Third Time’s the Charm: California’s Proposals to Expand its Equal Pay Protections . . . Again

With amendments to the California Fair Pay Act (“CFPA”) in effect for less than six months, the state legislature has introduced three new bills to further expand the state’s equal pay laws.

Past Salary History Inquiries Prohibited. Once again, the state legislature has proposed a bill to prohibit employers from seeking salary history from applicants.  The proposed bill also would require private employers to provide the pay scale for a position, upon an applicant’s request.  Assembly Bill (AB) 168 is the third attempt by the legislature to pass a bill addressing requests for salary history.

In 2015, AB 1017 was vetoed by Governor Jerry Brown. At the time, Governor Brown said AB 1017 would prohibit employers “from obtaining relevant information with little evidence that this would assure more equitable wages.”  Governor Brown wanted to give the CFPA “a chance to work before making further changes.”  The next year, the legislature revised AB 1676 before it reached the governor.  The legislature removed the ban on asking for salary history and instead included a perhaps more palatable requirement that salary history shall not, by itself, justify any wage differential.

This time around, Democrats control both the California State Senate and Assembly. More importantly, Democrats have gained a supermajority which means they can vote to override any bills vetoed by Governor Brown.  Thus, this may be the year that California joins other jurisdictions like Massachusetts, Puerto Rico, and New York City, and passes a law to prohibit employers from asking for applicants’ salary history.

Gender Pay Differential Reporting Requirement. The second proposed bill, AB 1209, would require employers to publish information on the difference between the median and mean salaries of male and female employees exempt under the white collar exemptions  and between male and female board members.  Employers would be required to publish this information by July 1, 2020, on a publicly available website.  Employers thereafter would be required to update and republish the information annually by July 1.

In addition, employers would be required to submit this information to the California Secretary of State. This reporting obligation would apply to employers with more than 250 employees that are required to file a statement of information with the Secretary of State.  As currently written, AB 1209 would impose no penalty on employers that choose not to publish this information.

Clarification on Application of CFPA. Lastly, AB 46 would amend the CFPA to clarify that its provisions apply to both public and private employers.

We will continue to monitor these proposed bills and keep you apprised of any updates.

Philadelphia Wage History Law Subject to Temporary Court Stay

Philadelphia’s Wage History Ordinance may not go into effect as scheduled on May 23, 2017. The ordinance, which prohibits employers from inquiring about the wage history of prospective employees is subject to a federal court stay pending resolution of a lawsuit for a preliminary injunction brought by the Chamber of Commerce for Greater Philadelphia.  Click here to read the full article on this development and its implications for employers.

Group of Senators Request Rescission of EEOC Pay Disclosure Rule

As employers eagerly await the fate of the EEOC’s pay disclosure rule, a group of senators asked the Trump administration to unwind the rule.

In September 2016, the EEOC issued a final rule amending the EEO-1 report to require employers with at least 100 employees include in the EEO-1 reports W-2 pay and hours worked data by gender and race and EEO-1 job category for their workforces.   This rule was hotly contested by employers and resulted in hundreds of comments and a congressional hearing. The first pay disclosure under the new reporting requirement is currently due on March 31, 2018.

Since President Trump took office, many have speculated that the rule would be rescinded. On April 12th, a group of senators wrote a letter to the White House requesting just that.  In their letter, the senators called the revisions to the EEO-1 report “misguided” and said that the “revision will place significant paperwork, reporting burden and new costs on American businesses, and will result in fewer jobs and higher process for American consumers.”

The letter also reiterated concerns that many employers had when the rule was proposed regarding the costs associated with complying with the new reporting requirements. The EEOC projected compliance costs to be approximately $54 million and estimated it would take employers approximately 1.9 million hours to complete the report.  Citing the U.S. Chamber of Commerce’s estimates, the senators projected costs to be far higher – $400 million – and estimated it would take employers 8 million hours to complete the report.  As we reported previously, the current EEOC Acting Chair Victoria Lipnic has recently discussed the revised report and noted that it would “fall squarely under” President Trump’s executive orders requiring agencies to reconsider its pending and existing regulations.

We will continue to monitor this developing story and keep you apprised of any updates. Meanwhile, please contact a member of Jackson Lewis’s Pay Equity Resource Group for advice regarding compliance with the EEO-1 pay reporting requirements and other fair pay laws.

Business Community Requests Rejection of Revised EEO-1 Report Requiring Disclosure of Pay Data

The U.S. Chamber of Commerce (the “Chamber”), along with several business associations, has requested that the Office of Management and Budget (“OMB”) rescind its prior approval of the EEOC’s revised EEO-1 Report requiring disclosure of pay data information by gender, race, and occupational category due to the cost and time associated with compliance. The Chamber’s request was backed by the Society for Human Resource Management, National Restaurant Association, National Retail Federation, National Automobile Dealers Association, and others.

In a letter addressed to OMB, the group argued that the EEOC had not satisfied its burden under Section 3517 of the Paperwork Reduction Act (“PRA”). Section 3517 requires that when the federal government seeks to collect information from the public, the relevant agency should 1) minimize the burden imposed on those required to comply with government requests; 2) maximize the utility of the information sought; and 3) ensure that the information provided is subject to appropriate confidentiality and privacy protections.

According to these groups, the EEOC failed to accurately or adequately address the burden placed on companies required to submit the revised EEO-1 Report. Specifically, the EEOC failed to address the cost to employers for upgrading their HRIS systems to accommodate the request for pay data and the amount of time it would take to do so.

