Representatives Wear “Suffragette White” to Support Equal Pay and Other Women’s Issues

During President Trump’s first joint address to Congress, a group of democratic female Representatives wore “suffragette white” to shine the spotlight on issues related to women, including #equalpay. Congresswoman Katherine Clark from Massachusetts, who participated in the unified message, posted on her twitter account, “We’re wearing suffragette white at #JointSession as a pledge to fight for women’s #reprorights, #equalpay, #paidleave & more #WomenWearWhite.”  Florida Representative Lois Frankel, Chair of the House Democratic Women’s Working Group, released a statement saying, “We wear white to unite against any attempts by the Trump administration to roll back the incredible progress women have made in the last century.”  The Women’s Working Group’s commitment to women’s rights includes standing for “equal pay for equal work.”

The choice to wear “suffragette white” pays homage to the women who fought for equal voting rights in the early 1900s. These pioneers of women’s rights wore white to symbolize traditional societal notions of female purity as well as to set forth the unified message of their movement.  Since then, suffragette white has been emblematically sported by many, including women fighting for the 1978 Equal Rights Amendment and by Hillary Clinton during her 2016 presidential campaign.

President Trump has not yet announced how his administration will address #payequity. Since the new administration has taken office, the White House Equal Pay Pledge has been removed from the official White House website.  However, this is in contrast to statements made during the campaign suggesting a Trump administration would support equal pay initiatives.  Regardless of President Trump’s stance, these Representatives have shown that they will continue to fight for equal pay.  Democrats have yet to propose new federal legislation on equal pay under the new administration.

California’s Expanding Fair Pay Act

The California Fair Pay Act (CFPA) took effect a little over a year ago (January 2016) but already has been expanded to:

Effective January 1, 2017, salary history alone cannot be used to justify any disparity in compensation between employees doing substantially similar work. Recall that under the CFPA, neutral pay factors used to explain a pay disparity between men and women (and now employees of different races and ethnicities) must “account for the entire wage differential.”  Thus, for instance, a newly-hired female making $50,000 in her prior job must be paid the same as a male doing “substantially similar work” with the same relevant qualifications.  And, while a difference in pay for the newly-hired female might be explained by differences in other factors, such as experience and education, a lower prior salary alone no longer is sufficient to justify that difference.

Massachusetts, Philadelphia and now Puerto Rico already have banned employers from asking candidates about salary history, and several other states and cities are considering similar bans.

The CFPA also now prohibits employers from paying “any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”

Remember that under the CFPA, employers can no longer rely on the notion of equal pay for equal work. Instead, the state adopted a “substantially similar work” test for determining which jobs can be compared, which is decidedly more expansive.  This allows employees and courts to compare wages of employees who perform similar work, even across job titles.  Furthermore, comparisons are no longer limited to the “same establishment.”

California already had strong laws regarding equal pay. With the passage of these amendments, employers need to be proactive in examining their pay practices to ensure compliance and find and fix any issues.

Please contact Jackson Lewis for assistance and consider attending our upcoming webinar on the amended CFPA.

Puerto Rico Enacts Equal Pay Law, Prohibits Employers from Inquiring about Past Salary History

Almost two months after signing sweeping employment law reform, Governor Ricardo Rosselló has signed Puerto Rico Act No. 16 of March 8, 2017, known as the “Puerto Rico Equal Pay Act.” Act 16 is effective immediately.

Although modeled after the federal Equal Pay Act, Act 16 goes further, limiting instances in which employers can inquire into an applicant’s salary history, among other key provisions.

Pay Discrimination Prohibition. Like the federal Equal Pay Act, Act 16 establishes a general prohibition of pay discrimination based on sex among employees in jobs that require equal skill, effort, and responsibility, and that are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.

Past Salary History Inquiries Prohibited. Act 16 prohibits employers from inquiring into an applicant’s past salary history, unless the applicant volunteered such information or a salary was already negotiated with the applicant and set forth in an offer letter, in which case an employer can inquire or confirm salary history.

Pay Transparency. Act 16 forbids employers from prohibiting discussions about salaries among employees or applicants, with certain exceptions for managers or human resources personnel. It also contains an anti-retaliation provision protecting employees who disclose their own salary or discuss salaries with other employees, object to any conduct prohibited by the law, present a claim or complaint, or participate in an investigation under Act 16.

Remedies and “Self-Evaluation Mitigation.” Available remedies for victims of pay discrimination include back pay and an equal amount as a penalty. Double compensatory damages also are available as remedies. The additional back pay penalty can be waived if the employer demonstrates that, in the year prior to the presentation of a salary claim, the employer voluntarily undertook a “self-evaluation” of its compensation practices and made reasonable efforts to eliminate pay disparities based on sex. The self-evaluation or mitigating measures cannot be used as evidence of violation of the law for events that take place within six months after the self-evaluation’s completion or within one year of the self-evaluation if the employer has commenced reasonable and good faith mitigating measures. The Puerto Rico Secretary of Labor is tasked with preparing and distributing uniform guidelines for employer self-evaluations.

