The Oregon Equal Pay Act of 2017 greatly extends pay equity protections to a variety of protected classes, prohibits employers from asking for applicants’ salary history, and expands existing remedies available to employees. House Bill 2005 also offers key protections and a safe harbor for employers. Click here to read the full article on this development and its implications for employers.
Philadelphia’s Wage History Ordinance lives on, for now. The Ordinance, initially scheduled to take effect on May 23, 2017, has been subject to a federal court stay pending resolution of a lawsuit for a preliminary injunction brought by the Chamber of Commerce for Greater Philadelphia. On May 30, the court dismissed the lawsuit. Click here to read the full article on this development and its implications for employers.
The U.K. Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 went into effect in April. The new law requires private employers with 250 or more U.K.-based employees to publish, for 2017 and every year thereafter, information showing differences in pay between male and female employees.
What Must Be Reported? Employers subject to the Regulations must publish the following information:
- mean gender pay gap based on hourly pay and bonus;
- median gender pay gap based on hourly pay and bonus;
- mean gender bonus gap;
- median gender bonus gap;
- proportion of male and female employees receiving bonus pay; and
- proportion of male and female employees in the company’s lower, lower middle, upper middle and upper quartile hourly rate pay bands (excluding paid leave).
How Are The Data Calculated?
Pay and Bonus. Employers will have to calculate employees’ gross hourly pay, using pay data for the pay period falling within the mandatory “snapshot date” of April 5. Gross hourly pay is based on all “ordinary” and bonus pay for the relevant pay period. Ordinary pay includes basic pay, allowances, pay for piece work, pay for leave, and shift premium pay. Bonus pay includes any remuneration in the form of money, vouchers, securities, securities options, or interests in securities, relating to profit sharing, productivity, performance, incentive or commission.
Quartile Bands. Quartiles are calculated by ranking employees by gross hourly pay from lowest to highest. The list then is divided in four equal sections to the extent possible, and reporting how many men and women are in each quartile.
Detailed instructions on how to calculate each factor can be found on here the HM Government website.
How Is The Information Reported? The required information must be published on the employer’s website in a manner accessible to all employees and to the public. The information must be accompanied by a signed statement of a corporate director or equivalent, confirming the information is accurate. The information must be maintained on the employer’s website for at least three years from the date of publication. The information and signed statement also must be submitted to the Secretary of State for publication on a government website. Employers additionally may (but are not required to) submit a written narrative explaining why a gender pay gap is present and what the organization intends to do to close the gap.
What is the Deadline for Reporting? Employers must publish the required information each year within 12 months of the mandated “snapshot date” of April 5. Thus, 2017 information must be posted and reported by April 4, 2018.
What are the Sanctions for Non-Compliance? The Regulations do not contain any explicit sanctions for failure to comply. However, the Explanatory Memorandum to the Regulations provide that failure to comply will constitute an “unlawful act” and thus would fall within the enforcement authority of the Equality and Human Rights Commission.
What Does This Mean for Employers with U.K.-Based Employees? The information that must be published is a simple comparison of average and median pay between all men and women in a covered employer’s relevant workforce. The published data will not account for legitimate, non-discriminatory, business reasons accounting for any average or median pay differences, such as differences in job type or function, tenure, time in position, experience, performance, location, etc. Unless employers include the permissible (but not mandatory) written narrative, there will be no opportunity to explain or qualify possible gaps which appear in the data.
Employers subject to the Regulations should begin reviewing and gathering payroll data and demographic information necessary to calculate the required information. Moreover, covered employers should consider performing privileged pay analyses prior to submitting any information to identify the reasons for any gender pay gap differences. This will enable an employer to better determine whether to provide the additional voluntary narrative and other public relations communications before releasing the data.
We will continue to monitor this developing story and keep you apprised of any updates. Jackson Lewis’s Pay Equity Resource Group attorneys are available to provide strategic guidance and assist in interpreting and correcting possible pay gaps.
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’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.
New York City Mayor Bill de Blasio signed into law legislation prohibiting employers from inquiring about a job applicant’s salary history. The bill will apply to all NYC employers and will take effect on October 31, 2017. Click here to read the full article on this law and its implications for employers.
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.
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.
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.
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.