Thursday morning, President Barack Obama signed the first bill of his White House tenure, putting his campaign theme of change into immediate action by overturning U.S. Supreme Court precedent.The Lilly Ledbetter Fair Pay Act will affect employers charged with pay discrimination by significantly expanding employees’ time for filing suit.
Specifically, the Fair Pay Act amends Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act (ADEA) to declare that an unlawful employment practice occurs not only upon adoption of a discriminatory compensation decision or practice but also when the employee becomes subject to the decision or practice as well as each additional application of the decision or practice. In other words, the 180-day statute of limitations will now be extended on every occurrence of an unlawful employment practice, including issuance of paychecks.
The Lilly Ledbetter Fair Pay Act came as a direct response to the 2007 U.S. Supreme Court ruling in the case of Lilly Ledbetter v. Goodyear Tire and Rubber Company. In the 5-4 decision, the Supreme Court ruled that
Lilly Ledbetter was no longer entitled to file a wage discrimination claim because she had failed to do so within 180 days of the initial discriminatory wage decision.
Though the Fair Pay Act stumbled in its initial run through Congress in 2008, it passed quickly in the opening sessions of 2009, gaining House support of 247-171 and Senate support of 61-36. Today, as
the 70-year-old Lilly Ledbetter looked on, President Obama signed the Act into law.
The bill does retain some limits on employer liability by restricting back-pay awards to two years, but employer questions and concerns will still arise, particularly with regard to record retention requirements.
Look for more detailed coverage of the Fair Pay Act in an upcoming issue of your state’s Employment Law Letter.
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