New Federal Law Could Significantly Increase Employee Remedies for Discrimination

A bill signed into law this year by President Obama signifies a major change in the rights of employees. The bill will apply to all compensation related lawsuits. However, it will limit the availability of compensation for back pay to two years.

The new law was crafted in the wake of a United States Supreme Court decision which held that suits are not permitted under Title VII of the Civil Rights Act, if the suit is filed after more than 180 days.

The new law states that the time period will begin to run as soon as the employee receives his first paycheck. However, a new time period will begin to run with each subsequent paycheck.

In addition, the new law applies to all “compensation decision[s] or other practice[s].” This means that the new time periods could potentially allow plaintiffs to file suit over discriminatory practices that resulted years ago. The theory is that had the promotion been granted, the current paychecks would be much larger than they are currently.

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