Q. Carlos, a longtime Latino employee, frequently complains that he is paid less than his white, non-Latino counterparts. He blames this pay discrepancy on a previous supervisor who allegedly denied him several promotions in the late 1990s because of his national origin. I have heard about the Ledbetter Act. Could it affect us in this case?
A. Yes, the Ledbetter Act does affect you. In addition to amending the Equal Pay Act of 1963, the Ledbetter Act specifically amends Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the ADA and the Rehabilitation Act of 1973.
As a result, the Ledbetter Act applies to a broad range of claims of discrimination in compensation, including claims based on gender, race, color, national origin, religion, age and disability, to name a few. In essence, it makes it easier for employees to file pay discrimination claims by counting every “discriminatory” paycheck as a new violation that starts the statute of limitations “clock.”
How far back can Carlos go to collect pay under the Ledbetter Act?
Q. Carlos claims that the first time his previous supervisor made a discriminatory pay decision against him was in 1997, when he denied Carlos a promotion. The job went to a more junior white employee who Carlos believes was less qualified. If Carlos sues us, will he be able to recover back pay under the Ledbetter Act from the time of the first discriminatory pay decision?
A. No. Although the Ledbetter Act would allow Carlos to sue his employer for pay discrimination based on an alleged discriminatory compensation decision made almost 11 years ago—something he could not have done before the act’s passage—it does not extend the statute of limitations.
As a result, even though Carlos can now sue his employer for a discriminatory decision that took place in 1997, he cannot recover more than the two years of back pay permitted under Title VII’s statute of limitations.
Can Carlos use the Ledbetter Act to recover vacation time he says we owe him?
Q. Carlos also complains that since 1994, when he began working here, he has steadily been denied access to paid vacation. He claims that white employees regularly have their leave requests approved, while his are denied. Thus, he says, he can’t take full advantage of all of his allotted vacation time. Does the Ledbetter Act come into play in this issue?
A. Yes. The Ledbetter Act permits the recovery of wage, benefits and “other compensation.” It clarifies that “other compensation” may include a wide range of remuneration, including paid leave, health care benefits, bonuses, stock options and pension payments (except those received after retirement).
As a result, Carlos may rightfully request payment of paid leave “owed.”
How should we go about minimizing the impact of the Ledbetter Act?
Q. What should we do to minimize our liability for pay discrimination claims under the Ledbetter Act?
A. As always, employers should act now to minimize their liability for future pay discrimination claims. To minimize liability under the Ledbetter Act, you should:
1. Review documents that address your compensation policy and make sure they accurately reflect current compensation practices.
2. Create an accurate employee database and implement a comprehensive, consistent and carefully drafted compensation policy.
3. Scrutinize the factors considered in determining an employee’s compensation.
4. Ensure you fairly and uniformly apply your compensation policy in a nondiscriminatory manner.
5. Establish and communicate clear internal complaint and appeal procedures.
6. Provide managers and supervisors with the necessary training to spot and address pay inequities.
Don’t wait for Carlos to sue before investigating his allegations. The resources spent investigating and addressing his claims today could help stave off or minimize more costly litigation in the future.
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