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January 12, 2009
Houses Passes Equal-Pay Bills

The U.S. House of Representatives has approved two pieces of legislation that proponents say will boost protections against gender discrimination in compensation.

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The House has voted in favor of the legislation before, but proponents say the bills have a better chance this time around because the Senate has more Democrats and President-Elect Barack Obama supported the legislation (he voted for it before as a Senator).

The House voted 247-171 in favor of the Lilly Ledbetter Fair Pay Act of 2009 (HR 11). The legislation would amend the Civil Rights Act of 1964 to declare that an unlawful employment practice occurs when (1) a discriminatory compensation decision or other practice is adopted; (2) an individual becomes subject to the decision or practice; or (3) an individual is affected by application of the decision or practice, including each time compensation is paid.

The legislation is significant in the wake of a 2007 Supreme Court ruling. The Supreme Court ruled 5-4 that the deadline for workers to file a pay-bias complaint under Title VII of the Civil Rights Act is 180 days from the date the decision on their pay is made and communicated to them.

In general, an individual wishing to bring a discrimination lawsuit must first file a complaint with the U.S. Equal Employment Opportunity Commission within 180 days "after the alleged unlawful employment practice occurred." The employee in the Supreme Court case, Lilly Ledbetter, had argued that the clock on that 180-day deadline restarts each time an employee receives a paycheck that reflects past discrimination. The Supreme Court disagreed.

The Lilly Ledbetter Fair Pay Act of 2009 would allow an employee to recover back pay for up to two years preceding the filing of the pay-bias complaint, when the unlawful employment practices that occurred during the charge filing period are similar or related to practices that occurred outside the time for filing a charge. This provision would also apply to claims of compensation discrimination under the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973.

The legislation would also amend the Age Discrimination in Employment Act of 1967 to declare that an unlawful practice occurs when a discriminatory compensation decision or other practice is adopted, when a person becomes subject to the decision or other practice, or when a person is affected by the decision or practice, including each time compensation is paid.

The House also voted 256-163 in favor of legislation (HR12) that would amend the Equal Pay Act. The legislation would revise exceptions to prohibitions against sex discrimination in compensation and allow employees (and the Department of Labor) to recover compensatory and punitive damages when an employer has discriminatory pay practices.

The legislation, for example, would revise the Equal Pay Act to declare that the exception to the prohibition against wage differences is limited to bona fide factors, such as education, training, or experience.

The legislation states that for the bona-fide factor defense to apply, an employer must show that the factor: (1) is not based upon or derived from a sex-based differential in compensation; (2) is job-related with respect to the position in question; and (3) is consistent with business necessity.

Under the legislation, the bona-fide factor defense wouldn't be available to employers if the employee could prove that (1) an alternative employment practice exists that would serve the same business purpose without producing such differential; and (2) the employer has refused to adopt such alternative practice.

Lilly Ledbetter was a supervisor at Goodyear Tire and Rubber's plant in Gadsden , Alabama , from 1979 until her retirement in 1998. At first, her pay was in line with the salaries of men, but over time, a gap developed between her salary and the pay of male area managers with equal or less seniority. By the end of 1997, Ledbetter was the only woman working as an area manager and was paid $3,727 per month. By comparison, the pay of the lowest paid male area manager was $4,286 per month.

Ledbetter sued in 1998, alleging disparate treatment. The company argued that the suit should be dismissed because Ledbetter failed to file a complaint with the EEOC within 180 days of the previous pay decisions that Ledbetter alleges were discriminatory.

However, Ledbetter argued that the clock on the 180-day deadline restarted after each paycheck that reflected past discrimination. She claimed that each time the company issued her a paycheck, the company demonstrated an intent to discriminate and violated Title VII. The majority of the Supreme Court rejected her arguments, saying Ledbetter should have filed a complaint after each pay decision.

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