By Annette Tyman, Randel K. Johnson, and Michael L. Childers

Seyfarth Synopsis: The U.S. District Court for the District of Columbia vacates the Office of Management and Budget’s (OMB) prior order staying the implementation of the revised EEO-1 Report which required employers to report W-2 wage information and total hours worked.

On March 4, 2019, the U.S. District for the District of Columbia issued an opinion reinstating the EEOC’s collection of pay data as part of the EEO-1 Report filing. The revised EEO-1 form was an Obama-era change that would have required employers with 100 or more employees to report W-2 wage information and total hours worked for all employees by race, ethnicity and sex within 12 proposed pay bands.

The pay data collection requirement was originally slated to go into effect on March 31, 2018, but stalled after the Office of Management and Budget (OMB) stayed the implementation of the pay data collection portions of the revised EEO-1 Report. That decision prompted a lawsuit by the National Women’s Law Center and the Labor Counsel for Latin American Advancement against the OMB and the EEOC.

In its decision, the Court concluded that OMB’s action staying the EEOC’s pay data collection tool was an “illegal” arbitrary and capricious decision that lacked a “reasoned explanation.” As a result, the Court vacated the stay and ordered that the previously approved revised EEO-1 Report that required the collection of pay data form shall be in effect. We anticipate that the Court’s decision will be appealed.

Seyfarth Shaw offered testimony on behalf of the U.S. Chamber of Commerce and submitted comments on the revised EEO-1 Report outlining the employer community’s significant concerns with the burden, benefit, and confidentiality of the proposed changes. In early 2017, the U.S. Chamber of Commerce submitted a request for a review of the initial burden estimate along with a supporting declaration and testimony regarding the burden estimates which helped prompt OMB’s decision to suspend the implementation of the pay data collection requirement.

Impact to Employers

The Court’s decision has significant implications for employers. As we have previously reported, the current EEO-1 Report filing deadline is on May 31st. That filing did not envision the collection of pay data.

We anticipate that the EEOC will issue a statement to employers regarding the stay with further direction regarding the implementation date of the pay data collection component of the EEO-1 Report in the very near future. It is highly unlikely that employers would be required to provide the required pay data during the May 31st reporting cycle.

We will continue to monitor the situation and will provide updates as they become available.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Organizational Strategy & Analytics or Labor & Employment Teams.

 

Today, April 10th, is Equal Pay Day. At Seyfarth Shaw, we are commemorating Equal Pay Day with the release of two publications (click through below).

  1. The Trends and Developments in Pay Equity Litigation Report

This publication provides a brief overview of recent trends and developments in pay equity litigation and analyzes significant decisions and filings that have had an impact on those issues.

  1. The 2018 50 State Pay Equity Desktop Reference

This Desktop Reference was aimed at answering the most common questions we are asked about regarding the patchwork of different state laws that touch on pay equity.

We hope that you will find these resources helpful as you navigate the rapidly developing landscape of pay equity legislation and decisional law.

Please feel free to reach out to your Seyfarth attorney, members of Seyfarth’s Pay Equity Group, or the Group’s co-chairs Annette Tyman and Christine Hendrickson, with any questions.

Seyfarth Synopsis: Seyfarth Shaw’s Pay Equity and International Law Groups celebrated International Women’s Day a day early with a webinar on Wednesday, March 7, 2018 entitled “Pay Equity Around the Globe”.

Tessa Cranfield, Marjorie Culver, and Christine Hendrickson had a crowd for the webinar on global pay equity but in case you missed it, here are the slides from the webinar. Some of the highlights of the webinar included:

  • A discussion of the key trends in global pay equity, which included strengthened anti-discrimination laws, pay transparency, and pay reporting requirements;
  • An overview of key pay equity laws in Europe (focusing on Iceland, Germany, France, and the United Kingdom) and APAC and LATAM (focusing on Australia, China, India, and Brazil); and
  • Practical tips on how to undertake global pay equity analyses, focusing on the “who”, “what”, and “how” to conduct these reviews.

If you are considering undertaking a global pay analysis — and is there a better way to celebrate International Women’s Day? — reach out to Seyfarth’s Pay Equity Group and they will be happy to guide you through this process.

By Christine Hendrickson, Annette Tyman, Hillary Massey, and Monica Rodriquez

50 State Pay Equity Desktop Reference: What Employers Need to KnSeyfarth Synopsis: Today, April 4th, is Equal Pay Day.  In commemoration, Seyfarth’s Pay Equity Group  is introducing a 50-State Pay Equity Desktop Reference.

Pay equity may be on the minds and lips of your employees today, as today is Equal Pay Day.

Equal Pay Day originated more than 20 years ago as a public awareness event to symbolize how far into the year women must work to earn what men earned in the previous year.  While we’ve previously examined the basis of the statistic that underlies the event, there is no doubt that pay equity has become a high priority for employers, as administrative agencies and a patchwork of states have aggressively moved to address pay equity and enforcement.  What used to be a sleepy, little-discussed event has now become major news.

