The Lilly Ledbetter Fair Pay Act is a federal statute that was signed into law by President Barack Obama in January 2009. In the United States, women make an average of 77 cents for every dollar earned by a man. The Act aims to help close this gap by resetting the 180 day statute of limitations for equal pay lawsuits with every new paycheck issued. Read on to learn more about the Lilly Ledbetter Fair Pay Act.
About Equal Pay in the United States
In 1963, the Equal Pay Act, passed by President Kennedy, stated that two employees at a company who are doing the same type of work must receive equal pay regardless of gender. However, under this Act, merit or seniority based pay may be unequal, as long as these systems are administered fairly. The Fair Pay Act is an amendment to this original Act that expands provisions under which employees may challenge workplace discrimination and unequal pay. Learn more about equal pay in the United States from the National Alliance for Partnerships in Equity, which maintains resources online at .
Origins of the Act
Lilly Ledbetter, a supervisor at Goodyear, filed an equal pay lawsuit against the corporation after she learned that she earned much less than two male managers in comparable positions. Though she was awarded $3.3 million in punitive damages, this decision was later overturned by the Supreme Court on the grounds that employees may not contest wage discrimination if more than 180 days have passed since the initial wage discrimination occurred, even if it has been continued with subsequent paychecks. Less than two years later, Obama passed the Fair Pay Act to overturn this Supreme Court decision and help mitigate its effects by allowing wage discrimination suits to be filed within 180 days of the most recent paycheck reflecting the discrepancy.
Results of the Act
Under this Act, employees may challenge unfair pay even if they are not initially aware that they are being discriminated against by their employers. Not only does this Act allow women to better fight back against gender based discrimination in the workplace, it puts measures in place to help ensure that this discrimination does not take place at all. Employers must voluntarily comply with the Act and do not have any incentive to hide pay discrepancies as they did under the previous Supreme Court ruling. However, employees do have incentive to challenge wage discrepancies as promptly as possible since, under the Act, there is a two year cap on back pay that will be awarded in a lawsuit.
This act is an important step to help close the gender based wage gap that has persevered for decades even after the original Equal Pay Act was passed in the United States. For additional reading about the Lilly Ledbetter Fair Pay Act, visit the National Women’s Law Center, where you can download the full text of the bill.
You may also like: Which Employee Benefits are Legally Required and Which are Optional?