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January 30, 2009
Obama Signs Equal Pay Legislation into Law

President Barack Obama has signed legislation that makes it easier for workers to file a pay-bias complaint under Title VII of the Civil Rights Act of 1964.

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The law, the Lilly Ledbetter Fair Pay Act, addresses a Supreme Court decision that said the deadline for workers to file a pay-bias complaint with the U.S. Equal Employment Opportunity Commission 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. Some lawmakers found this deadline too restrictive because many workers don't discover they were discriminated against in pay until long after the action was taken.

The Lilly Ledbetter Fair Pay Act amends Title VII of the Civil Rights Act to clarify that the180-day deadline restarts each time an employee receives a paycheck that reflects past discrimination based on race, color, religion, gender, or national origin.

Specifically, the legislation states that “an unlawful employment practice occurs … 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.”

The legislation also amends the Age Discrimination in Employment Act to include the provision quoted above.

Once Obama signed the legislation, it took “effect as if enacted on May 28, 2007 and apply to all claims of discrimination in compensation under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.), title I and section 503 of the Americans with Disabilities Act of 1990, and sections 501 and 504 of the Rehabilitation Act of 1973, that are pending on or after that date.”

Why did lawmakers choose that date? It was the day before the Supreme Court ruling.

The Supreme Court case involved Lilly Ledbetter, 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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