisions and it's not based on any gender discrimination.
13 This disparity that a lot of people say exists, you're
14 saying that's just a business decision?
15 MR. HALPER: Well, I think you have countless
16 situations where employers are making wage decisions that
17 might have the impact of a paid disparity between sexes or
18 a pay disparity between any type of employee but which is
19 not sex discrimination.
20 MINORITY CHAIRMAN KELLER: Okay.
21 MR. HALPER: It's a matter of -- and this comes
22 up in a number of issues that we discuss -- a disparate
23 treatment versus a disparate impact. And even the issues
24 again that are enumerated in the legislation, experience,
25 training, education, those are all, I believe, to be bona
80 1 fide, legitimate factors and they are included in the
2 legislation as such.
3 But considering those might create pay
4 disparities. You might have two individuals applying for
5 the same job. Perhaps one of the applicants just barely
6 meets the job requirements but another of the applicants
7 goes beyond and is even more qualified. If they happen to
8 be members of the opposite sex, then that may create a pay
9 disparity.
10 I simply don't believe that the Equal Pay Law was
11 meant to make that type of scenario sex discrimination that
12 enhances an employer's liability.
13 MINORITY CHAIRMAN KELLER: So you know me, for my
14 small mind, right, all the statistics we've seen and all
15 the testimony we've heard, you don't believe that is
16 actually a discrimination against women. You're saying
17 that that is just basically a business decision that is
18 being made by your members?
19 MR. HALPER: I'm not sure. But I would say that
20 a pay disparity that exists between men and women, that in
21 the vast majority of cases, that disparity does not exist
22 because employers discriminate against women.
23 MINORITY CHAIRMAN KELLER: Okay. Thank you.
24 Thank you, Mr. Chairman.
25 REPRESENTATIVE MACKENZIE: Thank you, Chairman
81 1 Keller.
2 And to Mr. Lesher, the study that Chairman Keller
3 was inquiring about, if you could provide that to the
4 committee, we would appreciate that.
5 MR. LESHER: Sure.
6 REPRESENTATIVE MACKENZIE: The next questions are
7 from Representative Molchany.
8 REPRESENTATIVE MOLCHANY: Thank you,
9 Mr. Chairman.
10 And thank you all for presenting a very
11 interesting perspective. And just on a personal note, for
12 the folks who represent the small business interests, I
13 spent 12 years working in the non-profit sector.
14 Professionally I was a non-profit executive prior to
15 running for public office and serving in the General
16 Assembly.
17 I'm very familiar with the jack-of-all-trades
18 master-of-none concept. I worked in offices with only four
19 employees who had to take on multiple job responsibilities.
20 And I will say as an executive director, I did everything
21 in my power to make sure everybody was compensated
22 appropriately.
23 Just a couple of things I wanted to make note of.
24 Because one of the things that I was going to ask a
25 question about was market forces. Market forces do apply
82 1 to all employees, men and women, correct? That's just a
2 point of clarification.
3 MS. MILITO: Yes. Most definitely.
4 REPRESENTATIVE MOLCHANY: Okay.
5 And I know it came up a couple of times that, you
6 know, there's -- and maybe I'm mischaracterizing this.
7 Across the board salary increases are a concern to an
8 employer if they have to comply with the Equal Pay Law.
9 Maybe I'm incorrect in asking this. But is there the
10 implication that a company that's not in compliance with
11 the Equal Pay Law would have to increase salaries of women
12 to meet that of their male counterparts to comply?
13 PANELIST: I believe that that type of
14 alternative business model could certainly be suggested,
15 that all wages across the board are increased to make up
16 for pay disparity. And, as I said, particularly in a
17 business that operates on thin profit margins, that simply
18 may not be feasible.
19 But even a very profitable company -- again, this
20 gets to the principle of the Equal Pay Law that we want to
21 address and eliminate sex discrimination. But we want to
22 maintain the ability of an employer to set wages, set
23 salaries, and different policies that they think is in the
24 best interest of their business.
25 And if that means giving somebody a raise, then
83 1 they shouldn't be required to give everybody else a raise
2 because then what does the raise accomplish.
3 REPRESENTATIVE MOLCHANY: Should they be required
4 to decrease salaries to match employees that are making
5 less for the same jobs?
