Working Families Flexibility Act

June 10, 2021

Mr./Madam President,

Women make invaluable contributions to our families, communities, and workplaces. Thankfully, the opportunities for women in the workplace have grown tremendously over time.

And there is no doubt that they should be treated equally and receive equal pay for the same work as their male counterparts.

This week, the Senate considered proceeding to a bill called the Paycheck Fairness Act that aimed to achieve this goal by addressing the “gender pay gap.”

But if we truly care about supporting and empowering women in the workplace, it’s important that we understand just what the pay gap is, and what it can tell us about women’s experiences.

So what is the pay gap? First, there is a crucial distinction we have to make between the unadjusted pay gap, and the adjusted pay gap.

When most people refer to the gender pay gap, they mean the unadjusted pay gap – or the comparison between the median man’s pay and the median woman’s pay, based only sex.

According to this measure, the median earnings of women are 18% lower than those of men.

But the unadjusted pay gap leaves out key pieces of the puzzle. In reality, there are many other factors that influence pay for individual men and women – such as industry, occupation, experience, education, performance, and in particular, family decisions.

The adjusted pay gap does take these factors into account, and turns out to be much smaller than the unadjusted pay gap.

When controlling for these factors – and thus comparing men and women with the same jobs and qualifications – the pay gap falls to just 2%, which can be explained by non-discriminatory factors like performance that other studies have not yet addressed.

The pay gap before and after parenthood tells us something else that is key, too. This measure suggests women are paid less not simply because they are women, but because of the family decisions they make after having children.

Women are far more likely to take on more of the caretaker responsibilities within their families, and thus make work-related tradeoffs that allow them to do so.

A study in Denmark found that average women’s earnings are comparable to men’s earnings before parenthood, but drop after the birth of their first child, when hours worked and participation rates tend to fall for women.

Another study by the Harvard Business Review found that women are more likely to make decisions to limit work-related travel, choose a more flexible job, slow down career pace, make a lateral move, or leave a job in order to accommodate family responsibilities.

Ultimately, the pay gap seems to show in large part the particular choices and preferences of women in their career and family paths.

So in light of this information, what would the Paycheck Fairness Act do?

This bill would allow employees to sue businesses that pay workers different wages, even if the differences have nothing to do with the employee’s sex. As a result, businesses would be forced to ignore the rest of the factors that influence pay – including merit, which is, and should be, the main determinant of earnings.

It would instead enforce rigid, collective pay scales that would reduce flexibility in benefits or hours – the very thing employees want in the workplace.

If this legislation were to become law, instead of receiving higher pay, women would likely find it harder to get their foot in the door. Employers could be more reticent to hire women – especially those just re-entering the workforce – since they automatically would be included in future gender- or race-based class-action lawsuits.

And it would raise costs for businesses and hurt wages across the board.

In short, it is a federally-mandated, one-size-fits-all approach to pay that would only take away choice, opportunity, and flexibility for women – the very things that Congress ought to ensure are allowed.

Indeed, surveys show that workplace flexibility is incredibly valuable to women. One survey estimates that 60% of female job seekers say greater work-life balance and personal well-being are “very important” to them when considering a job, and 46% of female employees say flextime is the most important benefit a company can offer employees.

And further research shows that productivity can be improved by as much as 50% when flexible options are available to workers. If we are to empower women to increase their earnings, we should not be getting in the way of the flexible options that can help.

Thankfully, the rejection of the Paycheck Fairness Act this week proved that this is not the right approach.

There is indeed a better path forward, Mr./Madam President. The bill I am proposing, the Working Families Flexibility Act, would help provide it.

For decades, federal labor laws have unfairly restricted private sector employees from choosing either traditional overtime pay or paid time off as compensation for overtime hours worked, while granting a special exemption for government employees.

This legal disparity unfairly discriminates against working men and women in the private sector, and it’s long overdue that it be addressed. There is no reason that these working moms and dads in the private sector should be prevented from receiving the flexibility that employees in the government receive.

My bill would simply amend the Fair Labor Standards Act to allow private-sector employers to give their employees the option to choose either traditional overtime pay or paid time off – both accrued at 1.5 times the overtime hours worked.

It's a totally voluntary proposal for both employers and employees: employers are not forced to offer it, and employees are not forced to take it.

In addition to offering safeguards to ensure that the choice to use comp time is voluntary, it retains all existing labor protections for employees, including the 40-hour workweek and overtime accrual protections.

If we truly seek to empower women in the workplace, we ought to help give them the freedom and flexibility to pursue the careers and the families they desire.