Washington State Legislature Sends Comprehensive Pay Equity Bill to Governor

The Washington Legislature has sent Governor Jay Inslee a proposed Act that would significantly broaden the state’s Equal Pay and Opportunity Act. The Governor is expected to approve it.

Pay Equity and Gender

Following Title VII principles, the Act defines “similarly employed” as jobs requiring “similar skill, effort, and responsibility… performed under similar working conditions.” Pay differences may be based on other job-related, bona fide factors, such as “education, training or experience; a seniority system; a merit system … [or] regional differences in compensation levels.”  An employer must explain the entire pay differential.

The Act replaced the term “sex” with “gender.” Accordingly, LGBTQ employees also appear to be protected from pay discrimination under the Act.

Salary History

Salary history is not a defense to a claim of inequitable pay. While the Act does not expressly prohibit salary history inquiries, the value of such inquiries seems greatly diminished under the Act. Setting pay, even in part, according to an applicant’s salary history would leave an employer vulnerable to claims.

Inequality in Advancement Opportunities

Employers may not “limit or deprive” an employee of otherwise available advancement opportunities based on gender. An isolated incident is insufficient support for a claim. The employer must be found to have committed a pattern of violations as to the employee or committed a violation through application of a formal or informal employer policy or practice.”

Pay Transparency and Retaliation

Employers may not:

  • Require employees to enter any non-disclosure or waiver agreement, preventing them from disclosing their pay; or
  • Retaliate against an employee who asks about, discloses, or discusses pay; asks the employer to explain her pay or lack of advancement opportunities, or aids or encourages another employee to pursue her rights under the Act.

The Act does not apply to applicants who inquire about pay during the application process or ask current employees about their pay.

Other Provisions

Employees may bring direct lawsuits against their employers. Suits must be brought within 3 years of an alleged violation. A violation occurs when a discriminatory decision is made, when an employee becomes subject to the decision, or when the employee is affected by the decision. Such violations occur “each time wages, benefits or other compensation is paid” as a result of a discriminatory decision or practice. Based on an employee complaint, the Department of Labor and Industries must investigate the complaint.

Whether the claim is brought directly by an individual employee or by the Department, an employer may be liable for actual or statutory damages up to the greater of actual damages or $5,000, plus 1% interest per month on all compensation owed, costs, and reasonable attorneys’ fees. Actual damages may date back to 4 years prior to the last violation prior to the filing of the lawsuit. The Act also calls for civil penalties of up to $500 for the first violation and the greater of $1,000 or 10% of actual damages for each subsequent violation.

A Look at the Massachusetts AG’s Office Guidance on Equal Pay Law

As posted last week, on March 1, 2018, the Massachusetts Office of the Attorney General issued its much anticipated guidance on the state’s new pay equity law, set to take effect on July 1, 2018. The Attorney General’s Guidance does not have the legal force of a regulation but provides clear insight into how the Attorney General’s Office views and will enforce the law.  Click here to read our full article outlining the AG’s Office Guidance and the implications for employers.

Massachusetts Attorney General’s Office Publishes Guidance On Pay Equity Law

Today, the Massachusetts Attorney General’s office published its long-awaited guidance on Massachusetts’ new pay equity law, which is effective July 1, 2018.  The guidance addresses a number of frequently asked questions and further provides guidance for employers on conducting “self-evaluations” of pay practices.  A link to the Attorney General’s guidance is found here.  Jackson Lewis attorneys are reviewing the guidance and will publish a more detailed analysis shortly.

Previous Jackson Lewis articles on the Massachusetts pay equity law can be found as follows:

Trump’s 2019 Budget Proposal: Systemic Pay Discrimination Will Remain Priority

President Donald Trump’s budget proposal projects that both the EEOC and OFCCP will be “doing more with less.” Consequently, the agencies plan to focus resources.