The Department of Labor is authorized to prepare interpretive regulations and must commence a statistical study into pay inequality among men and women. The federal EPA and its regulations will be used as reference in interpreting Act 16.

The penalty provisions of Act 16 will not be effective until March 8, 2018, to permit employers to take any mitigating measures.

Jackson Lewis attorneys are available to provide strategic guidance and to assist in interpreting the new law and in implementing or reviewing any requisite policies. Please contact a Jackson Lewis attorney with any questions.

Utah Moves to Foster Equal Pay for Women

Utah state senator, Jake Anderegg (R-Lehi), has introduced a multifaceted bill (S.B. 210)  – the “Employee Performance Act” – requiring equal pay for equal work.  According to the National Conference of State Legislatures, Utah is one of six states without an equal pay law.  If passed, the bill would apply to Utah employers with 15 or more employees.

Prior to introducing the bill, Utah media reported that Senator Anderegg believes fair-market pay benchmarks need to be established using state-collected data and intends to focus on ensuring men and women are paid equally during their first three years of employment. Senator Anderegg also said he would explore how performance evaluations impact pay but did not contemplate Utah actively regulating pay.

As introduced, SB 201 seeks to revise Utah law in three respects.

Employee Evaluations

In an apparent attempt to make the performance review process more uniform, gender-neutral, and transparent to employees, the bill requires:

  • Employers to adopt and disclose to employees written performance evaluation criteria used in adjusting employee pay and benefits.
  • Different criteria could be used for different types of positions, but the criteria must be applied “uniformly to each employee” holding the “type of position” to which the criteria apply.
  • The criteria could not be changed less than six months prior to an employee evaluation where the employer considers whether to change employee pay or benefits.

Gender Wage Study

The bill also would require the Department of Workforce Services (DWS) to conduct a gender wage study to analyze any gender differences in pay, taking into consideration differences in such factors as education level, years of experience, occupation and industry.

For purposes of both the Wage Study and the pay indices described below, the bill amends existing regulations requiring employers to maintain and confidentially provide to DWS relevant pay data.

Occupational Pay Indices

As perhaps a step towards pay scales for private employers, the bill also directs DWS to create and publish indices of current pay ranges by occupation to be published and updated by July 1 each year, beginning in 2018.

While the bill does not specify any other pay factor to distinguish differences in pay, it provides that each index “shall include a separate pay range for at least every five years of experience in the occupation.” Thus for each occupation, the indices would provide the pay range for those with 1 to 5 years of experience, 6 to 10 years of experience, and so on.  DWS would also be required to conduct an advertising campaign to promote the “availability and utility of the indices.”

Unlike recent equal pay laws enacted in California, New York and elsewhere, the bill does not directly provide legal standards for pay. For example California’s Fair Pay Act requires those in “substantially similar” jobs to be paid equally, unless gender-neutral pay factors explain the entire pay difference.

The practical effect of the Employee Performance Act appears to be to provide employees and employers with additional information regarding fair pay. While the bill does not provide a new equal pay cause of action, it purportedly would provide both women and men data and information relevant to a pay discrimination claim under existing pay discrimination provisions of the Utah Antidiscrimination Act. 34A-5-106.

We will monitor the bill’s progress so please check back for updates.

Join Us for the Upcoming Webinar “For California Employers, Pay Equity Keeps Getting More “Comp”licated”

Understanding the recent California Fair Pay Act amendments and the rising tide of equal pay claims is “comp”licated. Employers want to ensure they pay employees fairly and without discrimination. The latest broad expansion of California’s Fair Pay Act (CFPA) is making sure employers do that, and more. In January 2016, the CFPA, went into effect protecting only on the basis of gender and has been expanded to cover race and ethnicity, effective January 2017.

In addition, other recent changes to the law create new challenges for employers and compel us to be more proactive in examining our pay systems. Internal pay claims, government agency investigations, and litigation are only expected to rise, so join us to understand what is needed to find and fix the issues you may currently have.

Click here to register for this webinar.

New Jersey Legislature Fails to Override Governor’s Veto of Pay Equity Bill

In March 2016, the New Jersey Legislature gained bipartisan support to pass a new bill on pay equity. The bill, like many being considered by state and local governments, aimed to remedy sex discrimination in the workplace and close the wage gap.

The bill would have changed the law to require equal pay for “substantially similar work,” allowed back pay for the entire period of discrimination and required certain public contractors to report employment information. (http://www.njleg.state.nj.us/2016/Bills/S1000/992_I1.HTM).

