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President Signs Wage Discrimination Law

February, 03 2009

On January 29, 2009, the president signed into law the "Lilly Ledbetter Fair Pay Act of 2009."  The law alters the statutes of limitations for pay discrimination cases.  Previously, an employee had to file a charge of discrimination within 180 days (300 days in South Carolina) of the decision to pay the employee in a discriminatory manner.  Under the new law, each time an employee is affected by a discriminatory pay decision, a new 180/300 day time limit begins.  That means that each time an employee receives a pay check that is lower because of a discriminatory decision, the statute of limitations starts over.  The new law applies to claims of pay discrimination because of race, color, religion, sex, national origin, age or disability.

Impact for Employers

While the change in the law may impact employers who are sued by employees claiming wage discrimination, it is unlikely to cause any major shift in employment practices.  Employers have long been forbidden from engaging in pay discrimination.  The new law will simply allow employees to sue employers for decisions made long ago.  Because some claims could be based on decisions made years, or even decades ago, employers may want to consider whether changes need to be made to their record retention policies for decisions that impact pay.

Law Reverses Supreme Court Decision

The new law is named for Lilly Ledbetter, a plaintiff in a suit brought against her employer alleging pay discrimination based on a decision made years before she filed suit.  The Supreme Court ruled that Ledbetter's claim was barred because she had not filed a charge of discrimination within 180 days of the alleged discriminatory decision.  Ledbetter gained celebrity during the presidential campaign in ads supporting President Obama.

If you have questions about the new law or your organization's obligations in wage and salary administration, please contact us.

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