II Calendar No. 46 117th CONGRESS 1st Session H. R. 7 IN THE SENATE OF THE UNITED STATES April 19, 2021 Received; read the first time April 20, 2021 Read the second time and placed on the calendar AN ACT To amend the Fair Labor Standards Act of 1938 to provide more effective remedies to victims of discrimination in the payment of wages on the basis of sex, and for other purposes.

1. Short title This Act may be cited as the Paycheck Fairness Act . 2. Enhanced enforcement of equal pay requirements (a) Definitions Section 3 of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 203 ) is amended by adding at the end the following: (z) Sex includes— (1) pregnancy, childbirth, or a related medical condition; (2) sexual orientation or gender identity; and (3) sex characteristics, including intersex traits. (aa) Sexual orientation includes homosexuality, heterosexuality, and bisexuality. (bb) Gender identity means the gender-related identity, appearance, mannerisms, or other gender-related characteristics of an individual, regardless of the individual’s designated sex at birth. . (b) Bona fide factor defense and modification of same establishment requirement Section 6(d)(1) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 206(d)(1) ) is amended— (1) by striking No employer having and inserting (A) No employer having ; (2) by striking the opposite and inserting another ; (3) by striking any other factor other than sex and inserting a bona fide factor other than sex, such as education, training, or experience ; and (4) by inserting at the end the following: (B) The bona fide factor defense described in subparagraph (A)(iv) shall apply only if the employer demonstrates that such factor (i) is not based upon or derived from a sex-based differential in compensation; (ii) is job-related with respect to the position in question; (iii) is consistent with business necessity; and (iv) accounts for the entire differential in compensation at issue. Such defense shall not apply where the employee demonstrates that an alternative employment practice exists that would serve the same business purpose without producing such differential and that the employer has refused to adopt such alternative practice. (C) For purposes of subparagraph (A), employees shall be deemed to work in the same establishment if the employees work for the same employer at workplaces located in the same county or similar political subdivision of a State. The preceding sentence shall not be construed as limiting broader applications of the term establishment consistent with rules prescribed or guidance issued by the Equal Employment Opportunity Commission. . (c) Nonretaliation provision Section 15 of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 215 ) is amended— (1) in subsection (a)— (A) in paragraph (3), by striking employee has filed and all that follows and inserting employee— (A) has made a charge or filed any complaint or instituted or caused to be instituted any investigation, proceeding, hearing, or action under or related to this Act, including an investigation conducted by the employer, or has testified or is planning to testify or has assisted or participated in any manner in any such investigation, proceeding, hearing or action, or has served or is planning to serve on an industry committee; (B) has opposed any practice made unlawful by this Act; or (C) has inquired about, discussed, or disclosed the wages of the employee or another employee (such as by inquiring or discussing with the employer why the wages of the employee are set at a certain rate or salary); ; (B) in paragraph (5), by striking the period at the end and inserting ; or ; and (C) by adding at the end the following: (6) to require an employee to sign a contract or waiver that would prohibit the employee from disclosing information about the employee’s wages. ; and (2) by adding at the end the following: (c) Subsection (a)(3)(C) shall not apply to instances in which an employee who has access to the wage information of other employees as a part of such employee’s essential job functions discloses the wages of such other employees to individuals who do not otherwise have access to such information, unless such disclosure is in response to a complaint or charge or in furtherance of an investigation, proceeding, hearing, or action under section 6(d), including an investigation conducted by the employer. Nothing in this subsection shall be construed to limit the rights of an employee provided under any other provision of law. . (d) Enhanced penalties Section 16(b) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 216(b) ) is amended— (1) by inserting after the first sentence the following: Any employer who violates section 6(d), or who violates the provisions of section 15(a)(3) in relation to section 6(d), shall additionally be liable for such compensatory damages, or, where the employee demonstrates that the employer acted with malice or reckless indifference, punitive damages as may be appropriate, except that the United States shall not be liable for punitive damages. ; (2) in the sentence beginning An action to , by striking the preceding sentences and inserting any of the preceding sentences of this subsection ; (3) in the sentence beginning No employees shall , by striking No employees and inserting Except with respect to class actions brought to enforce section 6(d), no employee ; (4) by inserting after the sentence referred to in paragraph (3), the following: Notwithstanding any other provision of Federal law, any action brought to enforce section 6(d) may be maintained as a class action as