Today, the United States District Court for the District of Colorado issued a long-awaited ruling on a motion to enjoin the recently enacted Colorado Pay Equity Transparency Rules.

These rules were first proposed in September 2020, finalized in November 2020, clarified in December 2020, and became effective January 1, 2021.

They are far reaching. But in short, they require that employers (1) include pay and benefit information in the job posting and (2) provide specific written notices regarding all “promotional opportunities”—including those involving non-competitive “in-seat” promotions for any employee, anywhere in the company—to Colorado employees before making a promotion decision. The Rocky Mountain Association of Recruiters sued to enjoin the new rules. And today the Court denied the injunction.

Upon preliminary review, it seems the decision largely came down to a lack of evidence in support of plaintiff’s arguments. This may open the door for the case to develop the facts on the relative burdens and benefits. So it may not be over yet.

But for now, we expect the Colorado Department of Labor and Employment to continue enforcing these rules. And we’ve already seen these enforcement efforts begin.

We will continue to monitor for additional developments and provide updates as we learn more.

For additional information or to discuss how Colorado’s Equal Pay Transparency Rules might affect your promotional and job posting processes, please contact a Jackson Lewis attorney.

As California moves toward a tentative reopening date of June 15, employers may be considering bulking up their workforce again. If hiring new employees, employers should consider the guidance issued by the California Commission on the Status of Women (“Commission”), regarding starting compensation.

The guidance from the Commission first sets forth the applicable California statutes that apply to compensation.

Under California labor Code section 432.3(e), employers are prohibited from:

  • Seeking salary history from applicants
  • Relying on salary history information to determine whether to offer employment or what salary to offer
  • Relying on prior salary to justify the disparity in compensation

The Commission guidance also includes suggested practices for setting starting salaries including:

  • Determining the company’s compensation philosophy. This includes determining what the company thinks about compensation, what the company values about employees, and what factors are important in recruiting new hires such as experience, training, relevant skills, etc.
  • Evaluating internal equity. The Commission explains this as considering what current employees are making that do substantially similar work as a new hire. Employers should consider performing a gender and race/ethnicity-based analysis of pay for current employees in substantially similar jobs.
  • Formulating questions to ask applicants to assess whether the company and the applicant’s expectations align, without asking about prior salary.
  • Setting salary ranges in advance of interviewing applicants.

It is important that employers document the factors they consider in setting each employee’s pay upon the time of hire. This is not only recommended to ensure that the decision process aligns with the company’s compensation philosophy but can serve as support should an employee bring a claim alleging there was a violation of the Equal Pay Act.

Jackson Lewis can assist employers with conducting a self-audit of their compensation structure or pay equity analysis, as well as defending when a claim is brought alleging violations of the Equal Pay Act. If you have questions about structuring starting compensation or pay equity issues, contact a Jackson Lewis attorney to discuss.

A lawsuit brought by female professional soccer players against the United States Soccer Federation (USSF) may be settled, partly.

In 2019, female professional soccer players on the United States Senior Women’s National Team, including well-known players like Megan Rapinoe, filed a collective action in federal court in California alleging the USSF violated the players’ rights under the Equal Pay Act (EPA) and Title VII of the Civil Rights Act.

Please find the rest of this article on our Collegiate & Professional Sports Law Blog.

An amendment to the Illinois Equal Pay Act of 2003 requires that, beginning March 23, 2024, employers with more than 100 employees in Illinois must certify compliance with the Equal Pay Act by obtaining an Equal Pay registration certificate from the state Department of Labor.

Under the amendment signed by Governor J.B. Pritzker on March 23, 2021, businesses must pay a $150 filing fee and submit a statement of compliance with equal pay to the Department of Labor for certification. To obtain the certificate, businesses required to file a federal EEO-1 report (generally companies with more than 100 employees) also must include a copy of their most recent EEO-1 report, and additionally submit a list of all employees in the past calendar year, categorized by gender and race/ethnicity with corresponding wages paid to each employee over that period. Figures are to be calculated to the nearest hundred dollars.

Please find the rest of this article on the Jackson Lewis Publications Page.

State legislatures continue to pass laws designed to enhance pay equity and transparency, with the laws of California and Colorado effective in 2021. The California law requires employee pay data reporting by race and gender, and the Colorado law requires robust pay and promotional transparency.

California

Under California’s pay data reporting law (SB 973), most employers with employees in California must file a report of employee pay data by March 31, 2021.

Please find the rest of this article on the Jackson Lewis publications page.

As yet another confirmation that pay equity will be a priority for the Biden-Harris administration, the proposed Paycheck Fairness Act has been reintroduced in the U.S. House of Representatives as H.R. 7.  The proposed legislation has a long history but has never been given a vote in the Senate – it last passed in the House of Representatives in 2019.

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

California SB 973 requires employers that (1) file EEO-1 reports and (2) employ more than 100 employees to submit data to the California Department of Fair Employment and Housing (DFEH) annually that shows pay by race and gender for their California employees. It was signed into law on September 30, 2020, and DFEH has been busy providing guidance to employers and preparing the pay data reporting portal.

