U.S. EEOC Revises Compliance Manual on Compensation Discrimination
By now I suspect you have read or heard that on January 29th of this year President Obama signed into law the Lilly Ledbetter Fair Pay Act. The new law effectively removed the existing statute of limitations (180 or 300 days) for filing wage discrimination charges under a number of federal anti-discrimination laws. So today, an employee could file a charge against your company for a compensation-related decision it made 20 or more years ago. How or why? The rationale is one of a continuing-paycheck rule. The idea is that each and every paycheck you have issued to the employee since the date of the alleged discriminatory decision has constituted yet another act of discrimination. As a result, the proverbial clock for filing a charge restarts, if you will, with each paycheck.
In response to the new law, the U.S. EEOC recently published a revised Compliance Manual used by its field investigators. Section 4 of the Manual addresses compensation discrimination. Here are some highlights employers should consider:
• the 180 or 300-day period for filing a charge begins, "...each time wages, benefits, or other compensation is paid, resulting in whole or part from [a] discriminatory decision or practice;"
• covered compensation includes, "...all forms of compensation, including the payment of pension benefits;"
• unlike filing a charge related to the payment of wages, if a person wishes to file a claim related to pension benefits, the clock begins to run "...upon entering retirement and not upon issuance of each annuity check."
TIPS?
• Employers are generally required to retain wage and payroll records for three years from the date of creation. In light of Ledbetter, you may want to seek guidance from your corporate attorney regarding the length of time you should now retain these records.
• The Ledbetter case and this new law are reminders that it is a proactive practice to monitor your wage rates for individuals performing the same work and ensure there is no statistically significant difference in pay based on gender, race or any other legally protected status.
[PRINTER FRIENDLY VERSION]
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