Employers Should Review Compensation & Recordkeeping Policies to Prevent Liability Under the Lilly Ledbetter Fair Pay Act

Ten Dollar bills

The Lilly Ledbetter Fair Pay Act of 2009 eliminates the 180-day statute of limitations for filing an equal pay claim, and clarifies that a discriminatory compensation decision occurs each time a discriminatory paycheck is issued.

Some common sense steps will allow you to avoid discriminatory compensation violations by ensuring fairness of compensation levels and adequacy of documentation.

Recommended Practices for Avoiding Discriminatory Pay Liability Under Ledbetter Act

To protect themselves under the Ledbetter Fair Pay Act, employers should:

  1. Ensure you have policies and procedures for documenting the reasons for all compensation decisions.
  2. Retain documents and data supporting all pay decisions indefinitely. You never know when an equal pay claim may arise, and now they can be based on events long ago, beyond the scope of staff members’ knowledge or memories.
  3. Conduct periodic self-audits to make sure you can explain differences in pay between employees, and make any necessary adjustments.
  4. Review past compensation decisions to determine if discriminatory decision-making has occurred, and correct any resulting inequities in current compensation levels.
  5. When hiring new employees, analyze the compensation packages of all current employees in the same position, to make sure the candidate does not receive a significantly better package just to get him or her in the door.
  6. Keep in mind that discriminatory performance reviews may also be actionable under the Act, because performance reviews are often the basis for compensation decisions.

With such changes to recordkeeping systems and periodic compensation reviews, employers can eliminate any discriminatory pay disparities in the workplace and reduce liability under the Ledbetter Act.

Categorized: Uncategorized
If you enjoyed this post, please leave a comment below or subscribe or send this page to a friend
LexisNewis, Martindale-Hubbell, Peer Review Rated for Ethical Standards and Legal Ability