Additional — perhaps final — guidance was released on February 1. DFEH posted FAQs addressing Professional Employer Organizations and Acquisitions, Mergers, and Spinoffs.

It also released a 68-page User Guide that discuss the mechanics of data submission and provided templates (both in Excel and CSV format) to assist employers in submitting their required pay data.

Key takeaways from the new guidance include:

  • The pay data report will be finalized as a line-by-line report using the provided templates (either in Excel or CSV) or manual entry, depending on the employer’s preference.
  • Each employer will upload only one file.
  • Section One of the file will include overall company information, such as the snapshot period’s begin and end dates, total U.S. and California employees, total U.S. and California establishments.
  • Section Two will include information about each establishment and the employee detail within each establishment.
  • For each establishment, the employer will enter a separate line indicating the number of employees falling into each of the possible 2,520 combinations of job category, pay band, and race/ethnicity/sex.
  • DFEH reiterated that employers’ pay data reporting information will not be made public.

The Data Submission Portal will open on February 15, 2021, and submission is required by March 31.

If you have questions about the requirements under SB 973, would like to discuss how to prepare for this annual pay data report, or would like insight into the possible ways that DFEH may analyze this data submission, please contact a Jackson Lewis attorney.

Jackson Lewis attorneys will continue to monitor California’s pay data reporting and other pay equity issues.

California’s Department of Fair Employment and Housing (DFEH) continues to advance toward the March 31, 2021 pay data collection deadline.  When SB 973 was passed in September, DFEH had six months to develop and implement a data collection system that could accomplish the task.  It is delivering.  DFEH issued its first guidance on November 2 and released more FAQs on November 23.  And now, DFEH has again released new FAQs and updated its pay data reporting website.

According to the DFEH, the User Guide and Template are anticipated to be available on February 1, 2021.  In addition, the Data Submission Portal will be available on February 15, 2021.  The new FAQs also cover these, and other, important topics:

  • What pay to include in the report (the value reported in the Box 5 of the employee’s W-2, reflecting “Medicare wages and tips”);
  • What to do if the company issues a corrected W-2 (update the pay data report with the state);
  • Whether it report should include paid time off in the hours worked calculation (it should);
  • How to calculate hours worked for exempt employees (either actual hours worked or number of days worked multiplied by the average number of hours worked per day).

If you have questions about what SB 973 requires or would like to discuss how to prepare for this annual pay data reporting—or even options for assistance with report preparation, analysis, and submission—please contact a Jackson Lewis attorney to discuss.

Jackson Lewis attorneys will continue to monitor California’s pay data reporting and other pay equity issues.

As anticipated, the Colorado Department of Labor and Employment (CDLE) issued an Interpretive & Formal Opinion (INFO) – “Transparency in Pay and Opportunities for Promotion and Advancement”.  While the INFO is helpful in some respects, CDLE continues to take a hardline on the definition of “promotional opportunity”.

We continue to digest the guidance but the highlights include clarifying that a “promotional opportunity” exists “when an employer has or anticipates a vacancy in an existing or new position that could be considered a promotion for one or more employee(s) in terms of compensation, benefits, status, duties, or access to further advancement.”

Further to this point, the INFO states that:

  • A vacancy in a new position exists when an employer:

(1) adds a position; or

(2) gives an existing employee a new position, including by changing their title, and/or materially changing their authority, duties, or opportunities.

  • A vacancy in a new position includes a lateral job change, or a promotion along a fixed, in-line career trajectory, for which a current employee is eligible.

Based on the following CDLE example, it is difficult to imagine an instance not covered by the Rules:

An employer automatically advances every Apprentice 1 to an Apprentice 2 when the employee passes a competency test. An Apprentice 2 has more advanced duties, higher pay, and access to future promotions unavailable to an Apprentice 1. This advancement is a promotion to a new position because the employer is creating an Apprentice 2 position each time it advances an Apprentice 1. However, if the promotion is promised in writing upon hiring in conformity with EPT Rule 4.2.5(B) , it may be exempt from the duty to provide notice of the promotional opportunity to other employees.

The INFO further confirms that while multi-state employers need not include compensation or benefits in notices to Colorado employees for positions outside of Colorado, it must notify Colorado employees of such promotional opportunities.

We will continue to digest the INFO guidance and provide updates soon.

We have learned that the Colorado Department of Labor & Employment anticipates publishing next week additional guidance on the Equal Pay Transparency rules’ promotional posting requirements.  In response to a request for clarification around in-line promotions, the CDLE informed us:

We believe your questions will be addressed by a forthcoming Interpretive Notice & Formal Opinions (“INFO”), which we expect to release next week. In addition to addressing your questions, this INFO will provide other clarification on the manner and timing of promotional opportunity notices.

We are anxiously awaiting this additional guidance and hope it will clarify the ambiguities and address the concerns raised by the EPT rules.  We will be sure to let you know when the “INFO” has been published.