While it has been illegal on the federal level to discriminate against women in the workplace for decades, there remain questions and concerns about gender equity pay gaps.  In order to address that concern, the Nevada Legislature introduced and passed a law to impose severe and substantial sanctions against businesses who do not pay women on an equal basis as their male counterparts.

SB 166, which becomes effective on January 1, 2020, empowers the Nevada Equal Rights Commission to enter an order against a business accused of unlawful employment practices based on sex to pay the accuser lost wages and other economic damages.  Furthermore, if that business employs 50 or more employees, the Nevada Equal Rights Commission may impose a civil penalty of up to $15,000.

There are several things that make SB 166 unique and damaging to businesses.  The first is that the determination of the damages due to the employee is made by the Nevada Equal Rights Commission, not a judge or jury.  Thus, the burden of proof requirements to support the claim are not as stringent. As such, this law effectively can deprive a business of due process and the right to have a judicial determination of the merit of the allegations as well as the measure of damages.  This deprivation of due process to businesses is particularly troubling since there is no meaningful check on the Nevada Equal Rights Commission (who is not unbiased in this arena).

Beyond the deprivation of due process, the fact that SB 166 singles out discrimination based upon sex (as opposed to other protected classes such as race, age, disability, etc.) creates additional concerns as to how this law is going to be applied.  Ultimately, businesses can expect this law to be extended to claims of other types of discrimination.

While no business should engage in discrimination, this law is dangerous in that a business will have limited abilities to defend itself against what could be meritless allegations.  As such, businesses should be proactive in trying to mitigate the likelihood of such claims. A review of your compensation structure as well as hiring metrics may assist in such mitigation.  Maintaining records concerning hiring and compensation decisions may be helpful for such businesses as well. However, if such records do show a bias based upon sex, you should immediately institute measures to remediate the bias.gender equity pay gaps