Lilly Ledbetter Fair Pay Act
The Lilly Ledbetter Fair Pay Act was signed into law by President Barack Obama on Thursday, Jan. 29, 2009. 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, as well as each additional application of that decision or practice. In other words, each time compensation is paid.
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 pay 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.
The Fair Pay Act is in response to a 2007 U.S. Supreme Court ruling in the case of Lilly Ledbetter v. Goodyear Tire and Rubber Company. In that decision, Ledbetter, a longtime employee of Goodyear, charged her employer with wage discrimination when she discovered that she had been paid less than a male supervisor at another plant. By the time she learned of the practice, several years had passed, and she had since retired. In a 5-4 decision, the Supreme Court ruled that Ledebetter was no longer entitled to file a claim because she had failed to do so within 180 days of the initial discriminatory wage decision.
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.
HR Guide to Employment Law: A practical compliance reference manual covering 14 topics, including discrimination