At Seyfarth Shaw, we are marking Equal Pay Day with the release of the first annual 50-State Pay Equity Desktop Reference.  This Desktop Reference was aimed at answering the most common questions we are asked about regarding the patchwork of different state laws that touch on pay equity, including:

  • Who is protected?
  • What type of work must be compared?
  • May employers rely on geographic location to explain pay differences?
  • What is the statute of limitations?; and
  • May employers ask about salary history?

Seyfarth Shaw at Work (SSAW) offers a more comprehensive 50-state survey, which is updated quarterly.  For additional information about the comprehensive survey, please email payequity@seyfarth.com.  The Desktop Reference also provides more information about undertaking a proactive equity audit and the lifecycle of such an audit.

Seyfarth’s Pay Equity Group leads the legal industry in fair pay analysis, thought leadership, and client advocacy.  For more than twenty years, we have partnered with our clients to proactively address these developments and minimize risk.  Seyfarth also recently testified before the Equal Employment Opportunity Commission on behalf of the U.S. Chamber of Commerce, requesting the EEOC withdraw its proposal to require employers to report data on compensation and diversity through the EEO-1 report.  For questions, contact the authors, Christine Hendrickson, Annette Tyman, Hillary Massey, and Monica Rodriquez, or your Seyfarth attorney with whom you regularly work.

By Mark Casciari and Meredith-Anne Berger

Seyfarth Synopsis:  The 2016 elections had the effect of hardening the Red-Blue divide in the country.  A number of Blue cities in Red States are enacting ordinances that implement the progressive political agenda, which of course includes pay equity.  Be prepared to see that the Red states in which they lie may attempt to preempt local ordinances.  Red State preemption of Blue city ordinances is yet another battle that is likely to be resolved in court.

The 2016 Presidential, state and local elections across the country reinforced the Red-Blue divide simmering for years.  As a consequence, many Red State legislatures have rushed to enact their agendas before Republican dominance wanes.  In reaction, Blue cities and counties in Red States have enacted their own progressive ordinances or rules.  One area of progressive activism is pay equity — the broad idea that employers need to do more to ensure equal pay for equal work.

Examples of Blue city/Red State progressive activism are plenty. For example, a Philadelphia ordinance bans inquiries into prospective employee salary histories.  Austin, Texas has enacted protections for prospective employees with criminal histories, in an effort to augment job earnings by enhancing equality among applicants.  St. Paul, MN, and Minneapolis, MN have recently passed employee-friendly paid sick leave laws.  It is reasonable to expect more Blue city/Red State activism in the pay equity and broader discrimination context in the Trump era.

There is, however, a movement afoot to counter Blue city and county legislation enacted to further progressive goals that conflict with the political agendas of the Red States in which the Blue cities lie. For example, Arkansas’s Act 137 prohibits a county, municipality, or any other political subdivision from adopting or enforcing any ordinance or rule that creates a “protected classification or prohibits discrimination on a basis not contained in state law.”  On February 23, 2017, the state’s highest court struck down a Fayetteville anti-discrimination ordinance that sought to extend Arkansas’s anti-bullying statute to prohibit discrimination in the workplace on the basis of sexual orientation and gender identity.  The court, however, did not address whether Act 137 is constitutional.  In North Carolina, the Public Facilities Privacy and Security Act (“HB2”) prohibits any city or municipality in the state from enacting a law that would prohibit discrimination in employment or in public accommodations on the basis of gender identity or sexual orientation.

Not to be outdone, on February 8, 2017, the Pennsylvania Senate passed S.B. 241, which seeks to preempt Philadelphia’s law prohibiting salary inquiries and further prohibitions on discrimination in pay on the basis of gender.  Proposed legislation in Minnesota, H.F. 600, seeks to preempt local laws which provide employees with paid or unpaid leave time and other employment protections.  Proposed HB 577 in Texas would preclude a city or county from adopting or enforcing ban the box legislation applicable to private employers.  Proposed legislation in Arizona would permit the State Legislature to rescind funding to local governments that passed legislation which, in the Attorney General’s view, violated state law or the state constitution.

This article does not address whether state preemption laws will be upheld after court challenge, but simply exposes that a Blue city/Red State preemption issue might arise in future pay equity litigation. Readers should be aware that a Blue city or county law mandating pay equity could be preempted by Red State law, and that such a State preemption statute may itself be subject to challenge in court.  This issue might be rendered moot, of course, if the Congress of the United States enacts further national pay equity standards, and in the course of doing so preempts all related state and local law.  ERISA includes a similar preemption provision in the private sector employee benefit plan context. See 29 U.S.C. § 1144 (a) (absent specified exceptions, ERISA preempts all state law, defined to include the law of its political subdivisions, merely “relating to” an employee benefit plan covered by ERISA).  But don’t expect the current administration in Washington to be in the mood to broaden existing preemption of the authority of the States.  A more sound expectation is further litigation in the Blue city/Red State context over Blue city ordinances addressing such progressive concerns as pay equity.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Teams.

