Alabama Passes New Pay Equity Act

Yesterday, Alabama’s Governor, Kay Ivey, signed a new law that would prohibit employers from paying less for the same work on the basis of gender or race. After both the House and the Senate approved the bill, it was sent back with an executive amendment from Governor Ivey on May 30, 2019. Upon approval of that amendment by the Alabama House and Senate, the law just received the necessary executive signature for enactment. With the passage of this law, titled the Clarke-Figures Equal Pay Act, only Mississippi remains without any state equal pay legislation in place.

Employers should be aware that the new law allows for differences in pay for the same work when based on reasons such as seniority or a merit system. Further, such differences may be supported by any system that measures earnings by the quantity or quality of production or a differential that is “based on any factor other than sex or race.”

Any employee filing a claim for unequal pay against his or her employer bears the burden of pleading with particularity that (1) the employee was paid less for the same work despite possessing equal skill, effort, education, experience and responsibility, and (2) the applicable wage schedule does not correlate to any conditions permissible under the Act.

The Clarke Figures Equal Pay Act also mandates that employers may not refuse to interview, hire, promote or employ any applicant or retaliate against any applicant because that applicant does not provide a wage history.

Any violations of either the unequal pay subsection or the mandate preventing actions based on a failure to provide a wage history would require the employer to pay the employee all monies owed, plus interest. Employees will have two years from the alleged act of discrimination to file a lawsuit.

The new law also requires employers to adopt the rules for record keeping established under the Fair Labor Standards Act. The Clarke-Figures Equal Pay Act will take effect September 1, 2019.

Colorado Passes Comprehensive Equal Pay Law

Colorado Governor Jared Polis has signed what is one of the toughest enhanced state pay equity laws to date. Colorado has become the tenth state in the country to pass an equal pay law that is more demanding than federal law. The new law goes into effect on January 1, 2021.

Just before the close of the legislative session on May 22, and after months of debate and considerable amendment, two Republicans joined Colorado Senate Democrats in passing the “Equal Pay for Equal Work Act” (SB 19-085). It shares similarities with other enhanced state equal pay laws, including provisions on pay equity, pay history, and pay transparency. However, unlike other states, the Colorado law contains unique notice requirements.

Unique to Colorado

The Colorado Equal Pay for Equal Work Act includes the following two notice requirements, which are found in no other state equal pay law:

  • Employers must make reasonable efforts to announce, post, or make known all opportunities for promotion to all current employees on the same calendar day.
  • Employers must disclose in each posting for each job opening the hourly or salary compensation, or a range of the hourly or salary compensation, and a general description of all benefits and other compensation offered.

Key Provisions

The new law protects against discrimination because of sex (including gender identity) or sex in combination with another protected status. Employers may not pay an employee of one sex less than an employee of another sex for substantially similar work.

However, an employer can avoid legal liability under the new law if it demonstrates that the entire difference in compensation is based on at least one of the following:

  1. A seniority system;
  2. A merit system;
  3. A system that measures earning by quantity or quality of production;
  4. The geographic location where the work is performed;
  5. Education, training, or experience to the extent that they are reasonably related to the work in question; or
  6. Travel, if a regular and necessary condition of the work performed.

The new law creates a private right of action for employees. A successful plaintiff may recover up to three years of back pay and liquidated damages in the amount of the back pay, unless the employer can show the “act or omission giving rise” to the pay violations was made in good faith.

Mini-Safe Harbor

Similar to equal pay laws in Massachusetts and Oregon, the Colorado law provides an incentive for employers to conduct proactive self-evaluations of their compensation practices. While not a complete defense against lawsuits, employers may use evidence of a “thorough and comprehensive pay audit” with the “specific goal of identifying and remedying unlawful pay disparities” to avoid an award for liquidated damages.

Pay History

Colorado joins nine other states with statewide salary history bans applicable to both public and private employers.