6 PANELIST: I believe the Equal Pay Law prohibits
7 across-the-board decreases.
8 MS. MILITO: If I could add on to that.
9 REPRESENTATIVE MOLCHANY: Sure.
10 MS. MILITO: That would not be a very wise
11 business decision I would say to decrease salaries of any
12 member.
13 REPRESENTATIVE MOLCHANY: Right. I would hope
14 not.
15 The only other question I have is I want to check
16 in with the Pennsylvania business, you know, based on the
17 earlier testimony of Deborah that I don't believe employers
18 maliciously don't pay equally. I think that getting the
19 information is sometimes a shock as evidenced by the phone
20 call she received from employers that said thank you for
21 bringing this to my attention.
22 Has the Pennsylvania Chamber ever surveyed its
23 members about their internal policies, you know, their HR
24 policies, saying, do you ask questions about marital status
25 in your HR policies? Do you adhere to more modern HR
84 1 practices, you know, that could reduce the pay gap? How
2 many men versus women work in your companies that you
3 represent? What is the pay disparity? Is there a pay
4 disparity?
5 I mean, has the Pennsylvania Chamber ever looked
6 at that proactively to understand what's going on within
7 its own membership? I would love to see that data and
8 those numbers because I do believe that they would want to
9 make it right.
10 MR. HALPER: We typically do one survey a year of
11 our members. That's looking very broadly at the business
12 climate in Pennsylvania. And I think in the past we've
13 found that any more surveys, our response rate drops
14 considerably.
15 I will say -- and this has come up in other
16 hearings of this committee -- that we hold regular seminars
17 and conferences that focus on HR policy. We have HR
18 experts and HR attorneys who come and make presentations
19 and speak to the very things that we're talking about
20 today, how important it is that CEOs and HR directors and
21 everyone else is aware of what's happening and is taking
22 steps to ensure that there is fairness and equity within
23 the workplace.
24 Questions that are asked during a job application
25 process, you know, not only do not open an employer up to
85 1 liability but is also a good business practice and is fair
2 and consistent with the goals of the business to be a good
3 member of the community. So those are principles that we
4 do work to disseminate within our membership.
5 REPRESENTATIVE MOLCHANY: I'm sorry. Also I
6 wanted to ask when you do such surveys and you find out
7 that information from your members, do you also ask for
8 information on your members' maternity leave policies,
9 things that don't necessarily -- maternity, paternity
10 leave, you know, may disproportionally impact women if
11 they're not equitably levied.
12 MR. HALPER: Those are topics that are covered in
13 many of the conferences and seminars that we put on and
14 some of the materials that we create or send out to our
15 membership. Again, in terms of surveying, we do an annual
16 economic survey that generally does not get into those
17 types of specific questions. But we do try to address
18 those issues from an educational standpoint.
19 REPRESENTATIVE MOLCHANY: Thank you.
20 Thank you, Mr. Chairman.
21 REPRESENTATIVE MACKENZIE: Thank you,
22 Representative Molchany.
23 Representative Donatucci.
24 REPRESENTATIVE DONATUCCI: Thank you,
25 Mr. Chairman.
86 1 And thank you for your different perspective.
2 I'm going to make two comments first and then ask a
3 question.
4 I believe that House Bill 1890 is really
5 concerned with equal pay for equal work with equal
6 qualifications. So a lot of the rhetoric I just heard
7 isn't making an impact on me.
8 No. 2, even though everybody keeps saying it's
9 illegal to pay a woman differently, we have cases like down
10 in Florida where Publix supermarkets had to pay $81.5
11 million in damages to female employees and to change all
12 their policies in their workplace. So it is happening even
13 though we're saying it isn't.
14 But now my big question is to Mr. Lesher. You
15 had said that women tend to value family-friendly
16 employment policies including better benefits such as
17 health care with a tradeoff in salary. Well, I don't know
18 many men with children who are making less money because
19 they want more insurance. And if you could give me
20 examples of that, I'd appreciate it.
21 Thank you.
22 REPRESENTATIVE MACKENZIE: Thank you,
23 Representative Donatucci.
24 Representative Delozier.
25 MR. LESHER: Well, I mean, that's directly from
87 1 the study which we'll provide to the chairman. I mean,
2 it's 90 pages really.
