On July 31, 2008, by a margin of 247-178, House Democrats passed the Paycheck Fairness Act (H.R. 1338), with the support of 14 Republicans. The bill amends the Equal Pay Act, which prohibits sex-based wage discrimination. If signed into law, the Paycheck Fairness Act would eliminate the caps on punitive and compensatory damages in Equal Pay Act actions, make it more difficult for employers to establish the affirmative defense that a pay disparity is due to a factor other than sex, and eliminate such a defense where the employee could demonstrate an alternative employment practice that served the same business purpose without producing wage differences.Speaking in support of the bill, Rep. Slaughter (D-NY) described how the gender wage gap hurts not only women, but also families that depend on women’s earnings, especially single-mother households. Other Democrats who spoke in favor of the bill emphasized that it would also amend the Fair Labor Standards Act (FLSA) to prohibit employers from retaliating against employees who share their wage information with other employees.

Several Republicans, including Rep. Diaz-Balart (R-FL) and Rep. McKeon (R-CA), asserted that the issue having the biggest economic impact on all Americans is rising energy costs, and protested the majority’s blocking of Republican attempts to bring energy reform bills to the floor before the House breaks for a recess. Republican lawmakers also stated that wage discrimination on the basis of gender is already unlawful, and that by removing current damage caps this bill would benefit trial attorneys and encourage unsubstantiated claims. Rep. McKeon said, “we’re about to pass a bill that will bring a major payday to trial lawyers but will do nothing to ease the pocketbook concerns of hardworking American families.”

In a statement released July 30, 2008, the White House threatened to veto the bill because it would allow unlimited damages, “require the Department of Labor (DOL) to replace its successful approach to detecting pay discrimination with a failed methodology,” and would significantly change the “factor other than sex” affirmative defense, thereby imposing a “tremendous burden on employers.” During debate, Rep. Castor (D-FL) noted, “we are not going to give up just because the President has threatened a veto of this measure.”

Several important amendments to the legislation were passed on the House floor. The House passed an amendment which clarified that a plaintiff must show intent to discriminate by proving malice or reckless indifference in order to recover punitive damages.  Another amendment  removed the legislation’s expansion of protection for job applicants, who remain protected from sex discrimination under Title VII. The House also passed an amendment delaying the effective date of the bill by six months from the time of enactment and requiring the DOL to educate small businesses about what is required under law and assist them with compliance. Other amendments clarified that immigration laws would still be applicable regardless of the worker protections in the bill prohibited the grant program created by the Paycheck Fairness Act from being used for Congressional earmarks.