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4 February 2013 By Daniel Indiviglio

A new proposal in the U.S. Congress would allow employees to reveal their compensation freely. Though the aim is to curb gender discrimination, the effects are likely to be much more far-reaching. Such information should improve labor market efficiency and reduce inequality.

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U.S. Senator Barbara Mikulski and Representative Rosa DeLauro, both Democrats, introduced the Paycheck Fairness Act on Jan. 23. The proposal intends to reduce gender wage discrimination by prohibiting employer retaliation when employees share salary information. The measure also enhances remedies for such discrimination, including both back pay and punitive damages. The legislation would create a program to help empower women by strengthening their compensation negotiations and workplace skills.

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