As set forth in the Budget Justification for OFCCP:

OFCCP’s FY 2019 priorities support the agency’s efforts to enforce the law by emphasizing high-impact systemic cases and expand contractor compliance assistance, thereby reducing the cost of compliance that covered contractors incur while simultaneously protecting a greater number of workers and jobseekers from employment discrimination.

According to the EEOC Acting Chair, “Our Strategic Plan for 2018-2022 focuses on making maximum use of our limited resources to achieve the greatest return on the investment of taxpayer dollars.” This effort includes a focus on systemic discrimination cases, including pay cases.

As underscored in the report, Advancing Opportunity – A Review of the Systemic Program of the U.S. Equal Employment Opportunity Commission, systemic investigations and lawsuits typically have strategic impact because they address significant legal issues or policies, or have a wide influence on an industry, occupation, or geographic area…. [S]ystemic enforcement is a greater driver of employer compliance than individual investigations or cases.

This should have employers and federal contractors taking steps to avoid coming under OFCCP/EEOC attention.

In fiscal year (FY) 2017, OFCCP recovered nearly $24 million in monetary relief, 40 percent of which were from pay discrimination cases. From pay discrimination audits, the agency recovered a record-setting $14 million.

Even with a more contractor-friendly OFCCP, audits will follow the money, or at least attempt to identify those audits where the money is most likely to be found. To that end, OFCCP continues to hone its pay audit skills and resources.

The bottom line is:

OFCCP anticipates about 35 percent of its discrimination conciliation agreements to address systemic pay discrimination by prioritizing review of pay related employment practices.

Moreover, OFCCP may conduct many more “streamlined” audits in FY 2018 and FY 2019 in order to identify those with high-impact potential.

In its Budget Justification, the EEOC also touts its successes in systemic cases:

Notably, the EEOC tripled the success rate for conciliation of systemic matters from 21 percent to between 45 – 64 percent over the past decade and the EEOC’s litigation program has achieved a remarkable 92 percent success rate in its systemic cases over the past 10 years (through FY 2017).

How does OFCCP determine if an audit is likely to be a high-impact pay case? OFCCP won’t have W-2 pay data in EEO-1 reports, but, at the outset of an audit, OFCCP has even better data: Item 19 base pay and pay component data. With the EEOC, an individual pay discrimination charge may lead to systemic investigations and class actions.

With improved tools and training, and more audit opportunities, OFCCP may be even better equipped to identify systemic pay issues. The EEOC, with a much larger budget, also has ample opportunities to ferret out “strategic impact” pay cases.

Of course, the remedy is to stay a step ahead of OFCCP audits and EEOC pay charges by reviewing and improving pay practices, and proactively analyzing pay data.

Canadian Magazine Responds to Pay Gap with Dueling Cover Prices

In the fight for equal pay, which has spanned from the legal stage to the center stage, one Canadian company has decided to address the pay gap, at least temporarily, through dueling magazine cover prices.

Maclean’s, a popular monthly Canadian news magazine that reports on current political affairs and pop culture, is asking men to pay 26 percent more for its February 2018 issue than women. According to MacLean’s, the difference in prices reflects the 26 percent gender pay gap that exists in Canada. The content for both magazines is exactly the same – but one cover charges men $8.81, while women are charged $6.99.  Readers can choose to pay whichever price they want.  The extra $1.82 per issue from those who choose to pay more will be donated to “those for whom the pay gap is most extreme.” Maclean’s Editor in Chief does not expect this to spur radical change overnight.  The objective is to stir conversations about wage disparities between full-time male and female employees in Canada.

Canada has a history of addressing pay inequities in ways more prominent than dueling magazine cover prices. For example, in 2001, the Canadian government created an independent Pay Equity Task Force (the Bilson Task Force) to review the Canadian Human Rights Act and make recommendations for the improvement of the federal pay equity legislative framework.  More recently, in 2016, the Special Committee on Pay Equity addressed the need for proactive pay equity legislation in a special report to Parliament called It’s Time to Act. However, and as highlighted in Maclean’s feature article, women continue to earn less than men, regardless of the employment sector, the position of the employee, or the number of hours worked.  The most recent statistics show that on average, the earnings gap between men and women is about 26 to 31 percent.

