The Obama administration is turning up the heat on employers to eliminate pay disparity in the workplace by:
- Passing the Lilly Ledbetter Fair Pay Act which states that a discriminatory act occurs "each time wages, benefits, or other compensation is paid" that is the result of a discriminatory pay practice, thus expanding the time during which current or former employees can file an action for discrimination.
- Establishing the National Equal Pay Task Force to coordinate the efforts of the EEOC, the Department of Labor, and the OFCCP (for federal contractors) to increase equal pay investigations and enforcement activities;
- Substantially increasing the budgets of these enforcement agencies in order to add investigators and related positions; and
- Modifying the method used by these agencies to evaluate compensation practices.
These actions have resulted in increased scrutiny by the DOL, the EEOC, and the OFCCP aimed at identifying discriminatory pay practices and imposing significant liability on employers.
In light of this increased enforcement activity and the resulting potential liability, employers should prepare to demonstrate equal pay compliance by:
- Evaluating compensation at least annually in order to identify individual and systemic disparity;
- Correcting all identified disparities and documenting the correction;
- Modifying the compensation system to avoid disparities; and
- Revising record retention policies to be able to defend pay practices during the extended limitation periods mandated by the Lilly Ledbetter Act.
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