What do HR Mangers Need to Know about the Lilly Ledbetter Fair Pay Act?

If you’re a human resources manager, there are a few things you need to know about the Lilly Ledbetter Fair Pay Act, signed into law by President Obama in 2009.

The most important issue to be aware of is that an employee can file a civil rights lawsuit against the company within 180 days of receiving a paycheck based on discriminatory wages.

Even if the decision to pay an employee a discriminatory salary was made years before by a manager who no longer works with the company, the organization is still responsible for back pay and perhaps compensation for years of discrimination.

The Story Behind the Fair Pay Act

The law is the result of a bill proposed in Congress following a Supreme Court ruling against Lilly Ledbetter. She had won a lawsuit against her employer, Goodyear Tire & Rubber, but the judgment was overturned by an appeals court decision. According to her lawsuit,, Ledbetter had been sexually harassed and paid significantly less than her male counterparts at a Goodyear Tire facility in Gadsden, Alabama. She had no idea she was being paid less than her co-workers until someone left an anonymous note telling her about the situation. When she found out, she filed a lawsuit against her employer and was awarded back pay as well as $3.3 million to compensate for the damages.

After the decision, Goodyear took the case to an appeals court and had the ruling overturned. The U.S. Supreme Court upheld the decision to overturn the judgment by a slim 5-4 majority. Justice Ruth Ginsberg wrote a dissenting opinion on the verdict, and later, Congress unsuccessfully proposed a law that would have upheld Ledbetter’s judgment. The bill was shot down by Republicans in the Senate who thought that malicious employees could abuse the law by waiting to sue their employers until they were unable to defend themselves.

What the Law Means for HR Managers

In 2009, the legislation was the first bill signed into law by President Obama. Supporters of the law say that it removes an employer’s incentive to hide wage discrimination because cumulative back pay will be owed to employees who file suit. It also encourages employees to speak up about discrimination as soon as possible because defendants have the burden of proof in civil rights discrimination cases.

Support for the law is divided along party lines in Congress. Democrats support the Lilly Ledbetter Fair Pay Act because it protects the civil rights of traditionally underrepresented groups, and Republicans oppose it because it increases the liability of employers. The Civil Rights Act of 1964 outlaws wage discrimination, but the statute of limitations for filing a civil rights lawsuit is 180 days. The new law doesn’t change the statute of limitations, but it clarifies when the interval begins. Under the old laws, employers could hide wage discrimination for 180 days and get away with it. The new law causes the time period to restart after every paycheck containing discriminatory wages. The new law gives employees more leeway in bringing a lawsuit to court, and it increases employer liability.

Both wage discrimination and employee lawsuit abuse are real problems in the workplace, and laws are needed to prevent these problems. If you’ve recently taken over as your company’s HR manager, the passing of the Lilly Ledbetter Fair Pay Act means that you should find out about any past discriminatory pay at your company as soon as possible.

See also: What is the Genetic Information Nondiscrimination Act?