provided by the Federal Rules of Civil Procedure. ; and (5) in the sentence beginning The court in — (A) by striking in such action and inserting in any action brought to recover the liability prescribed in any of the preceding sentences of this subsection ; and (B) by inserting before the period the following: , including expert fees . (e) Action by the Secretary Section 16(c) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 216(c) ) is amended— (1) in the first sentence— (A) by inserting or, in the case of a violation of section 6(d), additional compensatory or punitive damages, as described in subsection (b), before and the agreement ; and (B) by inserting before the period the following: , or such compensatory or punitive damages, as appropriate ; (2) in the second sentence, by inserting before the period the following: and, in the case of a violation of section 6(d), additional compensatory or punitive damages, as described in subsection (b) ; and (3) in the third sentence, by striking the first sentence and inserting the first or second sentence . (f) Enforcement authority (1) In general The Equal Opportunity Employment Commission shall carry out the functions and authorities described in section 1 of Reorganization Plan No. 1 of 1978 (92 Stat. 3781; 5 U.S.C. App.) to enforce and administer the provisions of section 6(d) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 206(d) ), except that the Secretary of Labor, through the Office of Federal Contract Compliance Programs, may also enforce this provision with respect to Federal contractors, Federal subcontractors, and federally-assisted construction contractors, within the jurisdiction of the Office of Federal Contract Compliance Programs under Executive Order No. 11246 ( 42 U.S.C. 2000e note; relating to equal employment opportunity) or a successor Executive order. (2) Coordination The Equal Opportunity Employment Commission shall issue such regulations as may be necessary to explain and implement the standards of such section 6(d). The Secretary of Labor may issue regulations to govern procedures for enforcement of section 6(d) by the Office of Federal Contract Compliance Programs. The Secretary of Labor and the Equal Employment Opportunity Commission shall establish other coordinating mechanisms as may be necessary. 3. Training The Equal Employment Opportunity Commission and the Secretary of Labor, acting through the Office of Federal Contract Compliance Programs, subject to the availability of funds appropriated under section 11, shall provide training to employees of the Commission and the Office of Federal Contract Compliance Programs and to affected individuals and entities on matters involving discrimination in the payment of wages. 4. Negotiation skills training (a) Negotiation bias training (1) In general The Secretary of Labor shall establish a program to award contracts and grants for the purpose of training employers about the role that salary negotiation and other inconsistent wage setting practices can have on allowing bias to enter compensation. (2) Training topics Each training program established using funds under section (a) shall include an overview of how structural issues may cause inequitable earning and advancement opportunities for women and people of color and assist employers in examining the impact of a range of practices on such opportunities, including— (A) self-auditing to identify structural issues that allow bias and inequity to enter compensation; (B) recruitment of candidates to ensure diverse pools of applicants; (C) salary negotiations that result in similarly qualified workers entering at different rates of pay; (D) internal equity among workers with similar skills, effort, responsibility and working conditions; (E) consistent use of market rates and incentives driven by industry competitiveness; (F) evaluation of the rate of employee progress and advancement to higher paid positions; (G) work assignments that result in greater opportunity for advancement; (H) training, development and promotion opportunities; (I) impact of mid-level or senior level hiring in comparison to wage rates of incumbent workers; (J) opportunities to win commissions and bonuses; (K) performance reviews and raises; (L) processes for adjusting pay to address inconsistency and inequity in compensation; and (M) other topics that research identifies as a common area for assumptions, bias and inequity to impact compensation. (b) Program authorized (1) In general The Secretary of Labor, after consultation with the Secretary of Education, is authorized to establish and carry out a grant program. (2) Grants In carrying out the program, the Secretary of Labor may make grants on a competitive basis to eligible entities to carry out negotiation skills training programs for the purposes of addressing pay disparities, including through outreach to women and girls. (3) Eligible entities To be eligible to receive a grant under this subsection, an entity shall be a public agency, such as a State, a local government in a metropolitan statistical area (as defined by the Office of Management and Budget), a State educational agency, or a local educational agency, a private nonprofit organization, or a community-based organization. (4) Application To be eligible to receive a grant under this subsection, an entity shall submit an application to the Secretary of Labor at such time, in such manner, and containing such information as the Secretary of Labor may require. (5) Use of funds An entity that receives a grant under this subsection shall use the funds made available through the