Overview of The Lilly Ledbetter Fair Pay Act of 2009 and Pay Discrimination
Victims of discriminatory unequal pay can who were previously unable to sue due to the expiration of time can now sue under the newly enacted Ledbetter Fair Pay Act. The new law allows victims of unequal pay 180 days from the date of receiving the last unequal paycheck to bring a complaint. In some instances, victims may have up to 300 days to bring the complaint.
The Ledbetter Act is significant because it reverses a 2007 U.S. Supreme Court ruling that victims of unequal pay must commence their complaint within 180 days of the employer’s discriminatory decision that resulted in the unequal pay. That Supreme Court ruling was harshly criticized because employees rarely know the date that employers make a pay decision. Furthermore, victims of pay discrimination may not realize that their counterparts are paid more until after discovering it through their employer’s records or other employees receiving higher pay. Since pay and salary information are typically confidential, most employees do not discover the wage disparity until well after the 180 day period had already expired. Once that period expired, victims were left without remedy even if the discriminatory pay continued to the present and into the future.
Under the new Ledbetter Act, each unequal paycheck restarts the 180-day complaint filing deadline. As such, victims of pay discrimination now have 180 days from the date of the most recent discriminatory paycheck to sue regardless of when the discriminatory pay decision was made.
Ledbetter Fair Pay Act - Information For Employees
Those employees that previously could not sue because they did not learn of the discriminatory pay until after 180 days of the decision can sue now within 180 days of getting a paycheck reflecting the unequal pay. It no longer matters when the employer made the actual discriminatory pay decision which had been the focus of prior law. This assures employees that they may recover backpay for underpaid wages once they learn of the discriminatory pay and receive a paycheck that reflects such. However, employees who are no longer employed by the discriminating employer for more than 180 days may not benefit from the law because they would likely not have a last discriminatory paycheck issued within 180 days. Such employees should consult an attorney to determine whether the 300-day deadline applies to them.
Ledbetter Fair Pay Act - Information For Employers
Employers should thoroughly review their compensation policies and adjust them as appropriate. Since the Ledbetter Act permits employees to sue even where the pay decision was made several years ago possibly by different management, employers should conduct a careful review of the present compensation paid to employees in the same position to accurately account for any disparities and ensure that such is justified by objective factors as well as employee experience and performance data. Furthermore, a statistical analysis would assist in determining that no class of employees tend to receive lower wages than others in the same position. An employee may need to adjust the compensation of employees in certain classes who tend to be paid less than others in the same positions. While these steps may not prevent discrimination charges from past pay decisions, an immediate adjustment in pay will prevent possible future complaints or charges given that employees have to complain within 180 or 300 days.