Fair Pay Act Signed By Obama

WASHINGTON–President Barack Obama signed legislation today reversing a Supreme Court decision that severely limited workers' ability to sue their employers on the basis of wage discrimination.

The signing of the Lilly Ledbetter Fair Pay Act came just two days after final congressional action. President Obama said the measure is “by no means a women's issue, it is a family issue.”

“Signing this bill today is to send a clear message that making our economy work means making sure it works for everybody,” President Obama said.

The president was accompanied when he entered the White House East Room by Lily Ledbetter, the Alabama woman who is the named plaintiff in the 2007 Supreme Court decision that was reversed by the new law.

Their arrival drew cheers from an audience that included many prominent women in politics, including Secretary of State Hillary Clinton and House Speaker Nancy Pelosi.

“It is appropriate this is the first bill we do together,” President Obama told the speaker.

Christine Bonavita, a lawyer in the Philadelphia and Cherry Hill, N.J., offices of Blank Rome LLP, said the important part of this legislation is that the time period for potential discrimination claims restarts each time the wage or benefit is paid, even if the decision was first made prior to the applicable filing period.

“This means that under the legislation an aggrieved employee has multiple opportunities to file a claim because each time a wage or benefit is paid, the liability period restarts,” Ms. Bonavita said.

Equally important, the law takes effect as if it was enacted on May 28, 2007 and applies to all claims of discrimination in compensation that are pending on or after that date, she said.

The Supreme Court decision involving Ms. Ledbetter held that she was not entitled to sue for wage discrimination because she had not filed her claim within 180 days of “the alleged unlawful employment practice.”

Ms. Ledbetter had sued contending that male workers who did the same job as she did at the factory where she worked were paid more.

The new law, the Equal Pay Act, prohibits sex discrimination in the form of unequal pay for equal work. Under current law, employers can avoid liability if they can prove that the alleged discrimination comparison was a result of any factor other than sex. Under this new Act, employers can only rely on this affirmative defense where the factors other than sex are job-related or serve a legitimate business interest.

Ms. Bonavita said that as a result of the new law, employers should review their compensation plans, benefit programs, payroll practices and wage information, to ensure that the application of those plans do not have a disparate impact upon individuals in a protected class.

“This could include a statistical analysis to ensure that any compensation plans don't demonstrate significant disparities amongst employees in protected classes,” she said.

This review should include salary and compensation plans so that employees who perform the same jobs and who have the same skills and qualifications are paid the same rates. “Any disparities should be based on legitimate non-discriminatory justifications such as seniority,” she said.

One big issue is training managers and supervisors to ensure that no employee who either questions their compensation, who files a charge alleging discrimination in compensation, or who cooperates in an investigation regarding similar allegations is not retaliated against,” Ms. Bonavita said.

“Employers definitely need to retain their compensation records, as well as their bonus plans, and employment performance reviews,” she advised.

“They should make sure that performance evaluations are accurately completed so that they support any subsequent employment decisions,” she added.

Ms. Bonavita said the new law makes it clear it is applicable to more than just compensation decisions.

The law, she said, applies to promotion, training, discipline and other employment decisions.