Delaware Employment Law Blog

The debate about equal pay is bound to continue in light of pending legislation like the Fair Pay Act and the Paycheck Fairness Act, which was passed by the House on July 21, 2008. Here are the nuts and bolts every employer should know about these important new developments.

The Fair Pay Act

The Fair Pay Act seeks to end wage discrimination against those who work in female-dominated or minority-dominated jobs by establishing equal pay for equivalent work. Under the Fair Pay Act, employers could not pay jobs that are held predominately by women less than jobs held predominately by men if those jobs are equivalent in value to the employer. The bill also protects workers on the basis of race or national origin. The Fair Pay Act makes exceptions for different wage rates based on seniority, merit, or quantity or quality of work.

The Paycheck Fairness Act

The Paycheck Fairness Act seeks to strengthen the Equal Pay Act of 1963.  The bill expands damages under the Equal Pay Act and amends its very broad fourth affirmative defense. In addition, the Paycheck Fairness Act calls for a study of data collected by the EEOC and proposes voluntary guidelines to show employers how to evaluate jobs with the goal of eliminating unfair disparities.

Ledbetter Fair Pay Act / Fair Pay Restoration Act

Another interesting piece of pay-related legislation to watch is the Lilly Ledbetter Fair Pay Act / Fair Pay Restoration Act, which seeks to amend the Civil Rights Act of 1964 and other anti-discrimination laws to clarify at which points in time discriminatory actions qualify as an “unlawful employment practice.”  The Fair Pay Restoration Act seeks to change the results of Ledbetter v. Goodyear Tire & Rubber.  (For more information about the Ledbetter decision, see Equal Pay: Fair Pay Restoration Act Voted Down in Senate). 

Under the Fair Pay Restoration Act, an unlawful discriminatory act is committed when a discretionary compensation decision is adopted, when an employee becomes subject to the decision, or when an individual is affected by the application of a decision, including each time compensation is paid.   This is inapposite to Ledbetter, where the U.S. Supreme Court held that employees cannot challenge ongoing pay discrimination if the employer’s original discrimination decision occurred more than 180 days before the most recent discrimination, even when an employee continues to receive paychecks that have been discriminatorily reduced for some time. The law further states that individuals may receive back pay as compensation for discrimination that occurred up to two years preceding the filing of a charge.

The Lilly Ledbetter Fair Pay Act was proposed as a measure to increase the length of time in which employees could file claims for unequal pay based on discrimination. Currently, under Title VII of the Civil Rights Act of 1964, employees have up to 300 days to file a claim from the date of the discriminatory act. Under the Equal Pay Act, claims of pay discrimination based on gender can be filed up to two years after the discriminatory act.

The Lilly Ledbetter proposal generated signficant debate. Opponents saw the bill as preventing employers from closing the door on equal-pay claims because employees would no longer have a hard and fast deadline for filing claims. Advocates saw the bill as a safeguard to ensure that those who were subject to unequal pay but who had no way of learning of the discrimination would not lose their claims on a technicality.

Senate Republicans killed the bill in a 56-42 vote on Wednesday, April 23. Senator John McCain, who stated that he opposed the bill but favors fair pay for women, was campaigning in New Orleans, so he was not present for the vote. Senators Barack Obama and Hillary Clinton both voted in favor of the bill.

The National Women’s Law Center is promoting Equal Pay Week with Blog for Fair Pay Day today.

Equal Pay Week marks the point in 2008 when the average woman’s wages catch up with what the average man earned in 2007. Women’s earnings are still on average only 77% of men’s. The site has a compilation of blog postings (and a “vlog” posting) about the equal pay issue, and a link for readers to use to urge their senators to vote in favor of the Lilly Ledbetter Fair Pay Act. That’s the law designed to reverse the Supreme Court’s ruling that imposed a very short statute of limitations on equal pay claims. The vote may be as soon as next Wednesday, April 23.

Senator Ted Kennedy issued a press statement yesterday voicing his opinion in favor of the Act.

Equal pay is a tricky issue, but one in which the EEOC and OFCCP have both taken an interest of late. The OFCCP advises federal contractors to conduct self-audits of their pay practices. I can attest that a self-audit is a difficult task because so many factors can influence pay and most employers do not track information about training, education, starting pay, etc., in their HR information system.

Whether you are for or against the Ledbetter Act, now is the time to make your opinion known.