Illinois Expands Equal Pay Act and Bans Inquiries about Job Applicants’ Wage Histories

An amendment to the Illinois Equal Pay Act expands the Act’s scope and prohibits employers in Illinois from requesting information about a job applicant’s prior compensation.

House Bill 834 passed both houses of the Illinois General Assembly, and was signed into law by Governor J.B. Pritzker on July 31, 2019, as Public Act 101-1077. The new law takes effect on September 29, 2019. Please click here to read the full article about this amendment.

 

New Jersey Passes New Salary History Ban

New Jersey has enacted a new law prohibiting employers from seeking or relying on job applicants’ salary history.

Lieutenant Governor Sheila Oliver (acting on behalf of New Jersey Governor Phil Murphy) has signed legislation that prohibits employers from requesting or relying on a job applicant’s salary history in hiring and pay-setting decisions. The law will take effect on January 1, 2020.

A.B. 1094 comes a year after New Jersey’s passage of the New Jersey Equal Pay Act (codified as P.L. 2018, c.9), which precludes an employer from paying an employee of any protected class at a lower rate than other employees with similar job duties, unless the employer has a legitimate business reason for the differential.

New Jersey’s new salary history ban bars employers from screening job candidates based on wage, salary, and benefits history or requiring a salary history satisfy any minimum or maximum criteria. The law further proscribes an employer from requiring candidates to disclose past salaries. Under the new law, if the applicant voluntarily provides his or her salary history without prompting, employers may verify salary history and factor in the information into salary, benefits, and compensation decisions.

The law does not apply to internal transfers or promotions, an employer’s use of knowledge acquired through the candidate’s prior employment with the business, or when a federal law or regulation mandates the disclosure of a candidate’s salary history.

Further, where the position involves incentive or commission plans, the New Jersey law authorizes an employer to inquire about an applicant’s previous experience with incentive and commission plans, so long as the employer does not seek information on the applicant’s previous earnings from those plans.

Additionally, an employer’s attempt to obtain or verify an applicant’s disclosure of non-salary-related information when conducting a background screening does not violate the law if the employer states in its request that salary history is not to be disclosed. If salary history is disclosed, employers may not retain the information or consider it when determining compensation for the applicant.

Employers who violate New Jersey’s salary history ban face fines of up to $1,000, $5,000, and $10,000 for the first, second, and third violations. Employers also risk additional penalties under the New Jersey Law Against Discrimination.

The law addresses a gap in the Diane B. Allen Equal Pay Act. Specifically, while the Equal Pay Act sets forth specific standards an employer must meet to justify a pay disparity for employees who perform substantially similar work (e.g., seniority system, merit system, or the 5 factor test set forth in the statute), the law is silent as to employer inquiries into a prospective employee’s compensation or benefits. This law eliminates any such ambiguities or confusion with respect to such inquiries. In fact, the law permits a multi-state employer to maintain compensation history inquiries on application forms so long as the employer includes a disclaimer “immediately preceding the salary history inquiry on the employment application […] that an applicant for a position the physical location of which will be in whole, or substantial part, in New Jersey is instructed not to answer the salary history inquiry.”

Employers should review and revise their hiring practices and policies to ensure compliance with the laws in the states in which they operate. Jackson Lewis attorneys will continue to monitor pay equity developments. Please contact us with any questions about the potential implications of New Jersey’s salary history ban or other legal developments.

New York Governor Kicks Off U.S. Women’s Soccer Team’s Ticker-Tape Parade with Equal Pay Legislation

On the heels of the U.S. Women’s Soccer Team’s World Cup win, Governor Andrew Cuomo on July 10, 2019, signed into law two bills that expand New York’s existing equal pay laws.

In enacting two of the three equal pay bills passed by the New York Legislature, New York joins other states in expanding the bases for compensation discrimination claims and restricting salary history inquiries. (E.g., Colorado Enacts Comprehensive Equal Pay Law and Alabama Passes New Pay Equity Act.)

New York’s S. S5248A prohibits unequal pay on the basis of all protected characteristics, not just gender. Under New York law, this includes, age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, or domestic victim status. The new law also expands the potential comparators under the law by prohibiting compensation discrimination among employees who are engaging in substantially similar work, when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions.

The second bill, S. S6549, prohibits employers from relying on the wage or salary history of an applicant in determining whether to offer the applicant employment or in determining the wages or salary of such individual. It also prevents employers from orally or in writing requesting salary history of an applicant or employee in determining whether to offer employment or the amount of salary to be offered. There is also a provision prohibiting employers from retaliating against applicants or employees because they refused to provide salary history or filed a complaint with the New York Department of Labor.

Please contact a member of the Jackson Lewis Pay Equity Resource Group with any questions. We will continue to monitor and report on this and other developments in equal pay laws.

 

Data System Security Info and File Specifications Added to EEO-1 Pay Data Reporting Website

As July 15th draws closer, EEOC and NORC are ramping up for opening of the EEO-1 Component 2 Pay Data reporting portal. As part of these efforts, they are consistently providing new information on the reporting obligation.

Please find the rest of this article on our Affirmative Action & OFCCP Law Advisor blog here.

Additional Insights on the New Updated EEO-1 Component 2 Pay Data Materials

As we previously reported, on July 2, EEOC updated the its newly created website with long-awaited materials regarding the obligation of employers with 100 or more employees (or contractors with 50 or more employees) to submit pay data and hours worked data as part of the annual EEO-1 reporting obligations.

