Business groups oppose Paycheck Fairness Act, citing concerns it could threaten bonuses and negotiating

The U.S. Chamber of Commerce and major industry groups this week came out in opposition to the Paycheck Fairness Act, legislation aimed at addressing the gender pay gap.

The Chamber, the National Restaurant Association and the National Retail Federation, among others, said that they believe employees should be compensated equitably and without discrimination, but that the bill would prohibit many legitimate, nondiscriminatory practices that employers use to attract and retain employees.

The groups on Tuesday wrote a letter to Speaker Nancy Pelosi (D-Calif.) and House Minority Leader Kevin McCarthy (R-Calif.) noting their opposition to the Paycheck Fairness Act, also known as H.R. 7. The bill would add procedural protections to two landmark labor laws, the Equal Pay Act of 1963 and the Fair Labor Standards Act.

Rep. Rosa DeLauro (D-Conn.) introduced the bill, and it has 222 Democratic co-sponsors and three Republican co-sponsors. It works to limits an employer’s defense that a difference in wages is based on a factor other than gender.

The business groups argued that H.R. 7 could threaten bonuses, prohibit employees from negotiating higher pay and require employers to submit expansive new pay data on their employees to the Equal Employment Opportunity Commission. They also argue the bill would make it easier for trial lawyers to file large class action suits against employers.

The Retail Industry Leaders Association (RILA), which represents major retailers like Target, Walgreens and Home Depot, on Wednesday wrote a letter to Pelosi and McCarthy with their opposition to H.R. 7, citing the same concerns.

“The Paycheck Fairness Act is unequivocally the wrong approach to address the gender wage gap,” wrote Evan Armstrong, RILA vice president of workforce policy.

RILA added that it strongly supports the WAGE Equity Act, which Rep. Elise Stefanik (R-N.Y.) introduced. The bill would prohibit employers from asking a candidate about their pay history, make it unlawful for employers to prohibit employees from discussing their wages and provide businesses that undergo pay audits to identify gender pay disparities.

The other letter was also signed by the International Franchise Association, Associated Builders and Contractors, National Association of Wholesaler-Distributors, National Federation of Independent Business and the National Roofing Contractors Association.