labor lawAdivision of labor law center

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 (more…)

On January 29, 2009, President Obama signed the Lilly Ledbetter Fair Pay Act of 2009. The fact that this act was Obama’s first bill signed into law, may signal a busy year ahead for labor legislation.

In a statement before the signing, President Obama said, “Lilly Ledbetter did not set out to be a trailblazer or a household name. 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. Over the course of her career, she lost more than $200,000 in salary, and even more in pension and Social Security benefits — losses that she still feels today.”

Lilly Ledbetter worked at Goodyear Tire and Rubber Company for two decades before learning that she had consistently been paid less than her male colleagues for the identical job. She filed suit (more…)

The U.S. House of Representatives recently passed the Ledbetter Fair Pay Act. In doing so, the House Democrats acted quickly to fulfill a 2008 campaign promise.

The Ledbetter Fair Pay Act, also known as HB 11, will overturn a decision by the U.S. Supreme Court that employees have only 6 months to file a claim for pay discrimination against an employer.

The law is named after Lilly Ledbetter, an Alabama woman who was paid less than her male colleagues for the same work at Goodyear Tire and Rubber Company, for more than 20 years. The Supreme Court ruled that since Ledbetter did not file a complaint during the first 6 months she was employed, the discrimination was legal. This was true, although Ledbetter had no reason to believe for several years that she was the target of discrimination.

Votes for the Ledbetter Fair Pay Act were split according to party lines, with the overwhelming majority of Republicans voting against the bill. Republican business leaders say that the measure will increase the number of employment and pay discrimination claims against employers. They point out that even when such a claim is unfounded, it is expensive for an employer to fight the claim in court. Winning can carry a high price tag, including attorney’s fees in excess of $100,000. 

Many Democrats supported the Ledbetter Fair Pay Act. Many pointed out that the law will help eliminate discrimination in pay based on gender, race, color, national ancestry, age, etc. Proponents point out that women still earn only 78% of the wages earned by men holding the same jobs.

This law makes it even more crucial that every employer have an anti-discrimination policy and training in place. Employers should also review wages to ensure that they can be justified by objective criteria such as the employee’s qualifications and performance evaluations.

A similar bill passed the House in July 2007, but faced still opposition by Republicans in the Senate. Then-president George W. Bush also vowed to veto the bill, if it was passed by the Senate.

President Obama has said repeatedly that he supports the measures, and vowed to sign it if passed. With Democrats now holding 57 Senate seats, it seems likely that this bill will be passed and signed into law in 2009.

The AARP, formerly known as the American Association of Retired Persons supports the bill. Business groups including SHRM, the Society of Human Resource Management and the U.S. Chamber of Commerce, oppose the bill. They argue that a strict interpretation of the bill could result in companies being unable to pay different salaries based on geographical area. If an employer paid a manager in New York City more than a manager in Birmingham, Alabama for example, the employer could be sued. Because the cost of living in New York is almost twice that of Birmingham, employers have long had to pay higher salaries in such metro areas to attract equally qualified candidates in both regions.