3 REPRESENTATIVE DONATUCCI: They're saying women.
4 Is there any study with men that are doing that same
5 tradeoff?
6 MR. LESHER: Yeah. The same tradeoff could
7 certainly happen for either gender. I think what the study
8 suggests is that statistically women are more prone to take
9 that tradeoff than men.
10 REPRESENTATIVE DONATUCCI: Thank you.
11 MR. HALPER: If I may add, Mr. Chairman.
12 We also heard similar examples where an employer
13 might have an option at the end of the fiscal year of a
14 bonus or raise or more vacation days. Or you might offer
15 to an employee the option of a raise or a more flexible
16 work schedule. Again, the option is out there. But the
17 possibility exists that that could create a pay disparity.
18 Again, the sex of the employees may never enter
19 the equation when an employer is making those decisions and
20 providing those options to his employees. But under the
21 framework established in this legislation, an employer
22 could be violating the Equal Pay Law.
23 REPRESENTATIVE DONATUCCI: Okay. Well, my whole
24 thing is if you're giving that option to men and women
25 equally, then there shouldn't be a problem with it.
88 1 PANELIST: Well, if there is -- I'm sorry. If I
2 may. If a pay disparity does exist, then, again, an
3 employer would have to demonstrate that the pay disparity
4 was due to a bona fide factor, was consistent with business
5 necessity, was specifically related to the job.
6 And again, the business necessity threshold can
7 be extremely high. We're talking about, you know,
8 necessary for the business. And a policy of allowing an
9 employee to choose between a flexible work schedule or a
10 higher salary or vacation days or a bonus, you know, I
11 don't think an employer can make the case that this is
12 necessary for the survival of his or her business.
13 But again, under this framework, it could be
14 shown that this was not a business necessity and therefore
15 the pay disparity is not legitimate and a violation has
16 occurred.
17 REPRESENTATIVE DONATUCCI: Thank you.
18 REPRESENTATIVE MACKENZIE: Thank you,
19 Representative Donatucci.
20 Representative Delozier.
21 REPRESENTATIVE DELOZIER: Thank you very much.
22 I have more of a statement than an actual
23 question primarily because I know I put some questions to
24 the sponsor and we're going to work on that.
25 And I guess I would put out there that hearing
89 1 both sides of this issue, I think that no one can disagree
2 that there's any intention -- even the sponsor has
3 mentioned the fact that the intent of an employer is not to
4 necessarily purposely discriminate against one individual
5 based on gender.
6 But I would also say that in reading the bill and
7 the little bit of what I was going to mention was just
8 brought up in the sense of -- especially if you're
9 negotiating bonuses or negotiating stock options or you're
10 negotiating anything in a pay scale sometimes that does
11 impact what your base salary is.
12 And according to what I'm reading here, the only
13 three exceptions are education, training, or experience.
14 And it doesn't take into consideration the fact that there
15 may have been some negotiation on a job to equally pay
16 commensurate with what their experience is and everything
17 but also giving them the option as on employee to choose,
18 which I think is a good thing in business that we do have
19 some of those options. And I wouldn't want to take them
20 away just simply because a company is afraid that if
21 Employee X and Employee Y do not make exactly $30,000 each
22 that there's go ing to be a fear for a suit.
23 And I would just put out there that I look
24 forward -- because I do think the issue is extremely
25 important. And I do want to be proactive in looking at the
90 1 fact that we need to make sure that not only are the
2 employees treated fairly and equally, because I think that
3 that is a good basis and I think many of the employers
4 would agree, but also the fact -- you know, I've been a
5 victim of a frivolous lawsuit that drug through the courts.
6 It was dismissed but kept getting dragged on and on and on.
7 And the cost kept rising for me but not the person that
8 filed the suit.
9 I don't want that to happen to a business either
10 because we need small businesses in our community. They
11 are the basis for our jobs. And we need to have a fair
12 equation.
13 So I would just ask and look forward to working
14 with the sponsor, as well as any other entities that are
15 looking for this. I think we need to find that fair
16 balance. And if we want to have a sort of whistleblower
17 that they can't have repercussions based on someone
18 bringing to attention a company that there is inequity, I
19 think that's fair.