The Maclean’s article notes that in the wake of the #MeToo and #TimesUp movements, employee salaries are being placed in the spotlight in an effort to address disparities, despite the uptick of recent legislative efforts to prohibit disclosure of salary information. However, with the government’s promises of new federal legislation addressing pay equity, Canadians are hopeful that change may be on the horizon.

As such issues continue to take center stage both nationally and internationally, our Pay Equity Resource Group attorneys are available to provide strategic advice on these and similar pay equity issues. We will keep you updated with any developments.

The Fight Over EEO-1 Pay Data Collection Continues

As previously reported here, in November 2017, following the Office’s of Management and Budget (“OMB’s”) “immediate stay” of the EEO-1 pay data reporting requirement, the National Women’s Law Center (“NWLC”) and the Labor Council for Latin American Advancement (“LCLAA”) filed a lawsuit to reinstate the EEO-1 pay data reporting requirement, asserting OMB lacked the legal basis to stay the pay data reporting requirement.

This week, the OMB struck back with a motion asking the court to dismiss the NWLC/LCLAA lawsuit.  OMB argued it has continuing authority to review the pay data collection requirement.  Moreover, OMB contended the NWLC and LCLAA do not have standing to sue because neither have been impacted by the OMB’s decision to stay the requirement pending further review. OMB further argued that, in any event, the lawsuit was premature because it has not yet made a final decision on EEO-1 pay data collection.

Regardless of the ultimate fate of EEO-1 pay data collection, gender and race pay gap issues continue to be an area of focus. Jackson Lewis’ Pay Equity Resource Group will keep you updated with the latest developments.

Hollywood’s Time’s Up Movement Keeps Pay Equity in Spotlight

At the start of 2018, a group of powerful women in Hollywood launched the “Time’s Up” initiative to counter systemic sexual harassment and discrimination and address broader issues affecting women, including fair pay in the workplace. In support of its goals, the initiative includes a legal defense fund to help women protect themselves from sexual misconduct and discrimination.

In a letter to The New York Times, organizers said, “Unfortunately, too many centers of power – from legislatures to boardrooms to executive suites and management to academia – lack gender parity and women do not have equal decision-making authority…. This systemic gender-inequality and imbalance of power fosters an environment that is ripe for abuse and harassment against women.”

In fact, following backlash from revelations that Mark Wahlberg was paid 1,500 times more than Michelle Williams for reshoots of the same film, Wahlberg donated his fee to the Time’s Up Legal Defense Fund.

The ongoing spotlight on gender issues, as well as the legal defense fund, will likely lead to greater litigation over sexual harassment and pay equity in the workplace, in Hollywood and beyond. Employers should consider undertaking privileged proactive pay equity analyses to ensure that they are prepared for potential claims of discrimination.

Our Pay Equity Resource Group attorneys are available to provide strategic advice as pay equity issues continue to gain momentum. We will keep you updated with any developments.

New Jersey Bars State Agencies from Seeking Applicants’ Wage Histories

In his first official act upon taking office, newly elected Governor Phil Murphy signed an executive order barring state agencies from asking job applicants about wage history. Former Governor Chris Christie previously vetoed legislation that would have prohibited employers from requesting salary history information from prospective employees.

Effective February 1, 2018, state agencies are prohibited from asking a job applicant for past wage history unless or until a conditional offer of employment, including an explanation of the overall compensation package, has been extended. State agencies also are forbidden from investigating or researching prior salaries of applicants. An agency may request or verify current or previous compensation information prior to a conditional job offer only if an applicant volunteers such information or if verification is required by federal, state or local law. An agency that obtained salary history information prior to the effective date of the Executive Order is prohibited from using that information in any employment decision unless required to do so by law or collective bargaining agreement.

