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.”

U.S. Women’s Sports Intensify the Fray for Equal Pay

About a year ago, five prominent members of the U.S. Women’s Soccer team filed an EEOC charge claiming they were unfairly paid as compared to their male counterparts on the U.S. Men’s Soccer team. That charge is still pending.

As we previously blogged, the U.S. Women’s National Hockey team upped the fair pay ante saying they will not play in this year’s World Championship “unless meaningful progress is made” on fair pay issues.  How much does fair pay mean to these hockey players?  The hockey team is poised to defend its crown as the reigning world champion.

What do these two teams have in common? They win.  On the world’s stage, they are more successful than the men in both sports.

So, what’s the issue? While the factual issues, such are relative revenue generation, make for fascinating and complicated arguments, the legal issues under federal law are the same as those in any equal pay claim outside the world of sports.

Are the jobs substantially similar and do they require substantially equal skill, effort and responsibility under similar working conditions? Are there factors other than sex/gender which explain the pay disparity?  What about market factors?  There are cases under the Equal Pay Act which hold that revenue generation and market pressures can be factors “other than sex” substantiating a difference in pay.

As you watch these battles unfold, keep these legal principles in mind and that recent state pay laws, such as those in California, New York and Massachusetts, are more rigorous and favorable than federal law towards claims of indefensibly unequal pay. Also, consider whether media attention to fair pay in the world of sports and entertainment prompt employees to consider the fairness of their own pay, whether pay differences exist, and whether they can be defended based on neutral pay factors.

U.S. Women’s Hockey Team “Dropping the Gloves” for Pay Equity

The U.S. Women’s National Hockey Team will not play in the upcoming International Ice Hockey Federation World Championship unless “meaningful progress” is made in negotiations for increased pay and support from USA Hockey, the sport’s governing body in the United States. They join the U.S. women’s soccer team in the fight for pay equity. The U.S. Women’s National Soccer Team, in 2016, filed a pay discrimination charge with the EEOC against U.S. Soccer, alleging they unfairly are paid less than the mean’s team.

The Women’s Hockey Team has been trying to get fair wages for more than a year. They also want the same treatment as the men’s team when it comes to equipment, staff, per diems, publicity, and travel.  In addition, they want investment in girls’ programs, more competitive games between Olympics and visibility to develop the sport. Team Captain Meghan Duggan issued a statement, “We are asking for a living wage and for USA Hockey to fully support its programs for women and girls and stop treating us like an afterthought. We have represented our country with dignity and deserve to be treated with fairness and respect.”  Unlike the men’s team, the U.S. Women’s team has been a perennial gold medal favorite in international play and widely viewed by hockey fans as a true hockey world power.

In response, Dave Ogrean, USA Hockey’s executive director, said, “We acknowledge the players’ concerns and have proactively increased our level of direct support to the Women’s National Team as we prepare for the 2018 Winter Olympic Games. We have communicated that increased level of support to the players’ representatives and look forward to continuing our discussions.”

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.

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