The Senate passed the Lilly Ledbetter Fair Pay Act of 2009 by a vote of 61 to 36 with both Pennsylvania Senators supporting the legislation. President Obama has previously stated he will sign the law.
The Ledbetter Fair Pay Act redefines the "accrual" of a compensation discrimination claim as follows:
For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, 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.
Violations of the law entitle employees to recover compensatory and punitive damages including recovery of back pay for up to two years preceding the filing of the charge, where the unlawful employment practices that have occurred during the charge filing period are similar or related to unlawful employment practices with regard to discrimination in compensation that occurred outside the time for filing a charge.
The law is retroactive to the May 28, 2007 (the date of the Supreme Court’s Ledbetter decision) effectively reviving all claims that are pending or after that date.
Forces employers to modify their pay practices and evaluation procedures including the following:
- Better justify and document their compensation decisions.
- Review promotion procedures which may fall under the law because of the attendant compensation adjustment.
- Create an institutional memory that captures the basis for compensation and promotion decisions.
- Design a record retention system that allows for the defense of claims.
Thanks to the Connecticut Employment Law Blog for insights.