California Issues Guidance on New Pay Data Reporting Requirements But Leaves Some Questions Pending

At the end of California’s 2020 legislative session, Governor Newsom signed Senate Bill 973 (SB 973), which created pay data reporting requirements for employers starting in March 2021. However, the new legislation left some uncertainty for employers in several areas.

The Department of Fair Employment and Housing (DFEH) promised in mid-October that it would be issuing a Frequently Asked Questions page to assist with compliance. On November 2, it did so—at least partially.  The current page includes additional information on whether the pay data may be released publicly (DFEH may release it, but only in aggregated form) and data privacy and protections (DFEH may not release individually identifiable information publicly).

Please find the rest of this article in our California Workplace Law Blog.

Public Comments Received on Proposed Rules Implementing Colorado Equal Pay for Equal Work Act

On November 2, 2020, the Colorado Department of Labor and Employments’ Division of Labor Standards and Statistics held a public hearing to solicit comments about Colorado’s proposed Equal Pay Transparency Rules.  The proposed rules will implement Colorado’s New Equal Pay for Equal Work law that goes into effect January 1, 2021.  The hearing focused on the rules concerning pay information in job postings and announcements of promotional opportunities.  The Division is continuing to collect written comments and will publish final rules on or before November 10th.

The comments presented during the hearing were focused on the following primary themes:

  • Providing clarity around the term “promotional opportunity.”  Specifically, that the rules should clarify that such an opportunity should only include competitive promotions and not “in line” or experience-based progressions.
  • The rules regarding required postings are impractical in that they do not contemplate the need for confidential job searches or use of executive search firms.
  • The rules could put Colorado-based companies at a competitive disadvantage as compared to non-Colorado companies, and will require disclosures of proprietary compensation strategies to competitors who may not be under same rules.
  • The rules could lead to national employers shifting work away from Colorado and/or restricting remote work so that employees could work anywhere, but Colorado.
  • The proposed requiring compensation and benefit information on job postings outside of the state and/or for jobs that will be performed outside the state exceed the Department of Labor and Employment’s authority and the rules should be limited to jobs located in Colorado.

There was also a discussion of the potential legal challenges being contemplated by employers, including potential violations of the U.S. Commerce Clause based on conflicting state laws.

The Division has received a lot feedback on these proposed rules (verbal and written).  We will be watching closely for the final rules to be published on or around November 10.

Colorado Department of Labor Releases Proposed Rules Implementing Fair Pay for Fair Work Law

On September 29, 2020, The Colorado Department of Labor and Employment published proposed Equal Pay Transparency Rules (“EPT Rules”) providing guidance for implementation of the state’s new Equal Pay for Equal Work Law set to go into effect January 1, 2021.  They also published a corresponding Statement of Basis, Purpose, Specific Statutory Authority and Findings.

The proposed rules address two general areas of the new pay law:

  1. Complaint, Investigation and Appeal Procedures

The proposed rules seek to set out the process for investigation procedures and protections and provides in depth detail for the process of complaint filings, service and deadlines, determinations and appeals.  The rule draws primarily from the Wage Protection Act Rules that govern the wage complaint process in Colorado.

  1. Job Posting Requirements

One of the most debated areas of the new law centers around the unique obligation for Colorado employers to provide compensation information and description of benefits on their job postings as well as make opportunities for promotions known to their employees.

The proposed rules provide additional guidance around the how employers can comply with the compensation disclosure requirement by instructing that

“Employers must include the following compensation and benefits information in each posting: (1) the hourly rate or salary compensation (or a range thereof) that the employer is offering for the position, including any bonuses, commissions, or other forms of compensation that are being offered for the job; and (2) a general description of all employment benefits the employer is offering for the position, including health care benefits; retirement benefits; any benefits permitting paid days off, including sick leave, parental leave, and paid time off or vacation benefits; as well as any other benefits that must be reported for federal tax purposes; but not benefits in the form of minor perks.”

The proposed rules go on to explain that

“[a] posted compensation range may extend from the lowest to the highest pay the employer in good faith believes it might pay for the particular job, depending on the circumstances. An employer may ultimately pay more or less than the posted range, if the posted range was the employer’s good-faith and reasonable estimate of the range of possible compensation at the time of the posting.”

With respect to promotional opportunities, the propose rules suggest that to comply with the requirement to make “reasonable efforts” to announce, post or otherwise make known all opportunities for post or otherwise make known all opportunities for promotion to all current employees . . .” the communication

“must be in writing and include at least (A) job title, (B) compensation and benefits per Rule 2.2, and (C) means by which employees may apply for the position.”

