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Lilly Ledbetter Fair Pay Act




Full Interview transcript

Carl: Hello business owners this is Carl Kleimann from Odyssey OneSource with a Business Survival Tip. The first piece of legislation passed by President Obama was the Lilly Ledbetter Fair Pay Act. For those of you not familiar with this, the Lilly Ledbetter Fair Pay Act essentially reverses the Supreme Court decision by resetting the statute of limitations with each discriminatory paycheck. Obviously, this greatly expands the timeframe for making gender based claims of discriminatory pay. In many cases, discriminatory pay occurs without any malicious intent but rather happens unknowingly over time. Many small businesses lack a formal compensation policy, and those that have one, don't always ensure adherence by managers. Don't let this happen to you.

Consider this, your company hired a female employee 10 years ago and since that time, has hired and promoted numerous employees of varying skill, experience and education levels. After 10 years, she files a claim alleging pay discrimination dating back to the date of hire. This claim is now allowed as long as one or more paychecks within the last 180 days reflects the alleged discriminatory pay practice. In order to assert a viable defense, you will likely be required to produce documents dating all the way back to the date of hire.

So what should you do in response to the new Lilly Ledbetter Fair Pay Act. I recommend the following: First, take time to develop a pay policy or review your current policy relating to starting pay, promotional pay increases, and merit pay increases to ensure equality. Second, maintain all records that support your compensation and promotion decisions. Ledbetter suggests the need for very long record retention policies. And finally, conduct a statistical self audit by analyzing the starting pay, promotional pay increases, and merit pay increases that your firm has made over the past two years. Identify possible patterns of discrimination. Never before have we seen such dramatic change to labor policy in such a short period of time.

I am Carl Kleimann and this has been another Business Survival Tip by Odyssey OneSource, ranked as the number one Professional Employer Organization two years running by the Black Book of Outsourcing.

For more information on this and other issues affecting employers, please visit odysseyonesource.com.


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