Is Compensation Discrimination Amendment Needed? (Fair Pay Act, Part 2 of 2)
Last week, in Part 1 of this series, I discussed the Supreme Court’s Ledbetter decision and the criticism of it that led to the introduction of corrective legislation in the form of the Fair Pay Act.
(That Act was blocked by Republicans in the Senate, but is likely to be reintroduced if the political balance shifts significantly this fall.)
Today, in Part 2, I’ll cover some reasons why I believe the impact of Ledbetter on employees is not as harsh as critics claim, and why compensation discrimination is not as different from other types of job discrimination as they claim.
First, let’s look at some of the inherent limitations of the reach of Ledbetter.
The “Loopholes”
The urgency of legislative change is diminished when the following points are all considered (quoting the “Hot Topic” publication about the Ledbetter case by the American Bar Association’s Section of Labor and Employment Law.
The Court’s ruling does not doom all compensation discrimination cases in which the plaintiffs have received unfairly low pay for more than 180 days. The majority explicitly limited its holding to “disparate-treatment pay cases,” excluding disparate impact claims from its coverage.
The majority also distinguished cases involving discriminatory “pay structures,” as opposed to individualized compensation decisions.
These limitations suggest that this ruling need not affect many class-wide pay disparity cases.
An interesting passage from Ledbetter is the one referred to above mentioning discriminatory “pay structures”:
[An] employer violates Title VII and triggers a new EEOC charging period whenever the employer issues paychecks using a discriminatory pay structure.
But a new Title VII violation does not occur and a new charging period is not triggered when an employer issues paychecks pursuant to a system that is “facially nondiscriminatory and neutrally applied.” . . .
The fact that precharging period discrimination adversely affects the calculation of a neutral factor (like seniority) that is used in determining future pay does not mean that each new paycheck constitutes a new violation and restarts the EEOC charging period.
This makes the following a critical question:
What is a “pay structure” and when does it become discriminatory?
Perhaps a “pay structure” is the aggregate distribution of pay rates for a particular job or set of jobs.
And perhaps a structure “becomes” discriminatory if management becomes aware of an apparent inequity along the lines of gender or race and fails to remedy it.
At this point, arguably, the system can no longer be said to be “facially nondiscriminatory and neutrally applied.” There might be case to be made that it was discriminatorily applied, intentionally, from that point forward.
So perhaps bringing an old, otherwise time-barred inequity to the employer’s attention could, in a certain sense, revive the claim.Another important issue was well summarized by a reader’s comment on another blog post: Read the rest of this entry »
May 5, 2008 George Lenard
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