President Obama signed the Lilly Ledbetter Fair Pay Act on January 29, 2009. This Act restores the law to where it was before the Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Co. In that case, a female worker’s pay had become lower than her male counterparts over her twenty years of service, even though her original salary was in line with the salaries of men performing substantially similar work. Despite this discrepancy, the Supreme Court ruled that employees must file a claim for pay discrimination within 180 days of the employer’s original decision to pay them less - - even if the employee did not discover the discriminatory reduction in pay until much later.
This new Act Amends Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967, and modifies the operation of the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973. The Ledbetter Act is intended to clarify that a discriminatory compensation decision or other practice that is unlawful under any of these Acts occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice.
Basically, an employer that engages in discriminatory pay commits an illegal act during each paycheck. As a result, each discriminatory paycheck resets the 180-day limit to file a claim. Under applicable laws, plaintiffs still can recover back pay for a period of no more than two years before they challenge the discrimination.
What does this mean for employers? This Act restores the ability of victims of wage discrimination to hold their employers accountable for each discriminatorily reduced paycheck, because every time pay is unfairly lowered, it’s a violation of the law. Therefore, this Act creates a new class of Plaintiffs that were previously unable to bring a complaint because the time limit had passed.
If you have any questions about the Ledbetter Act, you are urged to consult an employment attorney