Lilly Ledbetter Fair Pay Act of 2009
By Barbara Morrow, MBA, CCP
President Obama signed the Lilly Ledbetter Fair Pay Act into law on January 29, 2009, making it the first piece of legislation he signed into law. President Obama said at the signing: “Equal pay is by no means just a women's issue — it's a family issue. It's about parents who find themselves with less money for tuition or child care; couples who wind up with less to retire on; households where, when one breadwinner is paid less than she deserves, that's the difference between affording the mortgage — or not; between keeping the heat on, or paying the doctor's bills — or not. And in this economy, when so many folks are already working harder for less and struggling to get by, the last thing they can afford is losing part of each month's paycheck to simple discrimination.”
The Lilly Ledbetter Fair Pay Act of 2009 reverses the impact of the Supreme Court’s 2007 decision in Ledbetter vs. Goodyear Tire and Rubber Company. In Ledbetter, the Supreme Court held that the charge-filing period for pay discrimination claims under Title VII begins to run when the challenged pay decision is made and communicated to the affected employee. Ledbetter was based on the principle that discrimination claims are most likely to be resolved through the Title VII's statutory processes if they are confronted promptly and forthrightly. The Supreme Court rejected the “paycheck rule,” urged by the plaintiff, which would have “reset” the filing period every time the aggrieved individual received a paycheck based in part on the allegedly discriminatory decision.
Key provisions of the Lilly Ledbetter Fair Pay Act include:
Changes application of statute of limitations. The Ledbetter Act will make the issuance of a paycheck a discriminatory action. By making the time clock re-start each time an employee receives a paycheck, and potentially even when a retiree receives an annuity check, the Ledbetter Act will allow individuals to bring discrimination claims potentially many years after an alleged act of discrimination occurred. Employers will be liable for earlier management decisions for which there may be no records.
Expands plaintiff field. The Ledbetter Act will allow, not just an employee who was discriminated against but other individuals who were “affected” by an act of pay discrimination to file claims. This, the new law may allow family members, including spouses and children, and potentially others to become plaintiffs in discrimination suits over an employee’s pay.
Amends other civil rights statutes. The Ledbetter Act will extend the statute of limitation for filing claims for all protected classes of employment law, including gender, age, color, disability, race, religion, and national origin. The act applies to Title VII of the Civil Rights Act of 1964, the Equal Pay Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act and the Rehabilitation Act.
“This Act, and the amendments made by this Act, take effect as if enacted on May 28, 2007 and apply to all claims of discrimination in compensation under title VII of the civil Rights Act of 1964, and Age Discrimination in employment Act of 1967, tile I and section 503 of the Americans with Disabilities Act of 1990, and sections 501 and 504 of the Rehabilitation act of 1973, that are pending on or after that date.” 1
1 - Lily Ledbetter Fair Pay Act of 2009
Sources: SHRM, World At Work, Lilly Ledbetter Fair Pay Act of 2009 HR2831
Barbara Morrow is a Compensation Consultant with Strategic Workplace Solutions, Inc. She helps organizations understand total reward strategies and develop base and incentive compensation programs.