What Is the Lilly Ledbetter Fair Pay Act?

The Lilly Ledbetter Fair Pay Act is a law enacted by Congress on Jan. 29, 2009, that bolstered worker protections against pay discrimination. The act allows individuals who face pay discrimination to seek rectification under federal anti-discrimination laws. The law clarifies that discrimination based on age, religion, national origin, race, sex, and disability will "accrue" every time the employee receives a paycheck that is deemed discriminatory.

Lilly Ledbetter Fair Pay Act Explained

The act is named after a production supervisor at a Goodyear tire manufacturing plant in Alabama who filed a lawsuit in 1998 stating that her pay reflected sex discrimination. Ledbetter's appeal was eventually rejected by the Supreme Court, but the ruling ignited activist groups who saw the court's decision as a setback for women and civil rights. This led to the creation of a bill that bore Ledbetter's name.

Lilly Ledbetter Fair Pay Act and Income Equality

One documented area of pay discrimination is the pay gap between men and women. As of 2017, it was estimated that on average, women are paid only 78 cents for each dollar men are paid for comparable work. The gap becomes wider when examining pay data for women of color, who get 65 cents on the white male dollar, and Hispanic women, who earn 58 cents on the dollar, according to the National Women's Law Center. The Lilly Ledbetter Fair Pay Act was considered a positive step in advancing the fair treatment of workers.

Lilly Ledbetter Fair Pay Act: How it Works

After an Equal Employment Opportunity Commission (EEOC) complaint, Ledbetter filed an equal-pay lawsuit alleging pay discrimination under Title VII of the Civil Rights Act of 1964. At trial, the jury awarded her back pay and about $3.3 million in compensatory and punitive damages. But the Supreme Court upheld a lower court ruling that claims like Ledbetter’s had to be filed within 180 days of an employer’s decision to pay a worker less, even if the worker didn’t learn about the unfair pay until much later. Ledbetter never collected any kind of settlement from Goodyear.

The Lilly Ledbetter Fair Pay Act gives employees the right to file suit 180 days after the last pay violation and not only 180 days after the initial pay disparity. In effect, each paycheck restarts the 180-day countdown to file a claim.

Many experts believe that the practice by which prospective employers ask job candidates about salary history furthers the pay gap. As of early 2018, nine states (as well as eight localities) prohibited employers from asking about salary history. They include California, Illinois, Michigan, Massachusetts, New Jersey, New York, Connecticut, Oregon, and Pennsylvania.