In advocating for rejection of the new pay disclosure rule, the associations also relied upon President Trump’s January 30, 2017 Executive Order on Reducing Regulation and Controlling Regulatory Costs which noted that “it is essential to manage the costs associated with complying with federal regulations” and directed all agencies to re-evaluate pending regulations.

As of March 31, 2017, Randy Johnson, a senior vice president with the Chamber, stated that OMB has still not responded to the letter, and noted that the issue is among the Chamber’s top labor priorities.

Philadelphia Law Prohibiting Inquiries into Salary History

The Chamber of Commerce for Greater Philadelphia is challenging the constitutionality of Philadelphia’s Wage History Ordinance in the U.S. District Court for the Eastern District of Pennsylvania. It also seeks a preliminary injunction of the Ordinance, which is scheduled to take effect on May 23, 2017. Click here to read the full article on this ordinance and its implications for employers.

In Case You Missed It: Keeping Up with the California Fair Pay Act

As we recently blogged, the California Fair Pay Act (CFPA), barely a year old, was expanded to prohibit pay differences based on race or ethnicity between employees performing substantially similar work.   Effective January 2017, California employers are prohibited from paying differently employees who are performing substantially similar work, based on gender, race, or ethnicity.

To learn more about this and other changes to the CFPA and how to address the challenges the law presents for employers, click here to access the webinar presented by Jackson Lewis Pay Equity Resource Group principals Mickey Silberman and Susan Groff.

With Proposed Legislation, Iceland Aims to be the First Country to Close the Pay Gap

Iceland has introduced legislation that would require public and private employers to prove they are paying men and women equally for the same or equal work.  The country, ranked in the World Economic Forum’s 2016 Global Gender Gap Report as best in the world for gender equality, has had equal pay laws on the books for half a century pushing companies and the government to gradually reduce the pay gap.  Nevertheless, Icelandic women still earn on average 14 to 18 percent less than men.  This new legislation is intended to aggressively attack and close that gap.

The proposed law would require public and private companies with 25 or more employees to annually certify that they are paying their employees equally for equal work regardless of gender, ethnicity, sexuality, or nationality. To obtain the equal pay certification, employers would have to assess every job and identify and eliminate wage gaps that exceed five percent.  While all covered companies would have to comply by 2022, the country’s largest companies and government agencies would start undergoing equal pay audits beginning in 2018.

This proposed legislation follows an equal pay pilot program in which government agencies, municipalities, and companies implemented an Equal Pay Standard under the supervision of a government group called the Action Group on Equal Pay.  The standard outlined a process to ensure equal pay in the workplace, which included evaluating positions and assigning them a value based on the position and not on the person in the position.  The pilot program participants also met regularly to discuss various hurdles to achieving equal pay and best practices.

Iceland is not the first country to require that employers certify they provide equal pay. Several other countries and the state of Minnesota have equal pay certificate policies.  In Minnesota, certain state contractors must obtain an Equal Pay Certificate prior to executing a contract.  Iceland’s proposed law is unique in that it would apply to both public and private employers.

Iceland is hoping their efforts inspire more countries to work to close their own gender pay gaps. And we’re already seeing movement worldwide around this issue.  Starting next year, in the United Kingdom, companies with more than 250 employees must publish on their own websites information about their gender pay gap.  New Zealand has introduced a bill that would require employers to provide gender and pay data to the government for publication in the aggregate.  In Singapore, companies listed on the Singapore Stock Exchange must calculate pay differences at the board level based on gender.  The first year’s reporting showed male directors on average earn 56.8% more than female directors.

 

New York City Approves Pay History Ban

On April 5, 2017, one day after Equal Pay Day, the New York City (NYC) Council approved legislation to ban employers from requesting or using job applicants’ salary when making hiring decisions. The law prohibits any NYC employer from asking about an applicant’s salary history or searching any publicly available records to obtain such information during the hiring process.  Employers also would be prohibited from relying on an applicant’s salary history when determining salary absent an applicant’s voluntary disclosure.  Click here for more detail on the NYC pay history ban.

Today is “Equal Pay Day”

Tuesday, April 4, is Equal Pay Day, the day symbolizing how far into the year women must work to earn what men earned in the previous year and observed by activists and advocates as an occasion to raise awareness about the gender pay gap.

Several organizations offer suggestions on how to commemorate Equal Pay Day. For example, the American Association of University Women (AAUW), an organization devoted to promoting equity and education for women and girls, offers several “easy ideas for marking Equal Pay Day” and “ways to take any Equal Pay Day to the next level.” The AAUW also offers sample materials, such as an “Equal Pay Day Proclamation.” Similarly, the American Bar Association’s (ABA’s) Gender Equity Task Force suggests the “top six ways to show support for equal pay.” Number one on the ABA’s list: wear red to show “support for women who have been ‘in the red’ to their male counterparts since the end of the previous year.”

Equal Pay Day has become more recognized around the world. In the U.K., the Telegraph posted 14 designs created by social media users to visualize the gender pay gap, such as the one below.

EqualPay

Some have decried the “celebration” of this symbolic day (“’Happy Equal Pay Day,’ said No Woman Ever”).  On Equal Pay Day 2016, Senator Elizabeth Warren (D-Mass.), in a speech on the Senate floor, called it “a national day of embarrassment”: “Today is Equal Pay Day, and by the sound of it, you would think it’s some sort of historic holiday commemorating the anniversary of a landmark day that our country guaranteed equal pay for women. But that’s not what this is about. Not even close.”

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