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Employers need to retain compensation records, performance reviews, employee evaluations and other documents supporting wage decisions longer, in order to defend against a possible suit under the Ledbetter Fair Pay Act.

 

The Lilly Ledbetter Fair Pay Act of 2009 is now law. The Senate approved the bill on January 22, 2009 by a 61-36 vote, and President Obama signed it exactly seven days later. It was the first bill the new President signed into law.

 

The Ledbetter Act, named for Lilly Ledbetter, who filed a gender salary discrimination complaint, essentially allows complainants considerably more time than in the past to take such actions.

 

This new law means that employers must ensure that they are using an objective system to establish compensation. And, they must retain records of that system for many years, in case they are needed in a lawsuit.

 

When she worked for the Goodyear Tire and Rubber Company, it took her 20 years to discover that she had been paid less than male coworkers for doing exactly the same work. When she filed a suit, it was ruled that she had not met the 180-day deadline. She took the case to the Supreme Court, which upheld the lower ruling, despite the fact that Ledbetter did not learn of the disparity until she received an anonymous tip.

 

Previously, EEOC regulations held that each time an employer issued an unequal paycheck to a worker, it was a separate incident of discrimination and the employee had 180 additional days to file suit. However, in Ledbetter vs. Goodyear, the Supreme Court overturned that regulation. This law returns to the EEOC regulation.

 

The U.S. Chamber of Commerce and the SHRM (Society for Human Resource Management) both opposed the Ledbetter Act, arguing that the new law would have significant unintended consequences in the future. Proponents of the bill, however, pointed out that such consequences could be easily avoided by employers who do not discriminate on the basis of gender.

 

In her suit, Ledbetter had claimed that she lost more than $200,000 in salary, as well as pension and Social Security benefits./

 

Two amendments to the Act were defeated. One, submitted by Sen. Arlen Specter, would have confined the Fair Pay Act strictly to pay discrimination, but not to other matters like benefits, vacations, training, and promotions. Another, offered by Sen. Kay Bailey Hutchinson, would have still put a 180-day deadline on filing, but set it for the period after an employee learns of such discrimination.

 

“Lilly Ledbetter did not set out to be a trailblazer or a household name,” said President Obama when signing the bill. “She was just a good hard worker who did her job – and she did it well – for nearly two decades before discovering that for years, she was paid less than her male colleagues for doing the very same work.”

 

The President said he intended to “send a clear message” by signing the bill.

 

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