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Holzschu, Jordan, Schiff & Associates

 Lilly Ledbetter Fair Pay Act

By: Michael Holzschu

Hailing a victory for working women and all victims of pay discrimination, Stuart J. Ishimaru, the newly designated Acting Chairman of the U.S. Equal Employment Opportunity Commission (EEOC), today congratulates Congress and President Obama on the final passage and enactment of the Lilly Ledbetter Fair Pay Act of 2009. The Act reinstates the EEOC’s longstanding position on the timeliness of filing pay discrimination charges, a position that had been overturned by the Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc. President Barack Obama signed the Lilly Ledbetter Fair Pay Act into law on Thursday, Jan. 29, 2009. . Ishimaru stated, "The EEOC intends to enhance enforcement in this area, in addition to increasing public outreach and education. " The Fair Pay Act changes when the statute of limitations begins for workers’ claims of pay discrimination under Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967 (ADEA) to declare that an unlawful employment practice occurs not only when a discriminatory pay decision or practice is adopted but also when the employee becomes subject to the decision or practice.

Under the Lilly Ledbetter Fair Pay Act, the statute of limitations would run 180 days from each paycheck that is diminished by discrimination. Two years ago, in a case involving Ledbetter, the Supreme Court ruled that a plaintiff must file a suit within 180 days of the original discriminatory act.

Now each pay stub will be considered a separate violation. Workers could collect two years of back pay from the time a suit was filed.

Stuart Ishimaru, the chairman of the Equal Employment Opportunity Commission, said the Ledbetter bill simply reinstates the statute of limitations in pay disputes that had been in place before the Supreme Court ruling. The agency receives 5,000 wage dispute filings annually.

"The [Ledbetter law] is a victory for working women and all workers across the country who are shortchanged by receiving unequal pay for performing equal work," Ishimaru said in a statement

Opponents say the new law eviscerates the statute of limitations, potentially subjecting businesses to costly lawsuits over decades-old compensation decisions involving people who may no longer work at the company. In addition, pensions based on unfair pay may come into question.

The Lilly Ledbetter Fair Pay Act amends Title VII of the 1964 Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Rehabilitation Act so that the time limits for filing a charge run from the last, not the first, alleged discriminatory decision. The Lilly Ledbetter Fair Pay Act allows an employee to recover back pay for up to two years preceding the filing of a discrimination claim. The Fair Pay Act significantly extends the window of time during which an employee may file a wage discrimination claim. The changes of the Fair Pay Act also apply to claims filed under the Americans with Disabilities Act of 1990 (ADA) and the Rehabilitation Act of 1973.

The Fair Pay Act does retain some limits on employer liability by restricting back-pay awards to two years, but employer questions and concerns will still arise, particularly regarding record retention requirements.

Under the Fair Pay Act, claims such as Ledbetter’s will be permitted because a new unlawful employment practice would occur with each paycheck that comes after the initial discriminatory wage decision. Thus, the 180-day statute of limitations would reset with each paycheck or other application of the discriminatory decision or practice.

The new law overturns the Supreme Court’s May 2007 decision in Ledbetter, in which the Court held that the period for filing an EEOC charge of pay discrimination begins when the pay-setting decision is made and that charges under Title VII of the Civil Rights Act challenging discriminatory pay, therefore, ordinarily must be filed within 180 days of the allegedly discriminatory pay decision.

The Act states that with respect to pay discrimination, an unlawful employment practice occurs "each time wages, benefits, or other compensation is paid, resulting in whole or in part from [a pay] decision or other practice."

One important note is that the language of law may end up changing the issues of discrimination in other areas. This could open a major Pandora’s Box for many employers.

Review your practices at once and make the changes that you need to make while getting the professional advice from your attorney or HR professional.

1. Employment Non-Discrimination Act (ENDA): Would eliminate employment decisions based on sexual orientation.

2. Healthy Families Act: Healthy Families Act could dramatically change your company’s paid sick leave policies in 2009

3. Employee Free Choice Act (EFCA): In its current form, the Act eliminates secret- ballot elections and allows union representation based on signed cards. When an employer and a newly elected union are unable to reach an agreement on the terms of a first contract, the Act provides that the terms will be set by federal arbitrators.

4. Civil Rights Act of 2008: The Civil Rights Act of 2008: Why passage of this bill could leave employers exposed to unlimited damages in Title VII or ADA cases

5. FOREWARN Act: Major changes to the existing WARN act.

 

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