However, shortly after its passage, Governor Chris Christie exercised his veto power, stopping the bill in its tracks. Christie argued the extension of back pay to the entire period of discrimination was too harsh. He suggested the bill should be in line with the Lilly Ledbetter Fair Pay Act of 2009, limiting back pay to two years. He also acknowledged the burden the law would have on employers, calling it “very business unfriendly.” (http://www.njleg.state.nj.us/2016/Bills/S1000/992_V1.PDF)

In an effort to override the veto, the state Senate attempted to gain a 2/3 majority vote on the bill. However, after a contentious debate, four of the Republican senators who had previously supported the bill voted against it the second time around. The bill was only four votes short of the override, with three Senate Democrats absent for the vote. While the New Jersey bill ultimately was not passed, the bill’s sponsor, Senator Loretta Weinberg, promised to “bring this up again.”

Stay tuned to the Jackson Lewis Pay Equity Advisor updates on new and pending legislation.

 

Pay Transparency: The Secret to Success?

The case for pay transparency was best epitomized by Lilly Ledbetter, namesake for the Lilly Ledbetter Fair Pay Act. She was unaware her male peers were paid more than her until she received an anonymous note telling her she was earning significantly less money than men in the same position. Since the enactment of the Act in 2009, we have seen a regulatory shift toward allowing employees to discuss their pay without fear of reprisal.

Federal contractors are prohibited from restricting an employee’s or applicant’s ability to discuss his or her wages with coworkers under Executive Order 13665, which amended Executive Order 11246. Similarly, some state fair pay laws include pay transparency provisions, such as that of Massachusetts and New York.

Pay transparency provisions are intended to help identify and eliminate pay discrimination. The assumption is that if there are fewer secrets about pay, it will be harder for pay inequities to arise. Proponents of pay transparency tout other benefits, such as increased employee trust and engagement (https://www.localwork.com/tools/pay-transparency) and higher job satisfaction, leading to increased employee retention (http://fortune.com/2015/10/15/pay-transparency/).

However, according an article in the Harvard Business Review, pay transparency may cause as many problems as pay secrecy. The article explores the downside to pay transparency using empirical data and cautions employers to consider the potential fallout. It states:

Far from a panacea, pay transparency is a double-edged sword, capable of doing as much — or more — damage as good. Broadcasting pay is as likely to demoralize as it is to motivate. While pay transparency may accelerate attention being paid to remedying pay discrimination, managers should consider moves toward transparency with their eyes wide open.

The problem is not only the demoralizing effect pay knowledge may have on all but the highest paid, but also the accompanying employer-employee communication issues highlighted by the author: Employers must “link individual performance to rewards but recognize that they must be vigilant in efforts both to measure performance and to convince employees that their necessarily imperfect measures are acceptably fair. The real problem with pay transparency is that it focuses individuals on comparing pay rather than on elevating performance.”

Employers, of course, must comply with applicable federal and state regulations mandating pay transparency. From a legal, talent management, and employee relations perspective, employers are well-served by focusing on effectively supporting and persuasively communicating information about their pay systems, based on performance and other relevant, race- and sex-neutral business factors.

Please contact Jackson Lewis for assistance with employee communications.

Is the White House Equal Pay Pledge Obsolete?

One of the Obama Administration’s more subtle and creative efforts to spotlight the gender wage gap essentially relied on peer pressure – the White House Equal Pay Pledge. By signing the Pledge, implemented in June 2016, companies publicly committed to prioritizing pay equity by:

  • Acknowledging the critical role businesses must play in reducing the national pay gap;
  • Conducting an annual company-wide gender pay analysis across occupations;
  • Reviewing personnel processes to reduce unconscious bias and structural barriers;
  • Embedding equal pay efforts into broader enterprise-wide equity initiatives; and
  • Pledging to identify and promote other best practices to close the wage gap.

Within six months, more than 100 of America’s largest private sector employers had taken “the Pledge.” Even after the election of Donald Trump, employers continued to sign the Pledge. Forty-four additional companies declared their commitment to equal pay between August and December 2016. The Equal Pay Pledge appears to have since been removed from the White House website.

While pay equity was a top enforcement priority throughout the Obama Administration, it remains to be seen how the new administration will address the issue. During the presidential campaign, Trump said in an interview on MSNBC’s “Morning Joe,” in August 2015, “Women should have absolute access to capital . . . . If they do the same job, they should get the same pay . . . but it’s very hard to say what is the same job . . . . It’s a very, very tricky question.” Subsequently, Trump’s daughter Ivanka Trump offered this message at the Republican National Convention in July 2016, “Politicians talk about wage equality, but my father has made it a practice at his company throughout his entire career. He will fight for equal pay for equal work, and I will fight for this too, right alongside of him.” The Trump Administration has not yet made policy recommendations on pay equity.