Please find the rest of this article in our Affirmative Action & OFCCP Law Advisor blog here.

EEO-1 Pay Data Alert: EEOC Adds Materials and FAQ Answers to Website

As we approach the July 15 date on which EEOC expects to open the portal to file EEO-1 Component 2 pay data reports, EEOC has at long last provided us with guidance materials:  https://eeoccomp2.norc.org/faq.html.

Please find the rest of this article in our Affirmative Action & OFCCP Law Advisor blog here.

California Pay Data Reporting Advances: EEOC May Not Be Alone for Long

The recent focus on the EEOC’s new Component 2 to its EEO-1 Report has been undeniable. It requires employers report on the race, ethnicity, sex, job type, pay, and hours worked data of its employees.

OMB approved this data collection during the Obama Administration. Then, under President Donald Trump, the OMB reversed course, staying the obligation. In response, the National Women’s Law Center sued to reinstate it. Earlier this year, the District Court overturned the stay – requiring employers, again, to disclose employee pay. While the OMB has appealed this decision, EEOC is on track to begin collecting this detailed race-, ethnicity-, and sex-based pay data soon.

With all this activity at the national level, it would be easy to miss the other mandatory EEO pay data reporting obligations advancing.

California – estimated to be the fifth largest global economy – is quietly advancing its own race- and sex-based pay data reporting requirement. Introduced in January 2019, Senate Bill 171 passed the California Senate on May 22. On June 26, it began its path through the Assembly with hearings in the Labor and Employment Subcommittee.

In its current form, SB 171 would require private employers with at least 100 employees to submit an annual report for each establishment to the California Department of Fair Employment and Housing (DFEH). The bill would require the DFEH to make the reports available, upon request, to the California Division of Labor Standards and Enforcement, the state agency tasked with enforcement of the state’s wage and hour laws.

Much like the EEO-1 Report’s Component 2, each proposed California report would contain employee pay data broken down by race, ethnicity, and sex within specified job categories. In fact, the two requirements are so similar that, in its current form, SB 171 would permit employers to submit their EEO-1 Report Component 2 to satisfy the contemplated state-level reporting obligation.

The Jackson Lewis Pay Equity Resource Group will continue to monitor and report on these developments, but please reach out to a Jackson Lewis attorney with any questions.

New York Adopts Laws Aimed at Combating Salary Inequality and Race Discrimination

In the final days of its 2019 Session, the New York State Legislature passed three bills that, respectively, will bar employers from inquiring about applicants’ past salary history, prohibit wage differentials based on protected class status, and ban race discrimination based on an employee’s hair or hairstyle. Governor Andrew M. Cuomo is expected to sign these bills.

Please find the rest of this Jackson Lewis legal update here.

EEO-1 Component 1 Down … Component 2 Pay Data Up Next

The May 31, 2019, deadline for filing EEO-1 Component 1 race-and-gender data has come and gone. The portal for filing Component 1 data will remain open for several more months, however, and there are no fines or penalties for filing late.

EEO-1 Component 2 pay-and-hours-worked data is due by September 30, 2019 (the same day federal contractor VETS-4212 reports are due). However, employers will find nothing on EEOC’s website regarding Component 2. For now, only the draft materials and sample forms EEOC published in 2016 are available. For a copy of those materials, please contact this blog’s author through the link above or at Christopher.Chrisbens@jacksonlewis.com.

EEOC expects to publish updated materials before the opening of the EEO-1 Component 2 filing portal in mid-July. When open, the portal will be https://eeoccomp2.norc.org/. EEOC states that it hopes to have an operational helpdesk soon. It will be at EEOCcompdata@norc.org and (877) 324-6214.

Filers should keep in mind the following points for successfully completing the required reports:

  • Two Reports – 2017 and 2018: covered employers will file two reports; one using the 2017 Component 1 workforce snapshot, and the second using the 2018 workforce snapshot used for 2018 Component 1.
  • W-2, Box 1 Pay Data: Contrary to the mistaken heading in the draft 2016 forms, do not file “Annual Salary” data. Rather, use 2017 and 2018 yearend W-2, Box 1 pay data to slot each snapshot employee into one of the 12 pay bands in each EEO category.
  • Hours Worked: For non-exempt workers, report aggregate hours worked (or on call) for the number of employees in each cell. Hours worked means just that – excluding paid time on leave, vacation, PTO, and the like and not working. For example, if there are 5 non-minority women in the second pay band in EEO category 3 Technicians, aggregate the total number of hours these women worked for the calendar year in the corresponding cell.

For exempt workers, assume that each full-time employee works 40 hours per week and multiply 40 hours per week by the number of weeks in the calendar year each worker was “employed” by the reporting company. No need to exclude non-work hours. For part-timers, assume each worked 20 hours per week and multiply by the number of weeks “employed.” For example, if there are 5 Black men in the first pay band of EEO category 2 Professionals, calculate for each employee 40/20 hours/week multiplied by the number of weeks he was employed, aggregate the figures for the 5 men, and provide that data in the appropriate cell.There will be much work involved to pull the pay, hours worked, and race/gender data from multiple systems, reconcile the data, and determine hours worked and weeks employed.We will provide updates as they are available. If you need assistance with EEO-1 reporting, or pay equity analyses, please contact your Jackson Lewis attorney.

 

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