Fair Pay Act

EMPLOYMENT ALERT

"FAIR PAY ACT" AND 'EQUAL PAY FOR EQUAL WORK'!

By Karen A. Khan, Esq.

Some of us have heard of the "Lilly Ledbetter Fair Pay Act of 2009" signed into law by President Obama on January 29, 2009. But, do employees and employers know what 'equal pay for equal work' really means? And do employers always comply with the various state and federal anti-discrimination compensation laws? Regardless of what we know about 'equal pay for equal work', the number of compensation discrimination claims is expected to rise as the result of this latest legislation, and the EEOC has confirmed that it will step up its enforcement of these claims.

Title VII of the Civil Rights Act of 1964, as amended (Title VII), prohibits employers from discriminating on the basis of race, sex, color, religion, and national origin. The Age Discrimination in Employment Act of 1967, as amended (ADEA), prohibits discrimination against employees age 40 and over based on age. The Americans With Disabilities Act of 1990 (ADA) protects qualified individuals with disabilities against discrimination in employment. The Equal pay Act of 1963, as amended (EPA), prohibits sex discrimination in the payment of wages to men and women who perform substantially equal work under similar working conditions. But, what do these laws have in common? They ALL prohibit discrimination in compensation. 'Equal pay for equal work' applies to employees of different races, colors, religions, national origins, ages, disabilities and sexes. In addition, the District of Columbia, Maryland and Virginia all have State laws which outlaw compensation discrimination.

So what's all the fuss about the "Lilly Ledbetter Fair Pay Act of 2009"?

Lilly Ledbetter sued her former employer Goodyear Tire & Rubber Company under Title VII, claiming that she was paid merit increases between 15 and 40 percent lower than similarly situated men over a span of 19 years. The case made its way to the Supreme Court which, in a 5-4 decision, held that an employee must file charges with the EEOC within 180 days (or 300 days if the claim is also covered by a state or local antidiscrimination law) of the discriminatory pay decision; or be time-barred from bringing the claim. Essentially, the Supreme Court overturned a longstanding 'paycheck accrual rule' which basically meant that each new discriminatory paycheck was considered to be a separate act of discrimination, thus triggering the 180/300-day period to file an EEOC charge, and that repeated discriminatory paycheck claims could be maintained so long as the receipt of one discriminatory paycheck fell within the time to file a charge. This was great news for employers because they were able to severely limit the available damages in compensation discrimination claims, such as backpay and compensatory damages.

Now, the tide has turned and there is great news for employees. The Supreme Court's decision has been expressly overturned by the "Lilly Ledbetter Fair Pay Act of 2009." The 'paycheck accrual rule' has been restored, and the statute of limitations restarts every time an employee receives a paycheck that is based on compensation discrimination. The "Lilly Ledbetter Fair Pay Act of 2009" now applies to discriminatory pay claims under Title VII, the ADEA, the ADA and the Rehabilitation Act of 1973.

How do employees try to prove intentional compensation discrimination under Title VII, the ADEA, and the ADA? Job similarity, not job equality controls. Do the jobs in question involve similar tasks? Do they require similar skill, effort, responsibility and working conditions? Are they similarly difficult or complex? Can the employer explain the reason for the pay disparity? Is the explanation specific? Consistent? Non-discriminatory?

Under the EPA, the methods of proof are very different than under Title VII, the ADEA and the ADA. There, the employee must show that the jobs in question require substantially equal skill, effort and responsibility, and are performed under similar working conditions. This is a higher initial burden of proof than under Title VII, the ADEA and the ADA, but the employee does not have to prove that the pay disparity is intentional.

Regardless of whether compensation discrimination falls under the EPA or Title VII, the ADEA, or the ADA, employees and employers alike should understand their rights and obligations. The 'equal pay for equal work' concept doesn't mean that the jobs in question have to be identical. It means that they must either be similar or substantially equal, depending on whether the pay discrimination is based on race, age, color, religion, national origin, disability or sex.

The contents of this Employment Alert are intended for informational purposes only and must not be considered as legal advice.

Karen A. Khan is a local attorney and litigator representing employers and employees in all areas of employment law who has represented both large corporations and individual employees alike in employment discrimination matters, and who has conducted litigation nationwide.

The Khan Law Group, PLLC is a Washington, D.C. based employment law firm representing corporate clients as well as individual employees with employment issues in Washington DC, Maryland, Virginia, and nationwide. The Group is dedicated to providing the highest calibre of personalized legal services and representation.

Contact The Khan Law Group, PLLC at 202-290-1670, for a confidential consultation.