Takeaways: The Equal Pay Issue is Not Likely to Fade Away Quietly

While it remains to be seen how the Trump Administration will address pay equity, activist investor groups and public figures continue to call on employers to prioritize equal pay. Given the media attention, companies that publicly committed to advance pay equity in their organizations may find it difficult to abandon or withdraw from those commitments. Furthermore, with an anticipated business-friendly administration in the White House, state and local governments are strengthening their pay equity laws in ways that increase the risk of workplace lawsuits. Accordingly, employers should consider:

  • Conducting privileged, proactive pay analyses to determine if employees are paid fairly.
  • Reviewing compensation policies and placement processes to reduce unconscious bias and structural barriers and ensure compliance with federal, state and local fair pay laws.
  • Ensuring hiring managers, recruiters and others involved in the hiring/compensation process understand and adhere to federal, state, and local fair pay laws.

Jackson Lewis will continue to report on developments. Please contact us with any questions.

SEC CEO Pay Ratio Rule May Not Survive under New Administration

Acting chair of the U.S. Securities and Exchange Commission Michael Piwowar has indicated the controversial CEO pay ratio reporting rule may be on the chopping block.

The rule, rooted in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, requires publicly traded companies to disclose median employee compensation along with a ratio of how that compares to the chief executive’s pay. The rule is effective in the company’s first fiscal year after January 1, 2017.

The rule was intended to give shareholders previously unavailable  information to consider when voting on executive compensation. The hope is that this increase in transparency would help combat pay inequality. However, Acting Chair Piwowar on February 6, 2017, announced the SEC will reconsider implementation of the rule “based on any comments submitted and to determine as promptly as possible whether additional guidance or relief may be appropriate.”

The announcement comes on the heels of Trump Administration comments threatening to dismantle Dodd-Frank. Although SEC’s regulations provide options for companies to calculate the numbers to be disclosed, the new requirement nonetheless has been criticized for being too difficult to determine and potentially ineffective in meeting its goals. Many employers also are concerned the disclosures will anger employees and incite equal pay claims. This may be particularly true of employees who learn their pay is below the median.

Publicly traded companies should keep a close eye on the status of the CEO pay ratio rule. If it survives, the median employee pay amount and the ratio comparison to the CEO’s compensation must be included in the next financial disclosures. Employers may want to evaluate how best to present the information and, to prepare for potential fallout, to proactively conduct privileged pay analyses to identify and address possible hidden, systemic issues.

Please contact Jackson Lewis for assistance.

Welcome to the Jackson Lewis Pay Equity Advisor Blog!

What does this blog, Mary Tyler Moore, and Super Bowl LI have in common?

Mary Tyler Moore and Super Bowl LI each brought pay equity into the spotlight. The Pay Equity Advisor Blog will spotlight pay equity, bringing you analysis and commentary from Jackson Lewis attorneys on all things related to compensation and pay equity.

For those of you still wondering about the connection between Mary Tyler Moore, Super Bowl LI, and pay equity:

Mary Tyler Moore was an actress perhaps was best known for her role as a single woman working as a producer for a local television station in the sitcom “The Mary Tyler Moore Show.” Moore is celebrated as having “incarnated the modern woman on TV.” In 1972, in the first episode of the third season, Moore’s character, Mary Richards, took on the issue of pay equity, challenging her salary after finding out her male predecessor had been paid more.

Super Bowl LI likewise became a platform for pay equity, at least for 60 seconds. One of the most talked-about Super Bowl ads this year came from Audi, which touted its commitment to equal pay in a 60-second spot about a man and his daughter. The ad, which was released before game day, drew praise and criticism from viewers.

Why should employers care about pay equity?

The issue of pay equity certainly is not new, as shown by its appearance in a nationally televised sitcom nearly 45 years ago. What is unprecedented is the amount of public attention the issue has garnered and continues to garner. Activist investor groups have pushed the issue by buying large stakes in public companies in hopes of influencing change for the public good, keeping pressure on companies to look at and be transparent about their pay practices. Public figures, ranging from the Pope to professional athletes to Hollywood and television actors, are embracing and continuing the discussion, keeping the issue at the forefront. Moreover, an increasing number of states and local governments, such as California, Massachusetts, New York, and Philadelphia, are stepping up their legislative efforts to close the pay gap as the Trump Administration’s policy stance is expected to be business friendly.

The Jackson Lewis Pay Equity Advisor Blog will provide comprehensive updates on pay equity laws and practical strategies for employers facing hot button issues surrounding compensation and pay equity.

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