Kamala Harris outlines plan to penalize companies that fail to close gender ‘pay gaps’

May 20, 2019

Sen. Kamala D. Harris on Monday rolled out a plan that would penalize private sector companies if they don’t sufficiently prove they are closing pay gaps between male and female employees.

Ms. Harris said the plan will put the burden of “ensuring equal pay” on corporations, and not individuals.

“We can finally ensure women earn the wages they deserve by forcing companies to step up, holding them accountable when they don’t, and committing as a nation to ending pay inequity once and for all,” said Ms. Harris, a 2020 Democratic presidential candidate.

Her campaign said that on average, women are paid 80 cents for every dollar paid to men, with the ratio lower for Hispanic, Native American, and black women.

Ms. Harris’ plan would fine large corporations that fail to receive an “equal pay certification” from the Equal Employment Opportunity Commission to prove they’re not paying women less than men “for work of equal value.”

Companies with 100 or more employees would have to get certified within three years of enactment, and companies with 500 or more employees would have two years to comply.

Companies would also have to show pay gaps that do exist are based on merit, performance, or seniority, and not gender.

For every 1 percent “wage gap” the companies allow after accounting for differences in job titles, experience, and performance they would be fined 1 percent of their average daily profits from the last fiscal year.

Ms. Harris’ campaign estimated that the plan would generate $180 billion over 10 years, with revenue decreasing over time. Fines would go toward funding paid family and medical leave benefits, as well as funding federal enforcement of pay discrimination laws.

If Congress doesn’t act, Ms. Harris would also take executive action to apply the standards to federal contractors and bar companies from competing for federal contracts valued at more than $500,000 if they don’t meet the standards.

Companies would also be required to report statistics on the overall pay gap between men and women, broken down by employees’ race and ethnicity. Corporations would also have to report the percentage of women who are in leadership positions and who are among the company’s top earners.

Companies would be required to disclose whether they are “equal pay certified” on the homepage of their websites and to potential employees under Ms. Harris’ plan.

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