20 I also think that, I guess, minimizing it to just
21 education, training, and experience makes the parameters
22 very hard to get around for a business in order to be able
23 to defend themselves as to why they may have made a
24 decision. So I think there's a little bit on each side
25 that could be discussed and possibly make a stronger bill.
91 1 I appreciate that.
2 Thank you very much.
3 PANELIST: Chairman, if I could make a quick
4 comment.
5 REPRESENTATIVE MACKENZIE: Yes.
6 PANELIST: Again, just a point of clarification,
7 the education, training, and experience are not exceptions
8 to this new framework. They're simply examples that are
9 provided of what would constitute a bona fide factor.
10 Again, even if that standard is accommodated by an
11 employer, the additional standards that we've discussed are
12 far more onerous and difficult to achieve. I just wanted
13 to make that point.
14 Thank you.
15 REPRESENTATIVE MACKENZIE: Thank you.
16 And thank you, Representative Delozier.
17 Representative Gillen.
18 REPRESENTATIVE GILLEN: Thank you, Mr. Chairman.
19 Alex, Neal, Elizabeth, thank you very much for
20 your testimony. I'd just like to preface my remarks --
21 Chairman Keller and I have more in common than I realized
22 every time he shares something. He said he was going to
23 ask, I think, a small-minded question.
24 MINORITY CHAIRMAN KELLER: No, I didn't say that.
25 REPRESENTATIVE GILLEN: Okay. I thought maybe
92 1 you and I could form a caucus.
2 I guess, Elizabeth, when I heard your testimony
3 it seemed to be very rich in settlements, legal court
4 costs, and most frightening of all lining the pockets of
5 lawyers. You have a breadth of national experience, if I
6 understand correctly.
7 Could you cite examples of similar legislation
8 and share with us perhaps the consequences of that? You're
9 referencing these increased litigative costs. Do you have
10 any empirical evidence? Can you cite other states or
11 examples that would lead us to conclude that if 1890 were
12 passed in Pennsylvania that small businesses would actually
13 have their litigative costs increased?
14 MS. MILITO: There was a study done on the cost
15 of litigating and defending against an employment lawsuit.
16 And it was based on California. So it was a case study. I
17 believe it was just California state law, so claims filed
18 in the state courts based on California anti-discrimination
19 laws. And I would be happy to share that, a copy of that
20 study, with the committee.
21 And one thing I will say, too, is, you know,
22 lining the pockets of lawyers, again, the frustration I
23 hear from my members often is, it's not just, you know, I'm
24 going to -- in a settlement, I'll have to pay the
25 Plaintiff's attorney's fees, who else are they paying?
93 1 They're paying their own attorney, too. They might love
2 their attorney, but it's paying anybody to kind of make
3 this go away so they can get back on with running their
4 business, the frustration I hear.
5 And again, you know, a lot of times when they
6 hear how hard it is to defend against these claims, how
7 much it's going to cost, because, again, they're going to
8 be paying their attorney, you know, through discovery,
9 through a motion for summary judgment. Oh, we might have a
10 trial date, you know, a year from now. And then, oh, by
11 the way, you know, this is what we have to prove in court.
12 I mean, at that point it's just kind of overwhelming. And
13 it just sounds so expensive.
14 So that's why as I said, you know, settlements,
15 you know, I think look very appealing to my members because
16 they just want to make it go away.
17 But I will share a copy of the study that was
18 done in California. It was relatively recently, too.
19 REPRESENTATIVE GILLEN: I'd be very interested in
20 that.
21 MS. MILITO: Yes.
22 REPRESENTATIVE GILLEN: And I want to commend the
23 maker of the legislation, Representative Molchany. I think
24 it's certainly well intentioned. I'm encouraged to hear
25 during the course of the testimony here that it's not
94 1 malicious discrimination. There's no ill intent.
2 I live with parity every day of my life. If I
3 were to come home from the Capital with one or two trinkets
4 and I didn't have one for all five girls, I've ruined the
5 day. Certainly, if I come back, as Representative Snyder
6 well points out -- or if I come back with five items that
7 are not exactly the same in color and type and value, I
8 experience the consequences.
9 So I was very pleased with the testimony, the
10 prior testimony as well. And I want to thank both chairmen
11 for a distinguished hearing.
