Ledbetter Fair Pay Act Expands the Time Period for Employees to Raise Pay Claims


Considered a top priority for labor and women's rights groups, President Barack Obama just signed the Lilly Ledbetter Fair Pay Act of 2009 ("Act") into law today, January 29, 2009. The Act was passed by both houses of Congress as a direct response to the Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), which restricted the time period in which employees could file a discriminatory compensation lawsuit.

What this means for employers: Under the Ledbetter Fair Pay Act, employers may find themselves stuck in an endless cycle in which potential discrimination claims are never time-barred. Indeed, given the legislation's retroactive application, claims previously time-barred are once again open and subject to endless renewal with each pay cycle. As a result, employers are strongly encouraged to review their compensation policies and establish protocols to ensure consistent application among employees, regardless of race, age, sex or any other category protected by applicable federal law.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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