By Michelle R. Fearn, CHRP
What does this mean for employers?
On January 29th, 2009, nine days after taking the oath of office, President Barack Obama signed the Lilly Ledbetter Fair Pay Act into law. The Act is an amendment to the Civil Rights Act of 1964, and is retroactively effective back to May 28, 2007, the day before the court ruling on the discrimination claim filed by Lilly Ledbetter against her former employer, Goodyear Tire & Rubber.
What exactly does this mean for employers?
Employers must now be more consciously aware when setting pay levels for employees within the organization, to ensure fair pay compliance regardless of gender, race, or any other protected category under the Title VII of the Civil Rights ACT, ADA, ADEA or the Rehabilitation Act of 1973.
Essentially, the Lilly Ledbetter Fair Pay Act makes every unequal paycheck an act of potential discrimination. Consider a company who has two managers, one male and the other female. Both have the same experience and seniority, and are performing the same job. The female manager however is making considerably less money than her male counterpart. Under the Lilly Ledbetter Fair Pay Act, every single paycheck in which this unequal pay occurs may be considered an act of discrimination, and it will be the employer's responsibility to defend pay decisions.
Is there a statute of limitations for filing a claim?
Employees who feel they have been discriminated against in terms of fair pay will now have 180 days in which to file a complaint with the EEOC (Equal Employment Opportunity Commission). Each time a new act of alleged discrimination occurs, this window of time starts over. Therefore, employees who have worked for a the same company for many years, and who claim that they have been unfairly paid a lower wage during that time, can technically file a discrimination claim up to 180 days of receiving the most current unequal pay check, going back two years from that date. The exception would be those states that have fair employment agencies, in which case employees shall have up to 300 days to file a claim.
What happens if the employee wins his or her claim?
If the employee's case is won, the employer would then be required to pay back wages for up to two years prior to the date the claim was filed, as well as compensatory and punitive damages.
Being Prepared: What employers need to know!
- Compensation Audit - Are there any inequities? Conduct a full compensation audit to find out. If inequities are discovered within your organization that are indefensible and potentially discriminatory, voluntarily correct them immediately or identify valid reasons explaining the discrepancy and be prepared to provide proper supporting documentation to back up these reasons.
- Audit Job Descriptions - There should be clear and valid distinctions among those jobs that may seem similar on the surface and for which different pay levels exist.
- Training - Provide proper training to those managers with decision-making authority to educate them on how certain decisions made can be seen as retaliatory or discriminatory. Review Title VII and ADA especially.
- Update Handbook - Ensure that corporate policy and philosophy promotes anti-discriminatory practices. Amend policies as needed to enforce pay compliance. Have a simple process for employees to use when reporting potential pay concerns.
- Review of Record Retention practices - If your company were in a position of needing to defend itself against an EEOC claim, would you have those records available to present in your defense? A review of your company's record retention practices may be necessary to determine how long you are currently retaining employment records and if that retention time may be sufficient. Please keep in mind that certain state laws, depending upon where you work, may govern the length of time for which specified documents must be retained. Please refer the Department of Labor website at www.dol.gov for more information on required record retention periods in your area.
- Implement new practices - So you've reviewed your current pay practices and they are not quite in line with the Fair Pay Act. Work with your Human Resources department to develop new practices going forward to eliminate possible claims of pay discrimination in the future. DON'T DELAY!!!!
- Avoid retaliation! - Remember, retaliation is illegal so be careful about decisions being made following an employee complaint. Employees have the right to express their concerns and all concerns should be taken seriously and investigated properly. **Please request the assistance of a representative from your company's Human Resources department.
For more information on the Lilly Ledbetter Fair Pay Act, please visit www.dol.gov
About the Author:
Michelle Fearn is the Human Resources Manager for Employment Enterprises, Inc.'s corporate office and provides human capital support and strategic guidance to a number of our clients. A certified professional, Michelle received her formal training in her hometown of Toronto, Canada and has a combined 14 years of human resource experience both in Canada and the United States. Her multi faceted experience as a generalist ranges from employers in the service industry, retail, medical, real estate, and non-profit.