grant to carry out an effective negotiation skills training program for the purposes described in paragraph (2). (c) Incorporating training into existing programs The Secretary of Labor and the Secretary of Education shall issue regulations or policy guidance that provides for integrating the negotiation skills training, to the extent practicable, into programs authorized under— (1) in the case of the Secretary of Education, the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 6301 et seq.), the Carl D. Perkins Career and Technical Education Act of 2006 ( 20 U.S.C. 2301 et seq.), the Higher Education Act of 1965 ( 20 U.S.C. 1001 et seq.), and other programs carried out by the Department of Education that the Secretary of Education determines to be appropriate; and (2) in the case of the Secretary of Labor, the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3101 et seq.), and other programs carried out by the Department of Labor that the Secretary of Labor determines to be appropriate. (d) Report Not later than 18 months after the date of enactment of this Act, and annually thereafter, the Secretary of Labor, in consultation with the Secretary of Education, shall prepare and submit to Congress a report describing the activities conducted under this section and evaluating the effectiveness of such activities in achieving the purposes of this section. 5. Research, education, and outreach (a) In general Not later than 18 months after the date of enactment of this Act, and periodically thereafter, the Secretary of Labor shall conduct studies and provide information to employers, labor organizations, and the general public concerning the means available to eliminate pay disparities between men and women (including women who are Asian American, Black or African-American, Hispanic American or Latino, Native American or Alaska Native, Native Hawaiian or Pacific Islander, and White American), including— (1) conducting and promoting research to develop the means to correct expeditiously the conditions leading to the pay disparities, with specific attention paid to women and girls from historically underrepresented and minority groups; (2) publishing and otherwise making available to employers, labor organizations, professional associations, educational institutions, the media, and the general public the findings resulting from studies and other materials, relating to eliminating the pay disparities; (3) sponsoring and assisting State, local, and community informational and educational programs; (4) providing information to employers, labor organizations, professional associations, and other interested persons on the means of eliminating the pay disparities; and (5) recognizing and promoting the achievements of employers, labor organizations, and professional associations that have worked to eliminate the pay disparities. (b) Research on Gender Pay Gap in Teenage Labor Force (1) Research review Not later than 12 months after the date of the enactment of this Act, the Secretary of Labor, acting through the Director of the Women’s Bureau, shall conduct a review and develop a synthesis of research on the gender wage gap among younger workers existing as of the date of enactment of this Act, and shall make such review and synthesis available on a publicly accessible website of the Department of Labor. (2) Authority to commission studies Not later than 36 months after the date of the enactment of this Act, the Secretary of Labor, acting through the Director of the Women’s Bureau, shall request proposals and commission studies that can advance knowledge on the gender wage gap among younger workers, and shall make such studies available on a publicly accessible website of the Department of Labor. 6. Establishment of the National Award for Pay Equity in the Workplace (a) In general There is established the National Award for Pay Equity in the Workplace, which shall be awarded by the Secretary of Labor in consultation with the Equal Employment Opportunity Commission, on an annual basis, to an employer to encourage proactive efforts to comply with section 6(d) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 206(d) ), as amended by this Act. (b) Criteria for qualification The Secretary of Labor, in consultation with the Equal Employment Opportunity Commission, shall— (1) set criteria for receipt of the award, including a requirement that an employer has made substantial effort to eliminate pay disparities between men and women and deserves special recognition as a consequence of such effort; and (2) establish procedures for the application and presentation of the award. (c) Business In this section, the term employer includes— (1) (A) a corporation, including a nonprofit corporation; (B) a partnership; (C) a professional association; (D) a labor organization; and (E) a business entity similar to an entity described in any of subparagraphs (A) through (D); (2) an entity carrying out an education referral program, a training program, such as an apprenticeship or management training program, or a similar program; and (3) an entity carrying out a joint program, formed by a combination of any entities described in paragraph (1) or (2). 