What Did the Lilly Ledbetter Fair Pay Act Do?

The Lilly Ledbetter Fair Pay Act of 2009 changed how the filing clock works for pay discrimination claims: each paycheck affected by a past discriminatory decision counts as a new violation, restarting the deadline to file a charge. Before the Act, workers had 180 days from the original pay decision to complain, even if they had no way of knowing they were being underpaid. President Barack Obama signed the law on January 29, 2009 as his first bill in office.¹

The Supreme Court Ruling It Overturned

Lilly Ledbetter worked at Goodyear Tire & Rubber for nearly two decades before learning she had been paid significantly less than her male peers doing the same job. A jury sided with her. In 2007, the Supreme Court reversed, holding that her claim was untimely because she had not filed within 180 days of each discriminatory pay decision.² The Court treated each pay-setting decision as a standalone event, so the filing window had closed long before Ledbetter discovered the gap.

Most employees have no way to learn what coworkers earn, especially early in their careers. Pay secrecy policies and workplace norms often keep compensation hidden for years. Congress passed the Act to overrule that result.

The Paycheck Accrual Rule

The core of the Act is the paycheck accrual rule. Under 42 U.S.C. § 2000e-5(e)(3)(A), a new violation occurs each time you receive wages, benefits, or other compensation that results from a discriminatory decision.³ The filing deadline resets with every affected paycheck rather than expiring after the original decision. You don’t lose the right to challenge discriminatory pay simply because years passed before you learned about it.

The rule also applies when you first become subject to a discriminatory pay practice, such as when you transfer into a role where a biased pay structure already exists. And it applies when the effects of a past decision reach you in a new form later on. If a discriminatory base salary from years ago flows into a pension calculation, the resulting pension check triggers a new filing window. The Act treats pay discrimination as an ongoing harm that compounds over time, not a one-time event workers must catch immediately or forfeit.

Who and What the Act Covers

The Act amended several federal civil rights statutes, so the paycheck accrual rule reaches a broad set of workers:

Title VII of the Civil Rights Act of 1964, covering pay discrimination based on race, color, religion, sex, or national origin.⁴
The Age Discrimination in Employment Act, covering workers 40 and older.⁵
The Americans with Disabilities Act and the Rehabilitation Act of 1973, covering workers with disabilities.⁵

After the Supreme Court’s 2020 decision in Bostock v. Clayton County, Title VII’s ban on sex discrimination also covers sexual orientation and gender identity, and the EEOC treats pay discrimination against LGBTQ+ workers as sex-based discrimination.⁶ The paycheck accrual rule extends to those claims as well.

“Compensation” under the Act is defined broadly. It reaches wages and salary, overtime, bonuses, commissions and profit-sharing, vacation and holiday pay, insurance, pension and 401(k) contributions, stock options, and other employer-provided benefits.⁷ Employers cannot shield a discriminatory decision by routing its effects through benefits rather than base pay.

One boundary worth knowing: the Act sits alongside the Equal Pay Act of 1963, which targets sex-based wage gaps between employees doing substantially similar work. The Equal Pay Act has its own rules — you can go straight to court without first filing an EEOC charge, and you don’t have to prove your employer acted with discriminatory intent.⁸ Workers facing sex-based pay gaps may have claims under both.

How the Filing Deadline Works Now

You generally have 180 calendar days from the date of the last discriminatory paycheck to file a charge with the EEOC.⁹ The deadline extends to 300 calendar days if you live in a state or locality with its own law prohibiting the same type of employment discrimination and an agency to enforce it. Most states have such laws, so the 300-day window applies to most workers. For ADEA age claims, the extension to 300 days applies only when a state law (not just a local ordinance) prohibits age discrimination and a state agency enforces it.¹⁰

Because the accrual rule resets the clock with each affected paycheck, the deadline rarely runs out while you are still receiving discriminatory pay. The clock does start once the discriminatory payments stop, for instance after you leave the employer or move into a pay structure no longer influenced by the original decision.

What You Can Recover

The Act preserved the right to sue but placed a bound on how far back the money can reach. Back pay — the difference between what you were paid and what you should have earned — is capped at two years before the date you filed your EEOC charge, provided the discriminatory practices during that two-year window are similar to the earlier ones.⁵ The filing window stays open indefinitely during ongoing discriminatory pay, but the money recovery has a fixed look-back. Courts also expect you to take reasonable steps to limit your losses; if you were fired and did not make a reasonable effort to find comparable work, a court may reduce the award.

For intentional discrimination under Title VII or the ADA, you may also recover compensatory damages for emotional harm and other non-economic losses, and punitive damages if the employer acted with reckless disregard or malice. Federal law caps the combined total based on employer size:¹¹

15–100 employees: $50,000
101–200 employees: $100,000
201–500 employees: $200,000
More than 500 employees: $300,000

Back pay is calculated separately and is not subject to these caps.

Compensatory and punitive damages are not available for intentional age discrimination under the ADEA or intentional sex-based wage discrimination under the Equal Pay Act. Instead, you may receive liquidated damages equal to the back pay awarded, which effectively doubles the recovery.⁶ If you win, the court may also order the employer to pay your reasonable attorney fees, including expert witness fees.³

Retaliation Is a Separate Violation

Federal law makes it illegal for your employer to punish you for filing a discrimination charge, participating in an investigation, or opposing discriminatory pay practices.¹² Retaliation includes termination, demotion, pay cuts, unfavorable reassignments, or any action that would discourage a reasonable person from exercising their rights. If your employer retaliates after you raise a pay discrimination concern, that retaliation is its own violation and can support additional remedies.

1
whitehouse.gov. From the Archives: President Obama Signs the Lilly Ledbetter Fair Pay Act
2
Justia U.S. Supreme Court Center. Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007)
3
Office of the Law Revision Counsel. 42 USC 2000e-5 Enforcement Provisions
4
U.S. Equal Employment Opportunity Commission. Title VII of the Civil Rights Act of 1964
5
U.S. Equal Employment Opportunity Commission. Lilly Ledbetter Fair Pay Act of 2009
6
U.S. Equal Employment Opportunity Commission. Remedies for Employment Discrimination
7
U.S. Equal Employment Opportunity Commission. Section 10 Compensation Discrimination
8
U.S. Equal Employment Opportunity Commission. Equal Pay Act of 1963 and Lilly Ledbetter Fair Pay Act of 2009
9
U.S. Equal Employment Opportunity Commission. Time Limits for Filing a Charge
10
U.S. Equal Employment Opportunity Commission. How to File a Charge of Employment Discrimination
11
Office of the Law Revision Counsel. 42 U.S. Code 1981a – Damages in Cases of Intentional Discrimination
12
Office of the Law Revision Counsel. 42 USC 2000e-3 Other Unlawful Employment Practices