What is the Lilly Ledbetter Fair Pay Act?

The Lilly Ledbetter Fair Pay Act of 2009 was signed into law by President Barack Obama in January, 2009. The Act of Congress amends the Civil Rights Act of 1964 that stated a statute of limitations for the filing of equal pay lawsuits that involve pay discrimination

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Lilly Ledbetter worked as a supervisor at a Goodyear store in Alabama and filed an initial wage discrimination complaint in 1998. The court found that the statute of limitations invalidated the claim because Ledbetter had been working for Goodyear for 20 years before she filed her complaint.

At the bill signing, President Obama stated “Lilly Ledbetter was a hard worker who did her job and did it well for nearly two decades before discovering that she was paid less than her male colleagues for doing the very same work. Over the course of her career, she lost more than $200,000 in salary, and even more in pension and Social Security benefits. Losses she still feels today.”

The new law will allow employees to file charges of pay discrimination without the 180/300 day time limit. The new law will require employers to ensure that their pay practices do not discriminate. Keeping accurate records of pay and pay increases is a critical component of the Act.

The law declares that an unlawful employment practice occurs when:

1. A discriminatory compensation decision or other practice is adopted;
2. An individual becomes subject to the decision or practice;
3. An individual is affected by application of the decision or practice, including each time there is a payment of compensation.

What the law means to employers:

• Employers need to modify their record retention policies and begin retaining records that involve pay decisions indefinitely.
• An employee can come back even after they are retired if they receive retirement payments.
• Employers are encouraged to audit current policies to ensure pay decisions are made in a non-discriminatory manner.
• The law creates a rolling time-frame for filing wage discrimination. This means that the clock renews each time the employee receives a paycheck with compensation that is based on a discriminatory decision by their employer.

This is obviously a big deal to employers and interpretation of the law and what it means to each organization individually needs to be considered. Please consult your HR professional or legal counsel for specific steps your organization needs to take.

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