The Most Aggressive Equal Pay Proposal in History
In America today, women who work full time are paid just 80 cents, on average, for every dollar paid to men. For Latinas it’s 53 cents, for Native American women it’s 58 cents, and for Black women it’s 61 cents. All that money adds up to more than $400,000 over the course of a woman’s career, and more than $1 million for Latinas, Native American women, and Black women.
It’s not right that young women need to work more hours to pay off their student debt. It’s not right that new mothers are penalized for taking time off to care for their children. It’s not right that women retirees have less security and accumulated wealth after working their entire careers. It’s not right that the wage gap has barely budged this entire century.
It’s not right, and it needs to change.
For too long, we’ve put the burden entirely on workers to hold corporations accountable for pay discrimination through costly lawsuits that are increasingly difficult to prove. We’ve let corporations hide their wage gaps, but forced women to stand up in court just to get the pay they’ve earned. It’s time to flip the script and finally hold corporations accountable for pay inequality in America.
Kamala Harris has a simple message for corporations: Pay women fairly or pay the price.
That’s a message she intends to put into action as president. For the first time in American history, she’ll require corporations to show they’re not engaging in pay discrimination, and fine companies that fail to close their pay gaps.
HERE’S HOW WE’LL DO IT
Companies will be required to obtain an “Equal Pay Certification” and prove they’re not paying women less than men for work of equal value.
- To receive certification, companies must demonstrate they have eliminated pay disparities between women and men who are doing work of equal value. To the extent pay disparities do exist for similar jobs, companies will be required to show the gap is based on merit, performance, or seniority–not gender. A similar assessment was performed by Glassdoor of their own pay practices, and a similar law was recently enacted in Iceland.
- In applying for certification, companies will also be required to disclose their pay policies and align them with best-practice standards. For example, companies will be prohibited from asking about prior salary history as part of their hiring process, banned from using forced arbitration agreements in employment contracts for pay discrimination matters, and must allow employees to freely discuss their pay.
- But it’s not just unequal pay for similar work that drives the wage gap. Too often, women are passed over for promotions, not hired for senior roles, or are prevented from advancing due to time they take off to care for a new child or ailing parent. These are forms of systemic pay discrimination too, and we need to shine a light on them. That’s why under our plan, companies will be required to report statistics on the percentage of women in leadership positions and the percentage of women who are amongst the company’s top earners. They will also be required to report the overall pay and total compensation gap that exists between men and women, regardless of job titles, experience, and performance. These statistics will be reported by employees’ race and ethnicity.
- Companies with 100 or more employees will be required to obtain Equal Pay Certification from the Equal Employment Opportunity Commission (EEOC) within three years of enactment, and every two years thereafter. Companies with 500 or more employees will have two years from enactment to certify.
- This will radically change the way we enforce equal pay in America. Our current equal pay laws rely exclusively on proving instances of individual discrimination and place the burden entirely on employees to hold big corporations accountable. But too often, individual cases of discrimination go unnoticed or are too difficult or expensive to prove in court, and workers face increasingly high barriers in banding together to prove their claims. Under our plan, for the first time in American history, companies will be held responsible for demonstrating they are not engaging in pay discrimination.
Companies will be fined 1% of their profits for every 1% wage gap they allow to persist for work of equal value.
- Under our plan, companies that fail to receive “Equal Pay Certification” will face a fine for every day they discriminate against their workers.
- This fine will be assessed based on a company’s average wage gap for work of equal value. For every 1% gap that exists after accounting for differences in job titles, experience, and performance, companies will be fined at 1% of their average daily profits during the last fiscal year. We estimate the plan will generate roughly $180 billion over 10 years, with revenue decreasing over time as strong equal pay practices become part of corporate culture.
- The plan is designed to close the pay gap and EEOC will provide support to help business do right by their workers. In particular, EEOC will release protocols and provide technical assistance to support companies in assessing and addressing their pay gaps. They will also work with the Office of Science and Technology Policy to award $10 million in challenge grants to innovators that design equal pay compliance tools.
Companies will be required to disclose whether they are “Equal Pay Certified” on the homepage of their websites.
- Under our plan, compliance reports will be posted publicly on EEOC’s website. These reports will empower individual employees to assess where they fall on their company’s pay scale and as in the UK, allow the public to hold corporations accountable for pay gaps.
- Companies will be required to disclose whether they are “Equal Pay Certified” on the homepage of their websites and to prospective employees. Public companies will also be required to disclose their certification to shareholders in their annual report.
Fines will be invested in building on universal paid family and medical leave.
- We must address the systemic inequalities that drive the pay gap, including the wage penalty women pay when caring for a new child or a sick parent. On average, women receive a 4% pay cut for each child they have, compared to men who receive a 6% pay increase. The lack of paid leave — for women and men — is a major driver of the wage penalty.
- America is the only industrialized nation in the world that fails to guarantee our workers any type of paid family and medical leave. Harris believes that needs to change. That’s why, as president, Harris will fight for the FAMILY Act to provide workers with up to 12 weeks of paid family and medical leave. Fines collected under our plan will help build on the FAMILY Act, increasing the percentage of wages workers receive when taking time to care for themselves or a loved one.
- In the year following a birth, new mothers who take paid leave are more likely to stay in the workforce and 54% more likely to report a pay increase. Older workers who are able to stay in the workforce when a parent needs care are able to strengthen their own retirement security by hundreds of thousands of dollars in income and retirement savings. We need to make paid family and medical leave universal in America.
To ensure equality in all workplaces, we’ll overhaul anti-discrimination laws and expand investigations of complaints to secure justice for victims of discrimination.
- The wage gap isn’t just a number: It’s the countless women across America who have been the target of discrimination. Harris believes we need to support them in every workplace, no matter the size.
- Under our plan, we’ll significantly strengthen and expand anti-discrimination protections to ensure all workers, no matter the size of their employer, are covered by Title VII of Civil Rights Act.
- We’ll also ensure women receive justice for what’s often years of discriminatory pay. Fines collected under the plan will help significantly increase EEOC enforcement of laws designed to root out individual and class-wide cases of pay discrimination, including the Equal Pay Act and Title VII of Civil Rights Act.
HARRIS WON’T WAIT FOR CONGRESS TO ACT, SHE’LL TAKE EXECUTIVE ACTION HERSELF
Harris will put this plan into action for 28 million workers by requiring companies to obtain “Equal Pay Certification” in order to receive federal contracts.
- Federal contractors will be required to receive Equal Pay Certification within two years of Harris taking office. If they don’t, they’ll be barred from competing for federal contracts valued at more than $500,000. Minnesota has a similar requirement for state contractors.
- For smaller contracts, companies will be given extra points in the contracting process for voluntary compliance.
- This means companies employing roughly 28 million workers will be required to prove they’re not paying women less than men for equal work.
- It also means these companies will be prohibited from implementing policies that perpetuate the pay gap, such as including forced arbitration agreements in employee contracts for pay discrimination matters.
This plan is the latest pillar in Harris’ agenda to increase opportunity and raise wages for working Americans. Harris has also announced the LIFT Act, the largest tax cut for working Americans in generations to provide up to $6,000 to working families each year, at up to $500 a month. She has also announced the largest federal investment to raise teacher pay in American history, which would entirely close the 11 percent pay gap between teachers and other college educated professionals.