Washington D.C. Employment Law Update
EEOC Updates Compliance Manual to Conform with Lilly Ledbetter Fair Pay Act
The Equal Employment Opportunity Commission (EEOC) has revised a portion of its Compliance Manual addressing the timeliness of filing pay discrimination claims in light of the Lilly Ledbetter Fair Pay Act, which was enacted on January 29 of this year. This law overturned the Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., 550 U.S. 618 (2007), which required plaintiffs to file a charge of compensation discrimination within 180 days (300 in jurisdictions that have a local or state law prohibiting the same form of pay discrimination) of the discriminatory act or decision. The new law reinstates the “paycheck rule,” which allows courts to consider the receipt of a paycheck or other benefits stemming from the initial discriminatory pay decision to constitute a separate discriminatory act for statute of limitations purposes. The revised Compliance Manual reflects this shift in section 2-IV C.4, Compensation Discrimination, by stating that the period for submitting a claim of pay discrimination under Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), the Rehabilitation Act or the Age Discrimination in Employment Act (ADEA) begins when any of the following situations occur:
- the employer adopts a discriminatory compensation decision or other discriminatory practice affecting compensation;
- the charging party becomes subject to a discriminatory compensation decision or other discriminatory practice affecting compensation; or
- the charging party’s compensation is affected by application of a discriminatory compensation decision or other discriminatory practice, including each time wages, benefits, or other compensation is paid, resulting in whole or part from such discriminatory decision or practice.
This section also explains that although these time frames apply to all forms of compensation, including the payment of pension benefits, the Ledbetter Act was not intended to change the method for calculating when pension distributions are considered paid. Therefore, if an individual intends to file a discrimination claim based on pension benefits, the Compliance Manual advises the claimant to file a charge within 180/300 days of retirement, as pension benefits are considered paid “upon entering retirement and not upon issuance of each annuity check.”
This new section provides the following example of an actionable claim:
After working for the Respondent for nearly 10 years as a production supervisor, CP learns she is being paid less than the other four production supervisors in her department, who are all men. Immediately after learning about the pay discrepancy, CP files an EEOC charge alleging sex-based wage discrimination in violation of Title VII. The investigation shows that CP generally received lower pay raises than her male counterparts as the result of lower performance ratings, which CP alleges to have been discriminatory. Although these performance ratings and related pay raises all occurred more than 300 days before CP filed her charge, they affected her pay within the filing period. Therefore, CP’s pay discrimination charge is timely.
The Ledbetter Act is retroactive to May 28, 2007, and applies to all claims of compensation discrimination pending on or after that date.