Kamala Harris released an ambitious proposal Monday to punish companies that don’t pay women equally — taking an aggressive stand on a pay parity issue that has seen some advances in Congress but persists at the highest levels of corporate America.
Harris’ plan, which broadly mandates that companies prove they aren’t discriminating against women, proposes to fine corporations that don’t close their pay gaps between women and men — with the proce going toward building out universal paid family and medical leave.
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Several studies have shown that women earn less than men, with the gap larger for Latinas and black women. Harris previewed the plan at a Sunday rally in Los Angeles, taking aim at the pay gap. “This has got to end!” she said.
Embedded in the white paper is an overhaul of anti-discrimination laws and an expansion of discrimination investigations. The proposal also comes with another stick, of sorts: If Congress doesn’t enact on the sweeping policy, Harris plans to take executive action applying the standards to certain large federal contractors.
Unequal pay has often been cited by a 2020 Democratic field that features a record number of women. Yet, while others have called for increasing transparency among corporations — including required reporting of their wage gap — experts including New America’s Vicki Shabo told POLITICO that Harris’ policy is the most specific.
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Harris wants to require companies with more than 100 employees to obtain “Equal Pay Certification,” according to the outline. Companies would also have to disclose whether they are “Equal Pay Certified” on the homepage of their websites. In the case of pay gaps, it would fall to the corporations to show that the disparities are solely based on merit, performance and seniority.
Companies would also need to report the percentage of women in high-ranking leadership roles, and the percentage who are among their highest paid. “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,” the plan states. “These statistics will be reported by employees’ race and ethnicity.”
“Right now, so much of the onus is on women to figure out if they are being paid unfairly and take action,” said Julie Kashen, a senior fellow at The Century Foundation, who reviewed the plan. She said it would hold employers “directly accountable.”
Companies would be fined 1 percent of their average daily profits for every 1 percent of wage gap during the last fiscal year, after accounting for differences in job titles, experience and performance. It would generate an estimated $180 billion over a decade.
Under Harris’ executive order, federal contractors would need to be equal-pay-certified within two years. If they don’t comply, they’ll be barred from competition for federal contracts of $500,000, or more.
Harris’ plan builds on past legislation, including a 2009 law signed by President Barack Obama, and named for Lilly Ledbetter, that clarifies the statute of limitations on pay discrimination cases. This year, the House passed the latest version of the Paycheck Fairness Act with votes from Republicans, but it has not come up in the Republican-controlled Senate, Kashen said.
“We know that equal pay has support from voters of both parties,” Kashen said.
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