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MANAGEMENT
MOXIE Nimble News
The Ledbetter Fair Pay Act Changes the Clock for Equal Pay Claims
WHAT HAPPENED?
Last week, President Obama extended the statute of limitations for compensation discrimination claims by signing the Lilly Ledbetter Fair Pay Act of 2009 and the Paycheck Fairness Act. As we know, it is unlawful for employers to discriminate against an employee because of that employee's gender with respect to hiring, firing, promotion, job training, compensation, or any other term, condition or privilege of employment. The right of employees to be free from discrimination in their compensation is protected under several federal laws, including the following enforced by the U.S. Equal Employment Opportunity Commission (EEOC): the Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, and Title I of the Americans with Disabilities Act of 1990.
The Lilly Ledbetter Fair Pay Act is named for an Alabama woman who, after nineteen years of working as a supervisor at a Goodyear tire plant, discovered that she had been paid significantly less than her male counterparts for the same work. In 2007 the U.S. Supreme Court ruled that discrimination claims must be filed within 180 days of the initial offense and that Ledbetter's claims were outside the statute of limitations.
WHAT DOES IT MEAN FOR EMPLOYERS?
The Lilly Ledbetter Fair Paid Act of 2009 took effect as if enacted on May 28, 2007, and applies to all claims of discrimination in compensation that are pending on or after that date. Under the new rule, the initial offense is no longer relevant if there is a continuing violation. In fact, the continuing violation keeps the discriminatory claim alive indefinitely.
The second part of this new legislation is referred to as the Paycheck Fairness Act. And establishes enhanced enforcement of equal pay requirements. Here are some examples:
- Increases available remedies in equal pay access cases by adding compensatory damages and punitive damages;
- Allows class action lawsuits;
- Requires the EEOC and the Office of Federal Contract Compliance programs to provide training;
- Requires collection of pay information by the Equal Employment Opportunity Commission;
- Initiates the reinstatement of pay equity programs and pay equity data collection.
FINAL THOUGHT
The Equal Pay Act provides that employers may not pay unequal wages to men and women who perform jobs that require substantially equal skill, effort and responsibility, and that are performed under similar working conditions within the same establishment.
Pay differentials are permitted when they are based on seniority, merit, quantity or quality of production, or a factor other than sex. These are known as "affirmative defenses" and it is the employer's burden to prove that they apply. In correcting a pay differential, no employees pay may be reduced. Instead, the pay of the lower paid employee must be increased. As we know, it is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on compensation or for filing a discrimination charge, testifying, or participating in any way in an investigation, proceeding or litigation under Title VII, ADEA, ADA or the Equal Pay Act.
This is a good time to conduct an employment practices audit to ensure existing pay practices are gender neutral.
Questions?
Contact info@foleylawpractice.com or call 508-548-4888
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