It’s been more than 10 years since the Lilly Ledbetter Fair Pay Act was enacted by Congress. The purpose of this 2009 law was to strengthen workers’ protection against pay discrimination based on gender, age, religion, nationality, race and disability.
In a nutshell, this law gives employees up to 180 days after their most recent paycheck to file a claim alleging unequal pay rather than 180 days from the original disparity, as Investopedia explains.
What has come out of the Lilly Ledbetter Fair Pay Act in the years since? Where does our country currently stand on pay equity? Here’s a closer look at the implications of this case and the U.S. pay gap in 2021 and beyond.
History Behind the Lilly Ledbetter Fair Pay Act
Understanding what led up to the passage of the Lilly Ledbetter Fair Pay Act of 2009 actually begins with the Equal Pay Act of 1963. Put simply, this act prohibits pay discrimination on the basis of gender between employees with “substantially equal” jobs in terms of skills, effort, responsibility and working conditions.
Lilly Ledbetter was a supervisor at the Goodyear Tire & Rubber Company back in 1979. Upon discovering she made significantly less money than her male colleagues, even new hires — up to 40 percent less, in fact — she sued the company. The Alabama District Court agreed and awarded her approximately $300,000 in backpay.
However, her employer appealed this decision until it reached the Supreme Court — which actually ruled in Goodyear’s favor because, at the time, Ledbetter had violated a technicality by not suing within 180 days of the start of the pay discrepancy. This 180-day rule was outlined under the Equal Pay Act of 1963.
Then Senator Barack Obama offered up legislation to allow employees to sue based on when they found out they’d been the victim of pay discrimination rather than the original day the pay discrimination began. He also signed this act into law shortly after becoming president.
The State of Pay Discrimination Today
Workers in the U.S. still deal with significant wage gaps based on gender and race. Specifically, white men are paid more on average than Black and Latino men, as well as women of every race and ethnicity.
In the years since the Lily Ledbetter Fair Pay Act, the Paycheck Fairness Act has been proposed multiple times to bolster the protections laid out by the Equal Pay Act of 1963 — but has so far failed to gain the needed momentum to become a law. It propositions to protect employees from retaliation for discussing wages, to boost pay transparency using data gathered from employers and to reduce the role of salary history during hiring.
Many states and cities have already individually banned the usage of salary history during hiring because it can keep intact pay discrimination employees experienced in previous roles rather than assigning compensation based on skills. According to data from Harvard Business Review, salary history bands have increased pay for Black new job hires by 13 percent and for women by 8 percent. This is one concrete step companies today can take when trying to design nondiscriminatory hiring and employment practices.
Another new development is enterprises auditing their own practices, seeking out opportunities to shore up their hiring, training and payroll practices. In the vein of greater transparency, many organizations are taking a close look at their own processes and trying to proactively correct discrepancies within roles and teams. Many experts argue that this greater transparency fuels positive outcomes like a more positive company culture, greater employee satisfaction and reduced risk of lawsuit — among other potential benefits.
The Lilly Ledbetter Fair Pay Act undoubtedly built upon the protections laid out by the Equal Pay Act of 1963, but is far from the final frontier in the fight for pay equity for all.