New Due Diligence under Ledbetter Fair Pay Act

Since the Ledbetter Fair Pay Act release, when buying or merging with a new company, companies will have to add new step in their due diligence. Under the law, employees can sue for wage discrimination.

Now, the U.S. Senate has passed the Lilly Ledbetter Fair Pay Act of 2009, and President Obama has signed it into law. According to the new act, it allows for discrimination suits beyond the old 180-day deadline. This means that employers must retain records on the basis of compensation decisions far longer for defending against a possible lawsuit.

According to President, he intended “to send a clear message” by signing the bill: “That there are no second class citizens in our workplaces, and that it’s not just unfair and illegal – it’s bad for business – to pay someone less because of their gender, or their age, race, ethnicity, religion, or disability.” It was the first bill the new President signed following his January 20 inauguration.

However, the act is opposed by both the U.S. Chamber of Commerce and the Society for Human Resource Management (SHRM).