Until recently, Congress remained relatively dormant in its effort to fight employment discrimination. Its last major effort was the Civil Rights Act of 1964, a “legislative landmark” that was enacted to combat discrimination in employment, courts, schools, public facilities and accommodations, and voter registration. To fight employment discrimination, Congress established the Equal Employment Opportunity Commission (EEOC) to enforce certain protections in the workplace. Title VII of the Act prohibits employment discrimination based on color, race, religion, sex and national origin. But since 1964, Congress has been relatively inactive in enacting updated legislation to fight discrimination in the workplace. That was until Lily Ledbetter came along.
In 1979, when Ms. Ledbetter was hired to work at the Goodyear Tire and Rubber Company in Alabama, she was earning the same salary as the male plant workers. By the time Ms. Ledbetter retired in 1998, however, the wages she was earning were significantly lower than that of her male co-workers. She took her case to Court which held that Ms. Ledbetter’s claim was barred because its statute of limitations had run. Ledbetter v. Goodyear Tire & rubber Co., 550 U.S. 618 (2007).
Congress disagreed with the Court’s interpretation, however, and overturned its decision. It enacted the Lily Ledbetter Act which holds employers liable for compensation discrimination at the time when employers adopt discriminatory practices in the workplace and also when employees are affected by such practices, “including each time wages, benefits, or other compensation is paid.” The effect the Ledbetter Act has is that each time wages are paid to workers, a new statute of limitations begins to run that enables employees to bring claims of wage discrimination. What this effectively means for companies in the U.S. is that they must be able to articulate valid reasons for any pay disparity that may exist among co-workers or otherwise face actions and possible sanctions for employment discrimination.
From its recent actions, it does not appear that Congress will again become dormant in fighting the evils of discrimination in our society. Currently pending in Congress is the Employment Non-Discrimination Act of 2009 (ENDA). If this Act is passed by Congress and then signed by President Obama, it would add protections that many states already have in place. The Non-Discrimination Act would make it illegal for employers to discriminate against employees based on sexual orientation and gender identity. What the Act does not do is require that employers extend spousal benefits to same-sex couples. In effect, this means that employers are not required to treat unmarried couples similar to married couples.
In addition to ENDA, Congress is also considering the Paycheck Fairness Act (PFA). This Act would basically require that when employers face an action of wage discrimination, they would have to prove that any wage discrepancy amongst male and female counterparts is 1) not based or derived from sex-based differential in compensation; 2) job-related to the position in question; 3) and consistent with business necessity.
So what is the lesson to be learned from these recent changes in employment legislation?
Companies should be diligent in reviewing their compensation structures to identify pay discrepancies that may be present amongst their employees. If pay discrepancies do exist, companies must be prepared to articulate non-discriminatory reasons for the differences in pay.
To find out how we can help your company understand and comply with these and other laws, please call us at 407-647-7887 or email us at email@example.com.