The First Bill Obama Signs into Law Affects the Work Place: The Lilly Ledbetter Act
By Ryan T. Neumeyer The Lilly Ledbetter Fair Pay Act, which states that the 180-day statute of limitations for pay discrimination resets with each new discriminatory paycheck, was signed into law on January 29, 2009, by President Barack Obama.
The law was enacted in response to Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), a U.S. Supreme Court decision holding that the statute of limitations for filing an equal-pay lawsuit begins at the date the pay was agreed upon, not at the date of the most recent paycheck, as a lower court had ruled. This protected employers from stale and possibly frivolous claims from employees. The logic behind the Supreme Court’s decision was that issuing paychecks without any discriminatory intent may form the basis of a timely charge even though it perpetuates the effects of a discriminatory decision to initially set a woman’s pay rate lower because of her gender.
The Lilly Ledbetter Fair Pay Act provides that an employee may recover back-pay for up to two years preceding the filing of the charge. The law applies not only sex, but to all protected classes under Title VII and the ADA, including gender, age, race, ethnicity, religion or disability.
Time will tell what impact this law will have on workplace litigation. However, given the fanfare in which it was signed into law, it would not be unwarranted to assume that we may see more equal pay discrimination claims. With that said, the law does not require changing any human resources practices by employers. The law simply alters procedural defenses to employers in such cases and the procedures plaintiffs must follow.
However, the law does reinforce the need to review employee compensation regularly to identify and correct any significant disparities between protected classes and non-protected classes. Employers must take all the necessary steps to ensure that compensation differences are supported by sound and objective business reasons.
If you have any questions regarding the Lilly Ledbetter Act, or any other matter please contact myself or Evelyn Schonberg at 216-447-1551.
|