Under the new Colorado law, employers may not:

  1. Seek the wage history of a prospective employee;
  2. Rely on the wage history of a prospective employee to determine a wage rate; or
  3. Discriminate or retaliate against a prospective employee for failing to disclose wage history.

Pay Transparency

Finally, the new law prohibits employers from preventing their employees from discussing compensation information with others, or requiring any employee to sign a waiver that prohibits his or her ability to do the same.

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Employers in Colorado should consider reviewing their pay policies and practices with employment counsel and stay tuned for further compliance updates. Please contact a Jackson Lewis attorney with any questions related to this and other workplace developments.

EEOC Decides to Collect 2017 Pay Data In Addition to Data for 2018

One of the biggest outstanding questions about the recently reinstated pay data reporting obligation was whether employers will be required to provide more than one year of pay data during this reporting cycle.  EEOC has made its decision.

Please find the full article in our Affirmative Action & OFCCP Law Advisor blog here.

Washington Adds Pay History Ban, Transparency Requirements

Washington is the latest state to pass additional pay equity protections. One year after enacting the 2018 Equal Pay and Opportunity Act, which included an array of enhanced pay equity provisions, the legislature passed HB 1696, which restricts pay history inquires and enhances pay transparency requirements. The bill passed on a near party-line vote. Governor Jay Inslee is expected to sign the legislation, which would go into effect 90 days later.

Pay History

Washington will be the eighth state to ban all public and private employers from (1) seeking the wage or salary history from an applicant or the applicant’s current or former employer; or (2) relying on prior wage or salary history to set pay.

Pay Transparency

HB 1696 also includes a requirement that after an employment offer has been made, employers (with at least fifteen employees), upon request, provide the minimum wage or salary for the applicant’s new position. Additionally, if requested, employers must provide wage scale or salary ranges for internally transferred employees.

Finally, when no wage or salary range exists, employers must provide the minimum wage or salary expectation prior to posting the position, making the position transfer, or making the promotion.

What Should Employers Do?

Employers, if they have not already done so, should consider removing salary history questions from employment application materials and train all recruiters to comply with state and local bans regarding salary history.

Our Pay Equity Resource Group will continue to report on this and other pay equity laws as they develop.

Additional Pay Data Reporting Order Details

It’s here and it’s real.  The written order memorializing Judge Chutkan’s oral Order setting the September 30, 2019 deadline for collection of employer pay data reveals these additional details:

  • EEOC is ordered to collect EEO-1 Component 2 pay data for calendar years 2017 and 2018

Please find the full article in our Affirmative Action & OFCCP Law Advisor blog here.

Breaking News: Judge Orders EEOC to Collect Pay Data by September 30th

Judge Tanya S. Chutkan has ordered initial compliance with the EEO-1 pay data reporting obligation by September 30, 2019.

As we previously reported, the EEOC has informed the court it could complete collection of data by September 30th by utilizing the services of a third party vendor, though there would be quality and integrity concerns.  As proposed, the data collection would begin July 15th.

Please find the full article in our Affirmative Action & OFCCP Law Advisor blog here.

Colorado State Senate Affirms Equal Pay Law…Will it Pass in 2019?

Colorado legislators are only a few steps away from approving the Colorado “Equal Pay for Equal Work Act” (SB 19-085) and making Colorado the latest state to enact enhanced equal pay legislation.

Colorado’s 2019 Equal Pay Law, as originally introduced in January, would likely have been the most aggressive equal pay law in the nation. While the current bill would still be among the most stringent, hearings held on the law in February resulted in a number of employer-friendly amendments. Prominent among these changes was the addition of several defenses now available to employers to explain pay differences between employees such as geographic location, training, education, and travel.

During recent debate in the Colorado Senate, Republicans offered an amendment that would have removed the private right of action and kept enforcement of state equal pay violations with the Colorado Department of Labor and Employment. The amendment failed (16-19) along party lines, and no substantive changes have been made since the proposed law cleared committees in late-February. The Colorado Senate approved the final bill 20-14, with two Republicans joining 18 Democrats.

