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Ledbetter Law Sets the Tone for Work Ruls to Come

The Lilly Ledbetter Fair Pay Act, signed into law in January 2009, is named after a woman who was paid less than her male co-workers at a Goodyear Tire & Rubber plant in Alabama over the course of her 19-year career there.

August 6, 2009
Related Topics: Labor Relations, Workforce Planning
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The Lilly Ledbetter Fair Pay Act, the first piece of legislation signed by President Barack Obama, looks to ensure that workers alleging discrimination on the basis of gender, race, age or disability have a fair chance to sue their employers.

The act, signed into law in January, is named after a woman who was paid less than her male co-workers at a Goodyear Tire & Rubber plant in Alabama over the course of her 19-year career there. She sued.

A jury ruled in her favor, but in 2007, the U.S. Supreme Court tossed out her claim, saying she should have filed suit within 180 days of the first time Goodyear paid her less than her peers. Having missed that window, she had no grounds to sue, the court determined.

The Lilly Ledbetter Fair Pay Act essentially restarts the 180-day clock every time an employee receives a paycheck. As a result, workers now have many years to claim pay discrimination. And they can sue to recover up to two years in back pay.

To comply with the new act, and to protect your business from discrimination claims, human resources consultants and legal advisors recommend taking a close look at compensation decisions and how those decisions are documented.

For example:

• Review employee pay and ensure there are demonstrable business reasons—such as education, training or experience—for any disparities.

• Complete performance evaluations accurately and in a timely manner.

• Retain copies of payroll records and performance reviews. Documentation can be used to support decisions on promotions, raises and bonuses.

• Train supervisors who are responsible for hiring, firing, disciplining and promoting employees on what the law requires.

• Review and update employment policies and handbooks. Be clear that discriminatory practices and decisions are not tolerated.

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