NFIB: Paycheck Fairness Act Invites Frivolous Lawsuits, Paperwork Burdens to Small Businesses

Date: March 24, 2021

NFIB sent Congress a letter opposing the legislation

WASHINGTON, D.C. (March 24, 2021) – The National Federation of Independent Business (NFIB) sent a letter of opposition to the U.S House Committee on Education and Labor opposing H.R. 7, the Paycheck Fairness Act. The legislation would add significant burdens to small businesses and potentially expose them to frivolous lawsuits.

“Small business owners believe in equal pay for equal work, but this legislation is not the solution,” said Jeff Brabant, NFIB Manager of Federal Government Relations. “Instead, the Paycheck Fairness Act creates opportunities for unnecessary lawsuits, makes it nearly impossible for a small business employer to defend against certain claims, and would require small businesses to adopt the employment practices of multi-national corporations or risk costly litigation. In addition, it would also add significant paperwork burdens on owners at a time when they are working on recovering from the pandemic. The Paycheck Fairness Act would be harmful to that recovery and NFIB strongly opposes the legislation in its current form.”

The legislation would be damaging to small businesses as it will make legitimate business-related pay differences difficult to defend in court, invite frivolous lawsuits against small business owners by allowing unlimited compensatory and punitive damages in equal pay lawsuits, and significantly increase small business paperwork.

Specifically, the legislation would make it difficult for a small employer to defend against claims where an “alternative employment practice” exists in situations where a small business may not adopt the same employment practices of a larger business. One-size-fits-all legislation like the Paycheck Fairness Act puts small businesses at a significant disadvantage of their larger competitors.

NFIB recently issued a Small Business Growth Agenda for the 117th Congress. The agenda includes five priority issues including focusing on the small business economic recovery. NFIB opposes unrelated small business mandates that threaten the small business recovery.

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