President Barack Obama signed the Lilly Ledbetter Fair Pay Act of 2009 this morning. As this case has been lingering, the effective date of the bill is May 28, 2007. So, any federal cases currently pending that were filed after May 28, 2007 will be subject to this new law. The bill has two components:
(1) Title I reverses the U.S. Supreme Court decision from 2007 that limited the statute of limitations for federal claims of discrimination and unequal pay to when the pay decision was made. Lilly Ledbetter, the employee in the case, claimed the statute of limitations should run starting with the issuance of each individual paycheck because each paycheck was a continuing violation of the discriminatory act of unequal pay. The Supreme Court disagreed with Ms. Ledbetter, but Congress and President Obama agree with her. This new law, which amends Title VII, ADEA, the Rehabilitation Act and the Civil Rights Act specifically states:
An unlawful practice occurs, with respect to discrimination in compensation, when a discriminatory-compensation decision or other practice is adopted, when a person becomes subject to a discriminatory-compensation decision or other practice, or when a person 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.
(2) Title 2 of the Act is the Paycheck Fairness Act. This section expands retaliation protections and increases penalties for violations of equal pay requirements. It also provides for increased training within government agencies and for girls and women relating to negotiation skills and additional education in this area.
As a California employer, how does this impact you? California law, including our equal pay statute and the Fair Employment Housing Act, provides these protections. However, our law is not as clear regarding when the statute of limitations begins to run for these types of cases. It is established in California that a "continuing violation" is a cause of action based upon a series of actions by the employer that discriminate against an employee or employees. The Lilly Ledbetter Act more clearly defines for purposes of equal pay what a continuing violation is. It is unclear whether California courts will adopt this bright line test.
It is also important to note that should a person file a federal case under these new requirements, he or she will only be eligible to recover damages going back two years (the statute of limitations) even if the claim extends beyond that time period. In California, the statute is also two years but can extend to three years if the violation is willful.
We will continue to cover this case and provide an additional summary in next week's HRCE. If you do not currently receive this free newsletter, Sign up now!
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