How the Fair Pay Act Works
The Lilly Ledbetter Fair Pay Act overturns Ledbetter and amends Title VII of the Civil Rights Act of 1964 ("Title VII"), the Age Discrimination in Employment Act ("ADEA"), the American with Disabilities Act ("ADA") and the Rehabilitation Act to clarify at which point in time discriminatory actions qualify as an "unlawful employment practice." According to the Lilly Ledbetter Fair Pay Act, unlawful conduct occurs when:
- an employer adopts a discriminatory compensation decision or other practice;
- an individual becomes subject to the decision or practice; or
- an individual is affected by application of the decision or practice, including each time compensation is paid.
As discussed in the previous section, number 3 above allows an employee to file a claim against his or her employer every time a payment is received which is based on an employer’s discriminatory pay decision. Therefore, as long as an employee files a charge within 180 days of any discriminatory payment, his or her charge will be considered timely. Additionally, employees who are victims of pay discrimination may receive up to two years of back pay.
Next, we’ll go over how employers should comply with the Fair Pay Act.