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Increased
Employer Risk in New Pay Discrimination Law
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Employers,
act immediately. Review your employees' pay now, looking for any
instances of possible illegal pay discrimination. Especially, look
for any possible pay discrimination or disparity in pay that's been
going on for several years.
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What To Do
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Employers need to assume that some
employees who are protected from illegal discrimination...and who
perceive they may be experiencing disparity in pay...will take the
Ledbetter Fair Pay Act as an opportunity to initiate legal action.
 So,
employers need to:
· Review pay. Review pay practices,
looking for pay inequities among employees, even possible pay
inequities going back many years. (Remember, the new Fair Pay Act
means that if there is inequity in pay for a legally protected
employee stemming from an illegally discriminatory decision in the
past, an employee can argue an illegal, discriminatory act each
time a new pay check is issued.)
· Identify possible inequities.
Identify any possible illegal pay inequities and review the
findings with an attorney to decide (1) if the inequities should be
remedied, or (2) if they are justified, and (3) if objective
documentation exists to support the legality of the disparities.
Finding
objective documentation is where the greatest difficulty may lie
for employers facing discrimination charges stemming from the Fair
Pay Act. When the pay disparity decision was made some time in the
past, it increases the chances that the individuals who made the
decision no longer are available and that the original
documentation supporting the decision (if it had existed) no longer
does exist.
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Why
such urgency?
The
new pay discrimination law – and the first law signed by President
Obama – likely will increase the risk of wage bias legal actions
against employers.
The
new law, named the Lilly
Ledbetter Fair Pay Act of 2009 --quickly passed by
the new Congress and signed by President Obama, -- reverses the 2007
U.S. Supreme Court decision in a wage discrimination action Ledbetter
brought against her former employer and lost. In that decision,
brought against Goodyear Tire & Rubber Company, the court ruled
that employee Ledbetter could not sue Goodyear for pay discrimination
she had experienced for about 19 years. The reason? Because she had
failed to initiate the discrimination charge within 180 days of the original act of pay
discrimination.
Ledbetter's
position was that each time Goodyear issued a new paycheck to her in
an amount less than her male peers a new illegal discriminatory act
occurred. Therefore, she argued, the legal time period of 180 days
for her to file a claim of discrimination was triggered after each
new paycheck.
Here's what led to the Ledbetter
v. Goodyear lawsuit...
Shortly
before she retired in 1998 as an area manager, she found an anonymous
note in her mailbox at work. The note was a tip, telling her she had
been getting paid less than the men who worked the same job. It
didn't take her long to file an Equal Employment Opportunities
Commission (EEOC) discrimination complaint.
During
most of the time Ledbetter was employed by Goodyear, salaried
employees at the plant where she worked were given or denied pay
raises based on performance evaluations. Ledbetter in her lawsuit
claimed that several supervisors in the past had given her poor
evaluations because of her sex. As a result, she argued, her pay had
not increased as much as it would have if she had been evaluated
fairly. As a result, at the end of her employment the accumulated pay
disparity meant she was earning significantly less than her male
peers.
The
court noted that Title VII of the Civil Rights Act requires that an
employee file a discrimination charge within 180 days or 300 days
(depending on the state) of the occurrence of the alleged unlawful
employment practice. Then the court stated, "A new violation
does not occur, and a new charging period does not commence, upon the
occurrence of subsequent non discriminatory acts that entail adverse
effects resulting from the past discrimination."
The
new Ledbetter Fair Pay Act reverses that decision by the Supreme
Court. The law takes effect retroactively to the day before the
Supreme Court ruling in 2007.
The
Fair Pay Act first makes this broad statement: "With regard to
any charge of discrimination under any law, nothing in this Act is
intended to preclude or limit an aggrieved person's right to
introduce evidence of an unlawful employment practice that has
occurred outside the time for filing a charge of
discrimination."
Then
the new law addresses discrimination in pay because of race, color,
religion, sex, or national origin, and other illegal discrimination.
It states: "...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
new law applies to employees covered under these laws: The Civil
Rights Act, the Age Discrimination in Employment Act, the Americans
With Disabilities Act, and the Rehabilitation Act.
[NOTE:
Information and guidance in this story is intended to provide
accurate and helpful information on the subjects covered. It is not
intended to provide a legal service for readers' individual needs.
For legal guidance in your specific situations, always consult with
an attorney who is familiar with employment law and labor issues.]
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