By Nura Sediqe

Pay discrimination is not a new issue for employees of color. The current economic devastation, combined with ongoing racial disparities in salary and employment income, present harder, more painful challenges. Now more that ever, the consequences of pay discrimination have the potential to be much more serious and enduring.

Last week, as one of his first official acts, President Obama signed into law the Lilly Ledbetter Fair Pay Act, which restores the ability of employees to challenge pay discrimination. African Americans, women and others protected by fair employment laws can once more be assured the right to challenge pay discrimination in the workplace under federal law.

This legislation overturns a 2007 decision by the U.S. Supreme Court, Ledbetter v. Goodyear Tire and Rubber Co., 127 S.Ct. 2162 (2007). That earlier ruling reversed a longstanding interpretation of fair employment laws by holding that discrimination claims must be filed immediately after the decision to discriminate is made, rather than when the employee learns of the pay discrepancy.

A jury had awarded Lilly Ledbetter $3.3 million in damages for gender discrimination she suffered at a Goodyear Plant in Alabama. But the Court overturned the award because Ledbetter had not complained when the pay decision was made, even though she did not learn of the pay discrepancy until years later.

Under the new law, each discriminatory paycheck constitutes a new act of discrimination actionable under the law. Accordingly, the law ensures that employees, who often do not have access to comparable salary information, can challenge discrimination as long as they continue to be impacted by it.

While Lilly Ledbetter’s case involved gender discrimination, the new law applies to all persons protected by fair employment laws, including communities of color. This is important, given that wage disparities are exacerbated in times of economic crisis.

In 1995, the median income of African-American families was just 60.9% of that of white families. By 2000, when the unemployment rate fell to 4.0%, the ratio improved to 63.5%, the highest level on record. But by 2004, as the economy deteriorated , African-American families had a median income that was 62% of a typical white family’s. Until favorable labor market conditions return, racial income gaps are likely to widen.

Other statistics show the prevalence of the wage gap based on race. African-American men earn 75 cents, and Hispanic men earn 63 cents to every dollar earned by white men.

The situation is even worse for women of color; with African-American women earning just 69 cents to every dollar earned by white men. For Latino women, that figure drops to a mere 59 cents per dollar.

At the White House ceremony for the bill signing, President Obama noted the significance: “I intend to send a clear message: That making our economy work means making sure it works for everyone. That there are no second-class citizens in our workplaces, and that its not just unfair and illegal – but bad for business – to pay someone less because of their gender, age, race, ethnicity, religion or disability…Equal pay isn’t just an economic issue for millions of Americans and their families, it’s a question of who we are – and whether we’re truly living up to our fundamental ideals.”

The signing of the bill was symbolic for another reason. The Lilly Ledbetter Fair Pay Act was the first piece of legislation to be signed by President Obama. Ledbetter herself stood in a prominent place beside the President’s chair as he signed the measure, and was embraced by her when he finished.

Obama stated, “It is fitting that with the very first bill I sign … we are upholding one of this nation’s first principles: that we are all created equal and each deserve a chance to pursue our own version of happiness.”

Leslie Proll, Director of LDF’s Washington Office, witnessed this historic event at the White House. “As a civil rights organization keenly aware of the pervasiveness of pay discrimination, we could not be more pleased. Congress did the right thing by restoring this protection for workers, and Obama elevated its importance by making it his first law. We are off to a wonderful start in terms of civil rights progress,” Proll said.

Ledbetter’s case is over and she will never receive the additional pay she deserves. But at the reception following the President’s formal action, she said, “There will be a far richer reward if we secure fair pay for our children and grandchildren, so that no one will ever again experience the discrimination that I did.”

Visit the White House Blog for President Obama’s Remarks Upon Signing the Lilly Ledbetter Bill

Nura Sediqe is Research Director for the NAACP Legal Defense & Educational Fund, Inc.

Sources:

• Bernstein, Jared, “Economic Snapshot: Weaker Job Market Re-opens Racial Income Gap,” Economic Policy Institute (Jul 5, 2006).
• U.S. Census Bureau, Current Population Survey, 2005 Annual Social and Economic Supplement.
• Fact Sheet: Obtaining Equal Pay and Job Opportunities, National Women’s Law Center.