12 Thank you.
13 REPRESENTATIVE MACKENZIE: Thank you,
14 Representative Gillen.
15 Chairman Keller.
16 MINORITY CHAIRMAN KELLER: I will ask the
17 question I thought Representative Gillen was going to ask.
18 Representative Gillen asked the first panel if they would
19 be willing to sit down and talk business about this bill.
20 I want to ask you the same thing. Would you be willing to
21 sit down and talk about this bill with us?
22 MR. LESHER: Yes. Of course. Absolutely.
23 MS. MILITO: Definitely.
24 MR. HALPER: Yes.
25 MINORITY CHAIRMAN KELLER: Okay . Thank you.
95 1 Thank you, Mr. Chairman.
2 REPRESENTATIVE MACKENZIE: Well, thank you,
3 Chairman Keller.
4 Do we have any other questions from L&I Committee
5 members?
6 Seeing none, I would like to recognize before we
7 close, we have been in receipt of written testimony from
8 the Pennsylvania Labor & Industry, Pathways PA, the
9 professor from the University of Pennsylvania, and an
10 associate professor from Robert Morris University, and also
11 the Pennsylvania AFL-CIO. Those are all in the record and
12 available here as well for anybody who has an interest in
13 those testimonies.
14 Before we do close, I would like to recognize
15 Representative Molchany again, if you have any closing
16 remarks.
17 REPRESENTATIVE MOLCHANY: Thank you,
18 Mr. Chairman.
19 You know, I just really want to thank both
20 chairmen. I want to thank this committee for, again,
21 having a little bit of courage to sit down and hear
22 testimony on equal pay for equal work. It's just so
23 important to so many people in your community.
24 I just feel like it's been way too long since
25 we've had this conversation. And I just really want to
96 1 thank everyone who participated today, everyone who
2 attended today's hearing, and especially the members of the
3 Labor & Industry Committee, for having very thoughtful and
4 poignant questions and testimony. Thank you to our
5 testifiers as well. It's very important. And I just
6 really deeply appreciate it.
7 REPRESENTATIVE MACKENZIE: Great.
8 Well, again, Representative Molchany, thank you
9 for your leadership on this issue. We want to thank all of
10 the panelists from both of the panels that we heard from.
11 Again, good questions from the committee members. And
12 thank you to everybody who attended today and for your
13 interest in this topic as well.
14 Thank you.
15 (The following testimony was submitted in writing
16 by J. Scott Robinette, Deputy Secretary for Safety and
17 Labor-Management Relations:)
18 Chairman Scavello, Chairman Keller, and members
19 of the House Labor & Industry Committee, on behalf of
20 Secretary Hearthway, thank you for the opportunity to
21 provide written remarks on proposed legislation to amend
22 the Pennsylvania Equal Pay Law.
23 The Equal Pay Law (Act 694 of 1959) became
24 effective on March 17, 1960. The act prohibits the
25 discrimination by any employer, in any place of employment,
97 1 between employees on the basis of sex, by paying wages at a
2 rate less than the rate of an employee of the opposite sex
3 for work under equal conditions on jobs which require equal
4 skills.
5 With respect to administration and enforcement,
6 the act authorizes the Secretary to administer the
7 provisions of the law and to issue rules and regulations.
8 It provides a mechanism for the department to collect any
9 unpaid wages due, in addition to any damages, attorney fees
10 and other reasonable costs that may be awarded.
11 The act limits any action to two years from the
12 date in which the alleged violation occurred. Employers
13 are required to keep records of wages, wage rates, job
14 classifications and other terms of an individual's
15 employment and to post an abstract of the Equal Pay Law if
16 they employ individuals of the opposite sex. The
17 Department provides this mandatory posting for free on our
18 website. I also included a copy with my testimony.
19 Penalties for violating the law range from fines of $50 to
20 $200, or imprisonment of 30 to 60 days.
21 The Bureau of Labor Law Compliance (BLLC) is task
22 ed with enforcement, administration and education of labor
23 laws, including the Equal Pay Law. As such, it provides
24 employers and employees with educational materials,
25 conducts investigations, and resolves disputes when
98 1 complaints are received. Any person is entitled to file a
2 complaint alleging non-compliance with one or more
3 provisions of the act.