7. Collection of pay information by the equal employment opportunity commission Section 709 of the Civil Rights Act of 1964 ( 42 U.S.C. 2000e–8 ) is amended by adding at the end the following: (f) (1) Not later than 24 months after the date of enactment of this subsection, the Commission shall provide for the annual collection from employers of compensation data disaggregated by the sex, race, and national origin of employees. The Commission may also require employers to submit other employment-related data (including hiring, termination, and promotion data) so disaggregated. (2) In carrying out paragraph (1), the Commission shall have as its primary consideration the most effective and efficient means for enhancing the enforcement of Federal laws prohibiting pay discrimination. The Commission shall also consider factors including the imposition of burdens on employers, the frequency of required reports (including the size of employers required to prepare reports), appropriate protections for maintaining data confidentiality, and the most effective format to report such data. (3) (A) For each 12-month reporting period for an employer, the data collected under paragraph (1) shall include compensation data disaggregated by the categories described in subparagraph (E). (B) For the purposes of collecting the disaggregated compensation data described in subparagraph (A), the Commission may use compensation ranges reporting— (i) the number of employees of the employer who earn compensation in an amount that falls within such compensation range; and (ii) the total number of hours worked by such employees. (C) If the Commission uses compensation ranges to collect the pay data described in subparagraph (A), the Commission may adjust such compensation ranges— (i) if the Commission determines that such adjustment is necessary to enhance enforcement of Federal laws prohibiting pay discrimination; or (ii) for inflation, in consultation with the Bureau of Labor Statistics. (D) In collecting data described in subparagraph (A)(ii), the Commission may provide that, with respect to an employee who the employer is not required to compensate for overtime employment under section 7 of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 207 ), an employer may report— (i) in the case of a full-time employee, that such employee works 40 hours per week, and in the case of a part-time employee, that such employee works 20 hours per week; or (ii) the actual number of hours worked by such employee. (E) The categories described in this subparagraph shall be determined by the Commission and shall include— (i) race; (ii) national origin; (iii) sex; and (iv) job categories, including the job categories described in the instructions for the Equal Employment Opportunity Employer Information Report EEO–1, as in effect on the date of the enactment of this subsection. (F) The Commission shall use the compensation data collected under paragraph (1)— (i) to enhance— (I) the investigation of charges filed under section 706 or section 6(d) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 206(d) ); and (II) the allocation of resources to investigate such charges; and (ii) for any other purpose that the Commission determines appropriate. (G) The Commission shall at 18-month intervals make publicly available aggregate compensation data collected under paragraph (1) for the categories described in subparagraph (E), disaggregated by industry, occupation, and core based statistical area (as defined by the Office of Management and Budget). (4) The compensation data under paragraph (1) shall be collected from each employer that— (A) is a private employer that has 100 or more employees, including such an employer that is a contractor with the Federal Government, or a subcontractor at any tier thereof; or (B) the Commission determines appropriate. . 8. Reinstatement of pay equity programs and pay equity data collection (a) Bureau of labor statistics data collection The Commissioner of Labor Statistics shall continue to collect data on women workers in the Current Employment Statistics survey. (b) Office of Federal Contract Compliance Programs initiatives The Director of the Office of Federal Contract Compliance Programs shall collect compensation data and other employment-related data (including, hiring, termination, and promotion data) by demographics and designate not less than half of all nonconstruction contractors each year to prepare and file such data, and shall review and utilize the responses to such data to identify contractors for further evaluation and for other enforcement purposes as appropriate. (c) Department of labor distribution of wage discrimination information The Secretary of Labor shall make readily available (in print, on the Department of Labor website, and through any other forum that the Department may use to distribute compensation discrimination information), accurate information on compensation discrimination, including statistics, explanations of employee rights, historical analyses of such discrimination, instructions for employers on compliance, and any other information that will assist the public in understanding and addressing such discrimination. 