The proposed rule includes a description of “reasonable efforts” and explicitly states employers “may not limit notice to those employees it deems qualified for the position, but may state that applications are open to only those with certain qualifications.”

In the last section, the proposed rules provide much needed guidance on application of the notice requirement to positions to be performed outside of Colorado.  In the proposed rules the Department takes the position that for a role to be performed in Colorado “if the employer accepts applicants from outside Colorado, it must notify all of its employees in any state for whom the job would be a promotion” as well as include compensation and benefits on the posting.  The rules also proposes that if a Colorado employer has a job that can be performed anywhere (e.g. remote) or outside of Colorado, but posts the job by electronic means accessible in Colorado it must include compensation and benefits in the postings. The company must also notify its employees for whom the job would be a promotion.  Essentially, if a Colorado employee (or resident) can apply for the position (even if the role is outside of Colorado) the posting must comply with the transparency regulations.

As a reminder, these are proposed rules and subject to revision based on public comment.  As currently scheduled, the rules will be finalized just prior to the law’s January 1 effective date.  We will continue to monitor and report on any developments and the final rules when published.

Pay Data Reporting: California is the Tip of the Spear

In a continued effort to reduce gender and racial pay gaps, on September 30, 2020, California Governor Gavin Newsom signed into law Senate Bill 973, which creates massive pay reporting requirements for employers.  In 2021, certain California employers will be required to submit annual information on its employees’ pay data by gender, race, and ethnicity to the state’s Department of Fair Employment and Housing (DFEH).  A similar bill was introduced last year (following the EEOC’s court battle), but it failed to clear the necessary hurdles before the end of the legislative session. This year, however, it crossed the finish line.

Please find the rest of this article on our California Workplace Law Blog.

EEOC Announces Study of Collected Pay Data

In the next chapter of the EEO pay data collection story, the EEOC announced today it has contracted with the National Academies of Sciences, Engineering, and Medicine’s Committee on National Statistics (CNSTAT) to, “conduct an independent assessment of the quality and utility of the EEO-1 Component 2 data for FY 2017 and 2018.”

This is not an unexpected move and in large part, anticipated, especially after remarks by Commissioner Victoria Lipnic and others after the Agency collected the data as required by court order last year.

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

Virginia’s New Pay Transparency Law

Virginia has adopted a pay transparency law that prohibits employers from discharging or taking any other retaliatory action against an employee for discussing wages or compensation with another employee. The new law was passed on April 22, 2020, and becomes effective on July 1, 2020.

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

New Jersey Division on Civil Rights Releases Enforcement Guidance on State Equal Pay Act

The New Jersey Division on Civil Rights (DCR) has released a 25-page guidance explaining its enforcement policies with respect to the state’s equal pay law. The guidance provides much-needed direction to companies navigating the pitfalls associated with compensation systems and policies.

The guidance addresses questions ranging from multistate employees to affirmative defenses to the role of employer self-evaluations in the agency process.

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

Prior Pay No Defense to Pay Difference Under Equal Pay Act, Ninth Circuit Reaffirms

Prior pay, alone or in combination with other factors, is not a job-related “factor other than sex” that can be used to justify a difference in pay under the Equal Pay Act (EPA), a majority of judges on the U.S. Court of Appeals for the Ninth Circuit has held again. Rizo v. Yovino, No. 16-15372 (Feb. 27, 2020).

The Court previously reached this conclusion in 2018. On appeal to the U.S. Supreme Court, the Supreme Court remanded the case because the authoring judge (Judge Stephen Reinhardt) passed away before publication of the opinion.

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

BREAKING NEWS: Pay Data Portal Ordered Closed

It seems the end has finally come for at least one part of the pay data reporting story.  On Monday, February 10, Judge Chutkan ordered the EEO-1 Component 2 pay data reporting portal closed.  The closing of the portal signals the end of the required collection of pay data for 2017 and 2018 from eligible employers.

The direction for the next turn in the story hinges on what EEOC decides to do about collecting pay data going forward.  Stay tuned.

EEOC Renews Request to Close Component 2 Pay Data Portal

EEOC has filed another Motion with the court seeking an Order deeming Component 2 pay data collection complete.  In its most recent filing, EEOC requests the Court to revisit its previous decision and deem the collection obligation satisfied or, in the alternative, provide clarification “regarding the response rate at which the Court will deem the EEOC’s collection to be complete.”  As a reminder, EEOC’s previous motion requesting the permission to close the portal was denied.

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