It is now a race against time for the bill to pass, as the Colorado Legislature is set to adjourn on May 3. SB 19-085 is scheduled for a hearing in the House Business Affairs and Labor Committee before moving to the House Floor for a final vote. Democrats (all expected to vote in favor of the law) hold a 41-24 advantage in the Colorado House. If the bill moves forward unchanged, it would then head to Governor Jared Polis, who is likely to sign it. However, if the House amends the bill, its fate becomes more questionable as it would have to return for re-passage by the Senate with only a few days left in the legislative session or be re-introduced at the beginning of 2020.

We will continue to monitor and report on this any other developments in equal pay laws.

Judge Orders Hearing in EEO-1 Pay Data Reporting Case

It appears employers will need to wait a bit longer to learn when they will be required to file their EEO-1 pay data.

In an order filed April 11, Judge Tanya S. Chutkan set a hearing for 2:00 p.m. Eastern on April 16, 2019 for the parties to present their cases regarding the government’s compliance with her order to reinstate the EEO-1 pay data reporting obligation.

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

EEO-1 Pay Data Reporting Update

In a status update filed April 3, 2019, the government informed the court that EEOC could complete collection of the required EEO-1 Component 2 pay data by September 30, 2019, but only if it utilized a third party data collector to do so.

The update was filed in response to Judge Tanya S. Chutkan’s request that the government provide the court with its plan to comply with her March 4, 2019 ruling that over-turned the stay on the pay data reporting obligation.

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

House of Representatives Passes Paycheck Fairness Act to Strengthen Equal Pay Act

Democrats in the U.S. House of Representatives continue to call for stronger protections to combat wage inequality. By a vote of 242-187, the House recently passed the Paycheck Fairness Act to enhance the federal protections guaranteed under the EPA.

Currently, to defend against an EPA claim, an employer can assert any of four defenses to justify paying men and women differently for the same work. Employers can pay workers at different rates if the wage differential is based on i) seniority, ii) merit, iii) quantity or quality of the employee’s work, or iv) any factor other than sex (sometimes referred to as a “catchall defense”).

The Paycheck Fairness Act, H.R. 7, amends the applicability of the last exception by requiring wage differentials to be based on a “bona fide factor other than sex, such as education, training or experience.” This “bona fide factor defense” would require employers to prove that wage differentials fully account for the “entire differential in compensation,” actually relate to the job and are consistent with business necessity, and are not based on or derived from existing gender-based wage disparities.

H.R. 7 also would afford enhanced anti-retaliation protections for employees who not only file pay discrimination claims, but who discuss their salaries with coworkers or initiate or participate in pay equity investigations and hearings. However, employers are not liable under H.R. 7 if an employee with access to wage information, as part of their essential job functions, discloses such information to other employees, unless the employee disclosed the information as part of a complaint or employer-directed investigation.

H.R. 7 would establish the Secretary of Labor’s National Award for Pay Equity in the Workplace to recognize employers for excellence in pay practices. Employers can also receive assistance in instituting compliance checks and modifying their equal pay practices. Lastly, H.R. 7 creates a grant program that would provide funds to eligible entities to design negotiation skills training programs for women and girls.

Support for the measure was divided largely along party lines. House Republicans criticized the bill as “designed for trial lawyers” and pushed to add language limiting attorney’s fees. Under H.R. 7, violators can be subject to enhanced penalties, such as compensatory and punitive damages.

In light of the political composition of the Senate, this bill is unlikely to gain the support needed to be enacted.

This is not the first time this bill has surfaced. Previous efforts to pass the Paycheck Fairness Act failed in the Senate in 2009 after passing in the House of Representatives.

States also continue to pass new fair pay laws.

Our Jackson Lewis Pay Equity Resource Group will continue to monitor these developments and provide guidance on compliance.

 

 

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