05/20/2019 06:00 EDT | Updated 14 minutes ago

Kamala Harris Offers Sweeping Plan To Dock Companies That Don't Pay Women Equally

The proposal would levy fines on businesses who don't prove that their pay practices are fair.

Sen. Kamala Harris (D-Calif.) unveiled the second major proposal of her presidential campaign on Monday, a comprehensive plan designed to punish corporations who don’t provide equal pay for women employees.

Women employees usually bear the burden of suing for relief from pay discrimination in the U.S., often risking retaliation from their bosses by coming forward.

Harris’ proposal, which her campaign called “the most aggressive equal pay proposal in history,” seeks to flip that system on its head. Instead of relying on employees to prove they were discriminated against, corporations would be required to prove that their pay practices are fair. The plan is modeled after a similar first-of-its-kind law that went into effect in Iceland last year.

Under Harris’ plan, companies would be required to obtain an “equal pay certification” from the U.S. Equal Employment Opportunity Commission (EEOC) to prove they pay women equally. They would be required to disclose whether they received that certification on their website’s homepage and to prospective employees. 

To meet certification requirements, companies would have to “demonstrate they have eliminated pay disparities between women and men who are doing work of equal value,” per Harris’ campaign. “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.”

The plan does not stipulate exactly how pay disparities at companies would be assessed, but her campaign pointed to a 2016 payroll data analysis done by Glassdoor of its own workforce. The plan also calls for providing technical assistance to support companies so they can assess and address their pay gaps.

Under Harris’ plan, companies with 100 or more employees would be required to obtain certification within three years of law’s enactment and every two years thereafter (smaller businesses get a pass). Companies with 500 or more employees would have two years from the law’s enactment to certify, and then comply with the two-year recertification rule.

If companies fail to gain EEOC certification, they would face fines for every 1% pay gap that exists in their workforce. The fines would vary, for each pay-gap percentage point, a business would have to pay 1% of its average daily profits during the previous fiscal year. 

Harris’ campaign estimated the scheme would, at least initially, generate about $180 billion over 10 years ― funds she supports investing to help finance a national paid family and medical leave program. The U.S. has no such national programs, though many firms have their own.

Harris’ plan also includes provisions seeking to boost transparency about worker pay and the role of women within a company. It would require, for example, that companies report statistics on the percentage of women in leadership positions and the percentage who are among their top earners.

Vicki Shabo, a senior fellow at nonpartisan think tank New America, called Harris’ equal pay plan “exciting” and “long overdue.”

“Closing the wage gap would mean tens of millions for women and their families. It could wipe out student loan debt, give relief to homeowners, and literally put food on the table. It’s something that can help stimulate the economy,” she said.

The standard wage gap measure put out annually by the Census Bureau currently shows that women make 80 cents for every male dollar earned. (Earnings are even lower for women of color.). 

House Democrats easily passed a bill earlier this year to make sure women and men are paid equally. The legislation, known as the Paycheck Fairness Act, aims to eliminate gender-based pay inequality by altering language in the Fair Labor Standards Act.

But the measure has effectively stalled due to GOP opposition in the Senate, where is unlikely to even receive a vote. Republicans have long argued that such bills would heighten the risks of lawsuits for businesses.

Harris’ proposal would likely face similar GOP opposition if she manages to win the White House in 2020, but her campaign said she won’t be waiting on Congress to act to enact pay equity. If elected, she vowed to take executive action to implement her plan for federal contractors ― who would then be required to attain certification within two years of her taking office.

Harris’ first major policy proposal, unveiled in March, focused on drastically increasing teachers’ pay around the country