Upon signing the law, Governor Murphy pledged to sign any legislation banning the practice statewide and made clear his commitment toward equal pay for women in New Jersey, “Here and now we begin the process of bulldozing the roadblocks that have kept women from being paid fairly, that have kept many women of color from fulfilling their dreams of entering the middle class, and that have allowed our wage gap to persist.”

New Jersey is the latest in a growing list of states and local governments to prohibit pre-employment inquiries into salary history. Stay tuned to the Jackson Lewis Pay Equity Advisor blog for updates on new and pending legislation

Ring in the New Year by Ensuring Compliance with New Salary Inquiry Bans

In recent months, several states and localities have passed laws and ordinances banning inquiries into an applicant’s prior compensation, including in California, Massachusetts, Delaware, New York City, Oregon, Puerto Rico, San Francisco, and Philadelphia. There are similar laws currently under consideration in a number of other states, and this topic is bound to be a key focus for lawmakers in 2018.

Companies in jurisdictions with already enacted laws should ensure they enter the New Year in compliance with any new salary inquiry requirements.

Here are a few best practices employers should consider incorporating into their processes:

  • Remove all pre-offer salary history information from sources used to collect applicant information in those jurisdictions with salary history bans. Employers also should ensure that written policies conform to the law. This includes questions posed on written employment applications, as well as online sources, such as Applicant Tracking System software used to aid in the HR process.
  • Train recruiters and talent acquisition teams. Be sure to train all HR personnel, recruiters, third-party hiring agencies, and anyone else involved in the hiring process on the new requirements, including how to document when an applicant voluntarily discloses salary history.
  • Be cognizant of when you ask for an applicant’s W-2 form. Asking for an applicant’s W-2 form before the salary history question becomes lawful may violate some salary inquiry bans. New York’s ban, for example, allows employers to ask for W-2 forms only to verify voluntary and unprompted salary disclosures. Such a request may be prohibited even after an employer makes a conditional offer and has set compensation for the job.
  • Understand what is meant by “compensation.” “Compensation” should be interpreted broadly and as including more than just an applicant’s base salary, such as vehicle allowances, retirement plan contributions, or bonuses. Inquiry into all of these measures as defined “compensation” are prohibited.

Our Pay Equity Resource Group attorneys are available to provide strategic guidance as more localities begin instituting salary history bans and similar pay equity measures in 2018.

The Fight to Keep EEO-1 Pay Data Collection

Just when it appeared settled that EEO-1 Pay Data reporting was no longer on the table, advocacy groups have filed a lawsuit to reinstate the rule.

 In November, the National Women’s Law Center (NWLC) and the Labor Council for Latin American Advancement filed suit against the Office of Management and Budget (OMB), the Equal Employment Opportunity Commission, and other government entities to reestablish the requirement that certain employers submit aggregate pay data and hours worked with their annual EEO-1 Report, in addition to the traditional demographic data already submitted.

 While intended as a way to address discriminatory pay practices, the means of achieving the result was controversial. Critics argue against the aggregate nature of the data as units of analyses, which would not take into account factors that influence pay. Additionally, the burden on employers, who often do not have crossover between payroll systems and demographic data, would be significant.

As expected, in August, the OMB issued a stay on the pay data collection aspects of the new EEO-1 Report, citing data submission specifications that were not open to public comment during the review process and a resulting change in the burden estimate for employers.

In the NWLC complaint filed challenging the stay, the plaintiffs argue, among other things, that the OMB did not have authority to issue the stay and that the OMB’s Memorandum failed to explain how the pay data collection requirement “lacked practical utility, [was] unnecessarily burdensome, and failed to adequately address privacy and confidentiality issues . . . nor why any purported problems . . . outweigh the benefits identified by the EEOC and OMB in approving the revised EEO-1.”

Regardless, of what the court decides, we anticipate that the 2017 EEO-1 Reports due date of March 31, 2018, will not change and only will collect traditional demographic information.

Jackson Lewis’ Pay Equity Resource Group will keep you updated with any developments.