Upcoming Supreme Court ruling could open floodgates for pay-Bias lawsuits

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in Leaders & Managers,Performance Reviews

Hold onto those performance evaluations and internal memos that justify pay decisions a little longer. This is not the time to do a massive purge of employee files. Reason: An important U.S. Supreme Court case will decide how much time employees have to file charges alleging pay discrimination.

Background: When employees feel their pay has been illegally based on their race, religion, age or gender, they must first file a discrimination charge with the EEOC within 180 days of the discriminatory act (300 days if they live in a state that has an EEOC-like agency).

The question before the high court: Does the “discriminatory act” occur only when you set the person’s salary (employers’ view) or does a separate discriminatory act occur each time the employee receives a paycheck (employees’ view)?

If the employee wins in this case, anyone can sue years—or even decades—after they suffer an allegedly discriminatory pay decision, such as a lower starting salary. Look for a ruling in the next month or two. (Ledbetter v. Goodyear Tire)  

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