4 In total, BLLC received two complaints under the
5 Equal Pay Law in 2013 via the Pittsburgh office. Due to
6 the specific circumstances of the complaints, over the past
7 decade, the Department has not received a single complaint
8 under the act.
9 As you know, the Pennsylvania Human Relations
10 Commission is charged with investigating alleged charges of
11 discrimination in the workplace, so it is possible that
12 complaints are being filed there. Also, the Federal
13 Government enforces a similar law through the U.S. Equal
14 Employment Opportunity Commission, so cases could similarly
15 be filed there.
16 Mr. Chairman, thank you again for the opportunity
17 to provide information on the Equal Pay Law. Please let me
18 know if I can be of further assistance as you consider the
19 legislation before you.
20 (The following testimony was submitted in writing
21 by Janice Fanning, Professor, University of Pennsylvania:)
22 Thank you for giving me the opportunity to
23 address the very important issue raised by House Bill 1890
24 and the gender pay gap in Pennsylvania.
25 My name is Janice Fanning Madden. I am a labor
99 1 economist with extensive experience in the analysis of
2 labor markets. I am tenured as a professor of Regional
3 Science, Sociology, and Real Estate at the University of
4 Pennsylvania. I hold a Ph.D. in economics from Duke
5 University.
6 I have also served as vice provost for graduate
7 education at Penn, the chief academic officer for graduate
8 education, from 1991 to 1999. I was recently chair of the
9 Doctoral Program in Demography and associate chair of the
10 Department of Sociology at Penn. I am also currently chair
11 of the board of the American Academy of Political and
12 Social Sciences. I teach courses dealing with economics,
13 labor markets, and the relevant statistics for both
14 graduate and undergraduate students at Penn.
15 My research dealing with the effects of race,
16 gender, and urban location on labor market outcomes and
17 metropolitan variations in income distribution has been
18 published in the most prestigious economics journals.
19 I have written five books: The Economics of Sex
20 Discrimination (1972, reprinted 1975); Post-Industrial
21 Philadelphia (1990); Work, Wages and Poverty (1991);
22 Changes in Income and Inequality within U.S. Metropolitan
23 Areas (2000); and Mommies and Daddies on the Fast Track:
24 Success of Parents in Demanding Professions (2004).
25 I have lectured at the Federal Judicial Center on
100 1 the use of statistics in discrimination litigation. More
2 recently, I served on the National Research Council's
3 Committee on Measuring and Collecting Pay Information from
4 U.S. Employers by Gender, Race, and National Origin.
5 As a consultant for almost 40 years, I have been
6 retained as an expert by both plaintiffs and defendants in
7 discrimination litigation involving ethnicity, race, age,
8 and gender. These cases have involved complex statistical
9 analyses involving thousands of employees, including the
10 racial discrimination class action lawsuits against the
11 Coca-Cola Company, the Federal Deposit Insurance Company,
12 and Merrill Lynch and the gender discrimination lawsuits
13 against Salomon Smith Barney, Merrill Lynch, Livermore
14 Labs, and Los Alamos Labs.
15 In 2012, the most recent data available for the
16 gender wage gap, women working full year full time earned
17 21.4 percent less than their male counterparts. This is
18 substantially better than comparable women were doing 50
19 years ago, when they earned 39.9 percent less than their
20 male counterparts. Women's gains in the labor market over
21 the last 50 years are enormous, as they have entered jobs
22 that were previously denied them and earned more over their
23 lifetimes, contributing to their families and to the entire
24 economy.
25 Today's national gender pay gap of 21.4 percent
101 1 is still far too large. And the even larger 24.3 percent
2 gender pay gap in Pennsylvania for 2012, as shown in the
3 table below, which ranks us 35th out of 51 states and D.C.,
4 is even more disturbing. Pennsylvania's gender pay gap is
5 larger than in every bordering state, other than West
6 Virginia.
7 Pennsylvania also has a lower proportion of adult
8 women in the workforce (58.2 percent) than does the nation
9 (58.8 percent) or every bordering state, other than West
10 Virginia, which has the poorest performance of any state.
11 On average, Pennsylvania's women fare worse than the
12 nation's. There is no reason for anyone to think that the
13 earnings ability or productivity of Pennsylvania's women
14 relative to men is less than for the rest of the country or
15 our neighboring states.
16 Of course, the gender pay gaps listed in this
17 table are not necessarily entirely due to discrimination.
