Small Business Alert: Ledbetter Act And Changes to Wage Discrimination Laws
Published on February 3, 2009 by john
Large corporations have staffs of attorneys and human resource professionals that keep them abreast of the changes in Federal law that affect wage discrimination: this post will not be news to them. If you spend more time running a business than reading the federal digests and White House press releases, pay attention. It has always been illegal to pay workers different pay rates in a manner that discriminates against protected classes such as women or minorities. The law also has a 180 day statute of limitations. According to the U.S. Supreme Court in 2007, this means that from the FIRST discriminatory paycheck the individual must bring a suit within 180 days or their claim will be barred. The new law, signed by the President today, changes that statute of limitation. It renews the 180 day period to bring suit EVERY TIME the company pays a potentially discriminatory paycheck. This means that if the discriminatory pay goes on for 30 years, the worker could bring suit for the past 30 years of discriminatory pay within 180 days of the most recent paycheck. This is a MAJOR change for business.
What should you do? You must institute a system whereby your pay is based upon qualification, seniority, documented performance reviews, or other non-discriminatory basis. Documentation is key. Other things your business should do today is: 1. Run the numbers on all employees' compensation packages, including starting pay, merit raises, cost of living increases and benefits. Individuals who perform the same jobs and have the same qualifications should be paid at the same rates. 2. Ensure there are demonstrable business reasons for any disparities in compensation. 3. Train supervisors who have input into hiring, firing, disciplining and promoting workers on what the law requires. 4. Review and update employment policies and handbooks to emphasize that discriminatory compensation practices and decisions are strictly prohibited. 5. Conduct exit interviews when supervisors leave the company, focusing on whether any protected characteristic were considered when they made pay decisions. 6. Ensure that employees who question pay practices or file claims of discriminatory practices are not retaliated against. 7. Make sure performance evaluations are completed accurately and in a timely manner. That documentation can subsequently be used to support compensation decisions on promotions, raises and bonuses. 8. Indefinitely retain copies of all payroll records and performance reviews. 9. Review liability insurance policies to ensure that claims from ex-employees regarding incidents long past are covered. Make changes in coverage if necessary.
This is not an exhaustive list of actions that should be taken to protect your business. Each business is different and operates in a different competitve environment. If you have any questions regarding your obligations as an employer, please call us today to see if our firm can be of service to you. Contact the owner of the firm directly at John@JohnHGraves.com.