Today is the Seven Year Anniversary of The Lilly Ledbetter Fair Pay Act of 2009 which amends federal employment discrimination laws to make clear that a violation of the anti- discrimination laws occurs each time a paycheck that is the product of illegally discriminatory practices is issued. This is true even if the actual discriminatory decision or program affecting the computation of the paycheck was made or set up in the past. New risks for employers include accusation of unfair practice where a defense would require evidence not available through routine data retention practice, or where a process for fair review and determination of compensation was neither established or proven. Employers must take care to modify record retention policies relating to documents reflecting compensation decisions.
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EntepriseGRC Solutions is prepared to address rapid change in business regulatory conditions. Our Risk Advisory and Regulatory teams are ready to provide an assessment of HR and compensation practices.
The best offense is a good defense. Given the choice, prudent companies will begin by identifying an optimal Regulatory DNA. Risk Advisory is a process that understands and balances potential exposure against business opportunity, plans and responds proactively, and integrate resilience to these and other emerging legal conditions within an ongoing program of Enterprise Governance Risk and Compliance.
Laws enforced by or aligned to this source
- Age Discrimination in Employment Act of 1967
- Civil Rights Act of 1964
- P.L. 101-336
AKA: Fair Pay Act
Author(s)Claiborne Pell, Rep. George Miller [D-CA]
Publisher: United States 111st Congress, House Education and Labor
Date of Publication: Jan 29, 2009, Sometimes searched as H.RES.5, S.181
URL Source Data
Summary of Standard or Regulation: (Generally as quoted from source)
The Fair Pay Act allows employees to sue at the time of an alleged discriminatory pay practice, or at any time thereafter if the employee is affected by that compensation decision. At the latest, employees will still have to file a charge with the EEOC within 180 days of termination.
Section (3)(A) of the Act states:
“For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation … when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.”
The Act permits employees to recover up to two years in back pay.
The Act extends the time to sue not only for instances of sex discrimination, but also other Title VII categories, including race, color, religion and national origin. The Act also amends the ADA and the ADEA so that the same rule applies to disability discrimination and age discrimination claims.
The Ledbetter Fair Pay Act is retroactive to May 28, 2007, and applies to all lawsuits pending on or after that date.
The Act overturns a 2007 Supreme Court decision addressing the time limit for workers to file pay discrimination claims. Under the Act, the time limit for pay discrimination claims will now start anew each time a paycheck is issued, permitting employees to bring claims for pay decisions made years or even decades earlier.
The law specifically amends Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Rehab Act, and the Age
Discrimination in Employment Act making clear that an unlawful employment practice occurs when:
- A discriminatory compensation decision or practice is adopted;
- An individual becomes subject to the decision or practice; or
- An individual is affected by the decision or practice, specifically, including each time compensation is paid.
Lilly Ledbetter Fair Pay Act of 2009 Law Reference: P. L. 111-2
Codification alt Reference: title VII
A bill to amend title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967, and to modify the operation of the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973, to clarify that a discriminatory compensation decision or other practice that is unlawful under such Acts occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice, and for other purposes.
Consistent with current application of discrimination laws, an individual may only seek back pay damages for the two-year period preceding the filing of a Charge of Discrimination.
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