Fact Sheet: How New Law Ensures Equal Pay for Women And Promotes Women’s Economic Agenda

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    President Obama

    The first piece of legislation that the President signed into law after taking office was the Lilly Ledbetter Fair Pay Act, which empowers women to recover wages lost to discrimination by extending the time period in which an employee can file a claim.  Yet a central challenge that remains to enforcing equal pay laws is that many women do not even know that they are underpaid, and therefore cannot take steps to ensure equal pay for equal work.

    That’s why the President is taking two new executive actions to help combat pay discrimination and strengthen enforcement of equal pay laws:

    • The President is signing an Executive Order prohibiting federal contractors from retaliating against employees who choose to discuss their compensation.  The Executive Order does not compel workers to discuss pay, nor does it require employers to publish or otherwise disseminate pay data – but it does provide a critical tool to encourage pay transparency, so workers have a potential way of discovering violations of equal pay laws and are able to seek appropriate remedies.
    • In addition, the President is signing a Presidential Memorandum instructing the Secretary of Labor to establish new regulations requiring federal contractors to submit to the Department of Labor summary data on compensation paid to their employees, including data by sex and race.  The Department of Labor will use the data to encourage compliance with equal pay laws and to target enforcement more effectively by focusing efforts where there are discrepancies and reducing burdens on other employers.

    Women are the primary breadwinners in 40 percent of U.S. households but are bringing home 23 percent less than their male counterparts – which means less for families’ everyday needs, less for investments in our children’s futures, and, when added over a lifetime of work, substantially less for retirement.   And the pay gap is significantly greater for women of color, with African-American women earning 64 cents and Latinas earning 56 cents for every dollar earned by a Caucasian man. That is why the Obama Administration is:

    • Combating pay discrimination.  The President made the Lilly Ledbetter Fair Pay Act the first bill he signed into law, which extended the time period in which claimants can bring pay discrimination claims and enabled countless victims of pay discrimination to seek redress where they otherwise could not.
    • Created a National Equal Pay Task Force.  In 2010, the President created the National Equal Pay Task Force to crack down on violations of equal pay laws.  Under this Administration, the government has strengthened enforcement, recovered substantial monetary recoveries, and made critical investments in education and outreach for both employers and employees.
    • Promoting the Paycheck Fairness Act.  The President continues to call on Congress to pass the Paycheck Fairness Act, commonsense legislation that would give women additional tools to fight pay discrimination.
    • Encouraging State Paid Leave Initiatives. In addition, the President’s Budget provides support for States that are considering establishing paid leave programs, as California, New Jersey and Rhode Island have done.
    • Leveraging Technology to Close the Pay Gap.  DOL, in conjunction with the Equal Pay Task Force, launched the “Equal Pay App Challenge” and invited software developers to create applications that provide greater access to pay data, deploy interactive tools for early career coaching or online mentoring, or disseminate data to help inform pay negotiations.  The winning teams created tools that (1) provide easy access to U.S. wage estimates by city, state and job title, empowering employees or applicants for employment with reliable and specific compensation information to support informed salary negotiations; and (2) supply users with current wage data and interview, resume and negotiation tools, as well as connect users to relevant social networks.
    • Expanding the EITC for Childless Workers. The Earned Income Tax Credit (EITC) is a proven tool to increase and reward work among low-income families with children.  However, childless workers – including noncustodial parents – can receive only up to $500 and must be at least 25 years old, so the credit does little to encourage work, particularly during the crucial years at the beginning of a young person’s career. The President has proposed doubling the maximum credit to $1,000, raising the income eligibility standard so the credit is available to a full-time minimum wage worker, and lowering the age limit from 25 to 21. The proposed expansion would be fully paid for within his budget and would benefit 13.5 million workers, including 6.1 million women.

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