Lilly Ledbetter Fair Pay Act Signed into Law on 1/29/2009

Paul R. Dorf PhD, APD
February 17, 2009 — 2,557 views  
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On January 29, President Barack Obama signed the Lilly Ledbetter Fair Pay Act. This law applies to discriminatory pay complaints and remedies under several current laws, including Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 (ADEA), as well as parts of the Americans with Disabilities Act of 1990 (ADA) and the Rehabilitation Act of 1973.

The legislation cancels out a Supreme Court ruling last year that declared plaintiffs had to file wage claims within 180 days of a company's decision to pay a worker less than a counterpart doing the same work. As long as the employee is still employed with a company, they may file a complaint, since it may take years to uncover the discriminatory practice. The new law extends the filing deadlines for pay-bias complaints and clarifies the definition of a discriminatory employment practice.

The new legislation will change the way employers manage compensation decisions, including the manner in which they may establish, intentionally or not, disparate pay between men and women. Overall, women across this country still earn just 78 cents for every dollar men earn.

The legislation is expected to cause many companies to examine their processes for making compensation decisions to ensure that pay actions are justifiable based on merit, not gender. Actions that employers should take in light of this legislation include the following:

  • Review existing pay administration policies, including recordkeeping.
  • Consider new policies to make sure any existing pay inequities are corrected and supervisors and managers are trained to avoid them in the future.
  • Review all job descriptions so that they are not biased towards one gender.
  • Implement training for managers on effective hiring decisions, especially with regard to pay.
  • Fully engage Human Resources in the hiring process to monitor and ensure fairness and equity.
  • Review any closed or pending charges and lawsuits, and consult and use outside legal counsel.
  • Review related company policies to ensure that they clearly reflect the employer's commitment to fair employment practices.
  • Reaffirm your company's compliance with all applicable federal and state regulations regarding fair pay.

Although these actions will not eliminate the possibility of claims of unfair pay, undertaking these exercises of due diligence may help to reduce a company's exposure.

About the Author

Paul R. Dorf is the Managing Director of Compensation Resources, Inc. He is responsible for directing consulting services in all areas of executive compensation, short and long-term incentives, sales compensation, performance management systems, and pay-for-performance salary administration. He has over 40 years of Human Resource and Compensation experience and has held various executive positions with a number of large corporate organizations.

Paul R. Dorf PhD, APD