President Barack Obama signed the Lilly Ledbetter Fair Pay Act into law. Here’s what it means to HR.

The law is retroactive to May 28, 2007, the date of the Ledbetter decision, which means that it will apply to all claims of pay discrimination pending on or after that date.

Summary of the law
The Fair Pay Act, S. 181, alters statute of limitations for pay discrimination claims. It also overrules the U. S. Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Company, Inc.  Congress believed the High Court, in Ledbetter, unduly restricted the time period for bringing pay discrimination claims. The new law will will extend the shelf life of claims employees make against their employers.

Under the new law, an unlawful employment practice occurs when:

• the discriminatory pay decision is made
• an individual becomes subject to the discriminatory pay decision, or
• “an individual” (see below) is affected by the discriminatory compensation decision or other practice” — meaning that the deadline for filing a claim starts anew each time an employee receives wages, benefits, or other compensation tainted by the discriminatory pay decision, and may go back as far as two years from the date a charge was filed with the Equal Employment Opportunity Commission.

Broad application of ‘individual’ and ‘payment’
The language of the law also could be interpreted expansively to permit pay discrimination charges to be filed by individuals other than employees, so long as those individuals claim they have been affected by the discriminatory decision. The House rejected proposed amendments that would have clarified that the law applies only to employees.
Additionally, the new law is not limited to discriminatory wage or salary payments; it also applies to payments made under benefit plans, such as pension plans. That means, for instance, retired employees who receive pension payments may bring claims years after their pension plan went into effect.

What to do
You may want to consider

• the length of time you retain compensation and benefits records, and
• a review of your compensation and benefits practices to ensure there are no glitches that could have the appearance of discrimination.