We knew that HR law would change with a Democratic Congress and administration. Well, the changes have begun.  President Obama has signed the Lilly Ledbetter Fair Pay Act into law. The law overrules the 2007 Supreme Court decision of Ledbetter v. Goodyear Tire & Rubber Company, Inc., making it easier for employees to bring discrimination cases by allowing them more time to do so. The Act effectively increases the statute of limitations (or deadline) for filing federal pay discrimination claims, including those under Title VII, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA) and the Rehabilitation Act. The Supreme Court had said that an employee must file a discrimination claim within 300/180 days of the company’s initial act of pay discrimination. Supporters of the Ledbetter law have argued that employees may not even be aware that pay discrimination has occurred until years later and so would be essentially foreclosed from taking legal action.

Under the new law, basically every new discriminatory act (e.g., a new paycheck that was affected by past discrimination) would extend the deadline for filing a claim. The result is that employers could be liable for pay decisions made years earlier. Under the new law, discrimination in compensation occurs when:

1. A discriminatory compensation decision is made or practice adopted. (Current law)
2. An individual becomes subject to a discriminatory compensation decision or practice, or
3. An individual is affected by the discriminatory compensation or practice, including each time wages, benefits, or other compensation is paid. (This part of the law will have the greatest impact and could reach discriminatory acts that occurred years ago.)

Now what?  You could take a positive view and think that “more employment law” simply contributes to the full employment of HR managers and staff. But realistically you may not be buying that argument. Instead, you likely will want to take a closer look at your HR practices to better manage the risks of pay discrimination claims.   This will include ensuring that your comp and benefits actions are well documented and records possibly retained for longer periods, maintaining a sound salary structure and pay policies, training managers regarding pay discrimination issues, employing a good appraisal system so that merit pay decisions can be made as objectively as possible, and conducting regular audits of compensation and benefits programs. Without solid HR practices, it’s easy for even the most well intentioned organizations to have pay equity problems.