New equal pay legislation –
Employer exposure increases |
President Obama signed his first bill into law,
the Lilly Ledbetter Fair Pay Act of 2009, on
Jan. 29. The law is named after Ms. Ledbetter, a
woman who filed a lawsuit against her employer,
Goodyear Tire and Rubber Company, for pay
discrimination. The court found Goodyear guilty
of pay discrimination, but later the Supreme
Court dismissed the case since it was filed
outside the statue of limitations. The Supreme
Court ruled the lawsuit must have been filed
within 180 days from the date of the first
discriminatory payment.
The new law relaxes the statue of limitations by
restarting the 180-day period for filing a pay
discrimination lawsuit every time the employer
issues discriminatory compensation such as a
paycheck, regardless of when the discrimination
started. All discriminatory compensation claims
pending on or after May 27, 2007 are subject to
the new legislation.
Pay discrimination lawsuits are expected to rise
as filing a lawsuit is now easier. In addition,
defense costs and settlement values could
increase. Since the statue of limitations has
been relaxed, many employers need to use
alternative ways to defend themselves in pay
discrimination lawsuits. All employers should
maintain detailed documentation on payroll
information. Written procedures for setting and
reviewing pay decisions should be strictly
followed. Employee files should include:
starting pay, promotional pay, merit raises and
explanations for the increases.
As a premier provider, Avalon continues to
inform our clients on changes in the legal
environment and offers protection to help reduce
new exposures. Together with premier insurers,
we provide
Employment Practices Liability Insurance:
coverage and defense for allegations of
discrimination, sexual harassment, retaliation,
unfair hiring practices and other work-place
torts made by employees. With employee disputes
accounting for almost 75 percent of claims
against businesses and discrimination claims
expected to increase, Employment Practices
Liability Insurance is becoming a necessary
element of risk management programs.
Avalon can provide Employment Practices
Liability as a stand alone policy or as part of
our Executive Risk Protection program, which
includes: Directors & Officers, Fiduciary
Insurance, Internet Liability and Crime
Insurance. |
For more information, please contact your
local Avalon office or
Anna Vize, Product
Manager at (847) 700-8154 or at
avize@avalonrisk.com.
A list of our eleven North American offices can
be found at
www.avalonrisk.com. |
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