Update: President Obama signed the Ledbetter Fair Pay Act into law.
Latest newsline article on Ledbetter Fair Pay Act.
The Ledbetter Fair Pay Act (H.R. 11/S.R. 181) is an extreme piece of legislation that would effectively eliminate the statue of limitations from employment discrimination claims.
The consequences of H.R. 11/S.R. 181 are massive and would result in countless claims being filed based on alleged acts that could have occurred decades ago, well after memories have faded, documents and witnesses have disappeared and businesses that have changed hands or no longer exist.
Bottom Line
The Ledbetter legislation is promoted as a narrowly tailored response to the Supreme Court’s Ledbetter decision from May 2007.
Unfortunately, H.R. 11/S.R. 181 is an extreme piece of legislation that would effectively eliminate the statute of limitations from employment discrimination claims by making each paycheck (or pension check) an act of discrimination.
“Paycheck Rule” Eliminates Statute of Limitations
• The current statute of limitations for filing a workplace discrimination complaint is 180 or 300 days (depending on state law) from the time that the act of discrimination takes place.
• Statutes of limitation are intended to achieve balance in our legal system by promoting prompt reporting and resolution of alleged illegal activities.
• The statute of limitations protects all parties involved by encouraging employees to file a claim while the evidence is fresh. When discrimination is proven, employers can act quickly to remedy the situation to prevent further acts.
• H.R. 11/S.R. 181 would institute an unproven “paycheck rule” that would count each paycheck as an act of discrimination.
• The “paycheck rule” would re-start the clock on the statute of limitations every time an employee is paid. This effectively eliminates any statute of limitation and invites affected parties to sleep on their rights and compound potential compensatory awards.
• An employee could wait until they had taken a new job or retired to file a discrimination claim.
• The “paycheck rule” could also apply to pensions or annuities, or any form of workplace benefit that is based is considered compensation for work performed.
A Trial Lawyer’s Dream and a Small Business Killer
Each year brings new retirements from the Baby Boom generation and the broad scope of H.R. 11/S.R. 181 would open the door for a flood of litigation from pension recipients.
Claims would be filed based on acts that allegedly occurred decades ago, potentially against businesses that have changed hands or no longer exist.
Unprecedented Scope of H.R. 11/S.R. 181 Destroys Over 40 Years of Balanced Employment Rules
H.R. 11/S.R. 181 expands the class of people who may file a claim of discrimination by applying the statute to “affected individuals.” Courts have long held that only those individuals with an employee relationship to the employer could file a claim. The proposed legislation would allow claims to be filed by spouses, children, and other individuals who might be “affected” by an alleged discriminatory act.
Update: Friday, January 9th the Paycheck Fairness Act passed in the House with a record vote of 256-163.
- The Paycheck Fairness Act (H.R. 12/S.R. 182) would make unlimited punitive and compensatory damages available for violations of the Equal Pay Act (EPA). Appropriate remedies for intentional discrimination, including punitive and compensatory damages, are available under Title VII of the Civil Rights Act of 1964.
- It includes changes to the Equal Pay Act that would make it easier to file large class actions against employers and tom make it more difficult for employers to justify legitimate pay disparities. It would also force the Labor Department to return to debunked statistical models and inaccurate survey tools in an effort to enforce civil rights laws among federal contractors.