Wage discrimination against women still unlawful: Dispelling myths about Wisconsin Act 219

Wisconsin is no stranger to the political spotlight. Elections and recall efforts have garnered national attention and given rise to a seemingly endless stream of political advertisements. One of the issues dominating the headlines in recent weeks is the enactment of Wisconsin Act 219, which repeals the Equal Pay Enforcement Act.

As is often the case, however, the political debate surrounding Act 219 has largely overshadowed the substance of the act itself. Putting politics aside, this post summarizes the background of Act 219 and the details of the new law in an effort to dispel some of the myths and misconceptions.

The Wisconsin Fair Employment Act (WFEA) prohibits discrimination in employment on the basis of various protected characteristics, including, without limitation, age, race, creed, color, disability, marital status, sex, national origin, ancestry, and arrest and conviction record. An employee who believes that his or her employer has engaged in unlawful employment discrimination can file a complaint with the Department of Workforce Development (DWD), the administrative agency charged with enforcing the WFEA. If the DWD concludes that the employer has engaged in unlawful employment discrimination, it can award the employee reinstatement, back pay for a period up to but not exceeding two years, as well as costs and attorney fees.

In 2009, Gov. Jim Doyle and a Democratic-controlled Assembly passed the Equal Pay Enforcement Act. While the name suggests that the law was targeted at addressing pay inequalities between men and women, the scope was actually much broader. Under the Equal Pay Enforcement Act, an employee who succeeded in establishing that his or her employer engaged in unlawful discrimination, based on any protected characteristic, could then file a separate lawsuit in circuit court to collect compensatory and punitive damages.

Notably, the law left little room for discretion in awarding damages; it stated that a court finding that the employer has engaged in discrimination must order the employer to pay the plaintiff compensatory and punitive damages. The amount of allowable compensatory and punitive damages varied depending on the size of the employer, but was capped at $300,000. Any compensatory and punitive damages recovered by the employee in the circuit court action were in addition to, and not in lieu of, any amounts recovered in the administrative action.

Proponents of the Equal Pay Enforcement Act argue that the availability of compensatory and punitive damages deters employers from engaging in unlawful employment discrimination. Although punitive and compensatory damages are available under federal anti-discrimination laws, federal litigation is widely regarded as more expensive and time consuming than litigation in state court. Thus, supporters of the law argue that it provides employees with an easier, cheaper forum to pursue such damages.

In contrast, critics of the Equal Pay Enforcement Act, including many in the business community, argued that the law created uncertainty for employers and increased the cost of doing business in Wisconsin. They contend that the law put Wisconsin at a disadvantage in competing for new growth and business opportunities as compared to neighboring states that do not permit the recovery of compensatory and punitive damages. Critics also feared that employment discrimination claims would clog the already overburdened state courts.

Gov. Walker and the now Republican-controlled Senate and Assembly sided with the critics. On April 5, 2012, Walker signed what is now known as Wisconsin Act 219 into law, thereby eliminating an employee’s ability to sue in state court to recover compensatory and punitive damages. The new law applies to all new discrimination complaints, as well as pending complaints for which a final determination was not issued as of the effective date of the act.

Regardless of how you may feel about the politics behind the repeal of the Equal Pay Enforcement Act, there are two key points that businesses need to keep in mind in navigating the current legal landscape. First, the characterization of Act 219 as solely a women’s rights issue is misleading. The act eliminates the availability of compensatory and punitive damages for all victims of unlawful employment discrimination – whether that be on the basis of age, race, color, or any other protected characteristic. Although the sex discrimination aspect has garnered the most publicity, Act 219 is not so narrowly focused.

Second, even after the passage of Act 219, it is still unlawful in Wisconsin to discriminate against women in the payment of wages or benefits. Act 219 does not change the substantive legal protections women and other protected groups enjoy. Instead, it limits the damages an employee can recover under state law due to a violation of such substantive rights. 

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