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How to Play Fair Pay

March 12, 2009
The Lilly Ledbetter Fair Pay law extends the statute of limitations for filing a discrimination claim against an employer.

On Jan. 29 President Barack Obama signed into law an equal-pay bill that extends the statute of limitations for filing a discrimination claim against an employer. Named after a longtime Goodyear Tire & Rubber Co. employee who sued the company for a pay discrepancy, the Lilly Ledbetter Fair Pay Act says employees have 180 days to file claims for each discriminatory paycheck. Previously, workers only had 180 days to file a claim from the time the employer initially decided to pay the wage in question.

Since the change may raise questions by employers about how their pay practices could be impacted, IndustryWeek asked John Myers, chair of the employment and labor practice at Pittsburgh-based law firm Eckert Seamans Cherin & Mellott LLC, for clarification on what the law means and how manufacturers can protect themselves from future claims.

IW: How is the Lilly Ledbetter Fair Pay Act (LLFPA) different from the Equal Pay Act?

John Myers: The two are not really comparable. The Equal Pay Act prohibits paying an employee less than another employee for substantially the same work because of sex. It does not apply to race, disability, or age, whereas the LLFPA does. LLFPA has nothing to do with fair pay -- that is just a campaign slogan. In other words, it does not require equal pay for equal work; nor does it enact any requirements that have to do with how employees are paid or which prohibit discrimination in pay. It is just a law that extends the statute of limitations, not under the Equal Pay Act (which has not been amended by the LLFPA), but for compensation claims under Title VII, the ADA, the ADEA and the Rehabilitation Act.

IW: Should employers start reviewing their compensation practices to ensure they're abiding by the law?

John MyersMyers: Employers should always strive to assure that their compensation practices comply with the law. However, there is nothing in the LLFPA about compensation practices, so that law does not call for any review as such. Because the new law eliminates the statute of limitations defense to claims that some discriminatory event in the distant past is having a current adverse impact on his or her pay, an employer should look into any claims of that type that are made by its employees.

IW: What are some common pay policies/practices that may need to be reviewed or revised?

Myers: My advice is not to do a review because of this law, since the law does not relate to pay practices, just pay lawsuits. However, any employer who may have had past practices that could now be deemed discriminatory under current law, such as the example given above, should do a self analysis as to whether those practices might continue to affect the compensation of employees today. An example would be: An employer who may have once had segregated departments, but then integrated them, and who used departmental seniority for layoffs and recalls over the years would be vulnerable to a claim that the layoffs reduced seniority and they were unlawful effects of prior discrimination.

IW: What are some steps employers can take to protect themselves against future litigation relating to the bill?

Myers: Because this act is centered on workplace litigation once allegations have been made, the act itself does not lend itself to proactive preventative practices, despite a lot of law firms running around claiming that employers should start doing audits of their pay practices. There is no realistic way to audit to discover the kinds of claims that LLFPA revitalizes. Even if you would unearth potential issues, in the absence of litigation initiated by an employee or former employee, the LLFPA does not apply. There is no reason then to address a past event that might never be the subject of a lawsuit.

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