18 The gender pay gaps shown potentially include pay
19 differences that arise from gender differences in
20 education, experience, and training, as well as differences
21 associated with occupations and industries. Gender
22 discrimination in pay occurs, however, when employers pay
23 women, who make the same contribution to the productions of
24 goods or services as men, a lower rate.
25 Numerous scholarly studies over the years have
102 1 decomposed the overall gender pay gap into the proportion
2 arising from gender difference in experience, education,
3 training, work hours, occupations and industries, and other
4 traits of value to employers.
5 Generally, these scholarly studies show that
6 about half of the gender pay gap remains when only men and
7 women with the same education, experience, training, work
8 hours, occupations and industries are compared.
9 These studies also generally acknowledge that
10 measuring the gender wage gap only among men and women in
11 the same occupations and industries (as opposed to having
12 the same personal characteristics like education and work
13 hours) may "underestimate" the gender pay gap arising from
14 discrimination because this calculation excludes gender
15 wage differences due to discrimination in hiring and in
16 promotions.
17 For example, if an employer were to hire women
18 with Bachelor's degrees in accounting as bookkeepers and
19 men with the same credentials as accountants and then pay
20 accountants more than bookkeepers, employers would explain
21 the gender differences in wages as based on different jobs.
22 In this example, however, job or occupation
23 should not be allowed to be an explanatory factor because
24 the job title itself is being discriminatorily assigned by
25 gender. To my knowledge, no study has ever been able to
103 1 explain away the entire gender pay gap in the economy by
2 measuring the effects of all of the traits, subtracting
3 their effects, and then computing a corrected gender pay
4 gap.
5 House Bill 1890 uses the standards widely
6 accepted by economics and sociologists to measure the role
7 of gender in pay disparities. The so-called bona fide
8 factors of education and prior work experience affect
9 productivity and, therefore, wages in virtually all jobs
10 and may differ by gender for reasons outside the control of
11 any individual employer. Training that is not provided by
12 the employer is another worker trait that affects
13 productivity and wages and is also outside the control of
14 the employer.
15 Job specific requirements may provide a
16 non-discriminatory reason for a gender difference in wages
17 in some jobs but not all jobs. In some (but certainly not
18 all) jobs, narrower types of skills, such as physical
19 agility or willingness to travel, may also be bona fide
20 factors.
21 The willingness to travel across the sales region
22 is important to a job selling pharmaceuticals, but not for
23 a marketing or customer service analyst in the same
24 pharmaceutical company. The ability to run and scale
25 obstacles is important for a job as a police officer, but
104 1 probably not for a security firm supervisor.
2 Some job specific requirements that disadvantage
3 women can be changed and should not be used to justify pay
4 differences. Not too long ago, pharmacists were mostly
5 men. Today they are mostly women. The average hours
6 worked by pharmacists used to be long but are now quite
7 flexible.
8 Computer technology has allowed pharmacists to
9 share information about patients with one another, reducing
10 the need to have the same pharmacist available during all
11 opening hours of an establishment. The move to more
12 flexible hours came as women increased their representation
13 in the job.
14 The willingness to work long hours is no longer a
15 contributor to greater productivity (per hour worked) by a
16 pharmacist. Therefore, willingness to work long hours is
17 not a justification for gender wage differences among
18 pharmacists.
19 If any characteristic is not necessary to perform
20 a job, even though one gender may be more likely to have
21 the characteristic, economists and sociologists generally
22 agree that characteristic should not be used to justify a
23 gender pay gap.
24 By clarifying the factors that contribute to
25 compensation and using those factors alone to determine
105 1 whether any gender pay gap in a job is warranted, House
2 Bill 1890 stops employers from using actual or expected
3 gender differences that are not relevant to job performance
4 to support discriminatory attitudes and gender differences
5 in wages.
6 I urge passage of House Bill 1890. This bill
7 uses knowledge produced with our best science to achieve
8 the public policy goal of gender equality in the workplace.
9 (Whereupon, the hearing concluded.)
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106 1 I hereby certify that the proceedings and
2 evidence are contained fully and accurately in the notes
3 taken by me on the within proceedings and that this is a
4 correct transcript of the same.
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8 Jean M. Davis 9 Notary Public
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