9. Prohibitions relating to prospective employees’ salary and benefit history (a) In general The Fair Labor Standards Act of 1938 ( 29 U.S.C. 201 et seq.) is amended by inserting after section 7 the following new section: 8. Requirements and prohibitions relating to wage, salary, and benefit history (a) In general It shall be an unlawful practice for an employer to— (1) rely on the wage history of a prospective employee in considering the prospective employee for employment, including requiring that a prospective employee’s prior wages satisfy minimum or maximum criteria as a condition of being considered for employment; (2) rely on the wage history of a prospective employee in determining the wages for such prospective employee, except that an employer may rely on wage history if it is voluntarily provided by a prospective employee, after the employer makes an offer of employment with an offer of compensation to the prospective employee, to support a wage higher than the wage offered by the employer; (3) seek from a prospective employee or any current or former employer the wage history of the prospective employee, except that an employer may seek to confirm prior wage information only after an offer of employment with compensation has been made to the prospective employee and the prospective employee responds to the offer by providing prior wage information to support a wage higher than that offered by the employer; or (4) discharge or in any other manner retaliate against any employee or prospective employee because the employee or prospective employee— (A) opposed any act or practice made unlawful by this section; or (B) took an action for which discrimination is forbidden under section 15(a)(3). (b) Definition In this section, the term wage history means the wages paid to the prospective employee by the prospective employee’s current employer or previous employer. . (b) Penalties Section 16 of such Act ( 29 U.S.C. 216 ) is amended by adding at the end the following new subsection: (f) (1) Any person who violates the provisions of section 8 shall— (A) be subject to a civil penalty of $5,000 for a first offense, increased by an additional $1,000 for each subsequent offense, not to exceed $10,000; and (B) be liable to each employee or prospective employee who was the subject of the violation for special damages not to exceed $10,000 plus attorneys’ fees, and shall be subject to such injunctive relief as may be appropriate. (2) An action to recover the liability described in paragraph (1)(B) may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees or prospective employees for and on behalf of— (A) the employees or prospective employees; and (B) other employees or prospective employees similarly situated. . 10. National Equal Pay Enforcement Task Force (a) In general There is established the National Equal Pay Enforcement Task Force, consisting of representatives from the Equal Employment Opportunity Commission, the Department of Justice, the Department of Labor, and the Office of Personnel Management. (b) Mission In order to improve compliance, public education, and enforcement of equal pay laws, the National Equal Pay Enforcement Task Force will ensure that the agencies in subsection (a) are coordinating efforts and limiting potential gaps in enforcement. (c) Duties The National Equal Pay Enforcement Task Force shall investigate challenges related to pay inequity pursuant to its mission in subsection (b), advance recommendations to address those challenges, and create action plans to implement the recommendations. 11. Authorization of appropriations (a) Authorization of appropriations There are authorized to be appropriated such sums as may be necessary to carry out this Act. (b) Prohibition on earmarks None of the funds appropriated pursuant to subsection (a) for purposes of the grant program in section 5 of this Act may be used for a congressional earmark as defined in clause 9(e) of rule XXI of the Rules of the House of Representatives. 12. Small business assistance (a) Effective date This Act and the amendments made by this Act shall take effect on the date that is 6 months after the date of enactment of this Act. (b) Technical assistance materials The Secretary of Labor and the Commissioner of the Equal Employment Opportunity Commission shall jointly develop technical assistance material to assist small enterprises in complying with the requirements of this Act and the amendments made by this Act. (c) Small businesses A small enterprise shall be exempt from the provisions of this Act, and the amendments made by this Act, to the same extent that such enterprise is exempt from the requirements of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 201 et seq.) pursuant to clauses (i) and (ii) of section 3(s)(1)(A) of such Act ( 29 U.S.C. 203(s)(1)(A) ). 13. Notice requirements (a) In general Each employer shall post and keep posted, in conspicuous places on the premises of the employer where notices to employees are customarily posted, a notice, to be prepared or approved by the Equal Employment Opportunity Commission and the Secretary of Labor, of the requirements described in this Act (or the amendments made by such Act). (b) Relation to existing notices The notice under subsection (a) may be incorporated into notices required of the employer as of the date of enactment of this Act. (c) Digital notice With respect to the notice under subsection (a), each employer shall— (1) post electronic copies of the notice on an internal website to which employees have access; and (2) notify employees on such internal website of the location of the place on the premises where the notice is posted. 14. Rule of construction Nothing in this Act, or in any amendments made by this Act, shall affect the obligation of employers and employees to fully comply with all applicable immigration laws, including being subject to any penalties, fines, or other sanctions. 15. Severability If any provision of this Act, an amendment made by this Act, or the application of that provision or amendment to particular persons or circumstances is held invalid or found to be unconstitutional, the remainder of this Act, the amendments made by this Act, or the application of that provision to other persons or circumstances shall not be affected.

Passed the House of Representatives April 15, 2021. Cheryl L. Johnson, Clerk

April 20, 2021 Read the second time and placed on the calendar