EEOC¿s Compliance Manual Revised with Regard to Time Limitations for Charges Alleging Compensation Discrimination

In August 2009, the EEOC’s Compliance Manual was revised with regard to the time limitations for filing charges alleging compensation discrimination.  These revisions were necessary to clarify the statute of limitations established in the Lilly Ledbetter Fair Pay Act of 2009.  Employers need to understand how the Ledbetter Act affects statute of limitation issues in order to ensure that any pay equity audits are sufficient in scope.  Employers should also understand the implications of the Ledbetter Act when reviewing their document retention policies.

Under the Ledbetter Act, an individual can bring a charge up to 180/300 days after receiving compensation that is affected by a discriminatory compensation decision or other discriminatory practice, regardless of when the discrimination began.  A charge must be filed with EEOC within 180 days from the date of the alleged violation, in order to protect the charging party's rights.

This 180-day filing deadline may be extended to 300 days if the charge also is covered by a state or local anti-discrimination law.  For example, an employee may challenge any paycheck that is lower than it otherwise should have been because of a discriminatory denial of a promotion within 180/300 days of the paycheck, even if the denial of the promotion was several years prior.  This Act substantially changes how the statute of limitations for unfair pay is calculated.

This new method of calculating the statute of limitations is now addressed by the Revised Compliance Manual.  Subsection § 2-IV C.4, entitled "Compensation Discrimination,” explains the changes to time limitations after the passage of the Lilly Ledbetter Fair Pay Act of 2009.  According to the revised Manual, if a charge alleges compensation discrimination under Title VII, the ADA, the Rehabilitation Act, or the ADEA, the filing period begins when any of the following occurs:

1) the employer adopts a discriminatory compensation decision or other practice affecting compensation;

2) the charging party becomes subject to a discriminatory compensation decision or other practice affecting compensation; or

3) the charging party’s compensation is affected by application of a discriminatory compensation decision or other practice. 

This includes each time wages, benefits, or other compensation is paid, resulting in whole or part from such discriminatory decision or practice.