 

On April 8, President Obama signed an Order amending Executive Order 11246 to prohibit federal contractors from retaliating against applicants or employees who share information about their pay.  The amendment was touted by the administration as a “critical tool to encourage pay transparency.”  Please click HERE to read the “One Minute Memo” authored by our colleagues on the OFCCP and pay equity teams.

By Paul Kehoe

Earlier this week, the U.S. Senate Committee on Health, Education, Labor & Pensions (HELP) held an important full committee hearing on The Paycheck Fairness Act (S. 84), which would expand the scope of the Equal Pay Act in an effort to resolve alleged pay disparities between men and women. Seyfarth’s Camille Olson testified at the hearing on behalf of the U.S. Chamber of Commerce, where she serves as Chairwoman of its policy advisory committee on equal employment opportunity. Olson appeared on a panel of Senate witnesses which included professor Deborah Thompson Eisenberg from the University of Maryland’s Francis King Carey School of Law; ReShonda Young, a small business owner and manager from Iowa; and Kerri Sleeman, a mechanical engineer from Michigan.

Representing the Chamber, the world’s largest business federation of more than 3 million businesses and organizations of every size, industry sector and geographical region, Olson raised three primary concerns over the Paycheck Fairness Act. According to Olson’s testimony, the Chamber strongly opposes the Act because, if passed, it would further expand remedies under the Equal Pay Act to:

1) Impose harsher, “lottery-type” penalties of unlimited compensatory and punitive damages, upon all employers, regardless of size, and without a showing of intentional sex discrimination;

2) Effectively eliminate the factor other than sex defense; and

3) Provide a more attorney-friendly class action device, among other amendments.

Following this Senate HELP Committee hearing, Senate Majority Leader Harry Reid (D-Nev.) has scheduled a Senate floor vote for Tuesday, April 9. Olson’s testimony, notably, marks the third time that a Seyfarth attorney has testified before Congress regarding the Paycheck Fairness Act.

By Christine Hendrickson

On July 18,  House Minority Leader Nancy Pelosi and a contingent of female US Representatives announced federal legislation designed to make it easier for women to gain economic security, higher wages and additional support to care for their families, click HERE.   To read more about the initiative:  When Women Succeed, America Succeeds: An Economic Agenda for Women and Families, click HERE

The topic of pay equity also surfaced recently in the wake of has Facebook’s COO Sheryl Sandberg’s book: “Lean In: Women, Work, and the Will to Lead.”  Even if you’ve just caught the headlines, it is likely that you’ve asked yourself, what exactly should employers do in response to pay equity or the  “Lean In” movement?

According to Sandberg: a lot.  One of the key barriers identified by both Pelosi’s proposed legislation and Sandberg is the “pay gap” between women and men.  The good news for employers is that fairness in pay is an area where early detection and intervention can most easily reduce or eliminate an employer’s risk.

Here’s what employers and their lawyers can do about the pay gap now:

Get Proactive 

Conducting a proactive pay equity analysis is often the first and best step employers can take to ensure fair pay and diminish legal risk. 

But what should you do if you identify significant pay differences between men and women?  First, resist acting before you know more.  Consider if there are other factors that may not have been part of the original analysis.  Does one group of production managers support a team of ten and another a team of three?  Are there other material differences in scope and responsibilities that are not captured by the electronic data that fed the compensation analysis?   Are revenue-generating employees paid more?  Was this included in the regression analysis?

Many differences that appear unexplained upon first pass, are legitimate and non-discriminatory.  Thoroughly explore these first.  But what if you still cannot explain differences even after a full review?  You should then consider making remedial adjustments to ensure internal fairness.

Even when you are acting proactively, it is still critical to take steps to avoid putting the company at unnecessary risk.  Any analysis should be conducted with the advice of counsel and under the attorney-client privilege.  Conducting a multiple regression analysis, developing the appropriate employee groupings, determining the factors that most explain pay in your workforces, adjusting the model, and interpreting the results are not for the faint of heart.  You are wise to partner with experienced counsel who routinely conduct these analyses.  Also, consider timing issues.  Equity adjustments are usually best timed to align with the annual compensation cycle, so as to limit raising suspicion that may prompt law suits.

Now is a great time to undertake a pay assessment.  Federal and state civil rights agencies have taken a renewed interest in pay equity in the last year.  Both the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) have 2013 initiatives targeting employers with compensation disparities. 

Beef up Sponsorship 

Sponsorship and mentorship programs are a critical piece of the workplace fairness puzzle.  As Sandberg notes in Lean In: “Both men and women with sponsors are more likely to ask for stretch assignments and pay raises than their peers of the same gender.” 

As differences in rates of sponsorship can have an impact on pay, as the research Sandberg cites indicates, employers are smart to take a harder look at their sponsorship and mentorship programs to ensure that women have equal opportunities to participate and particulate at proportionate rates.  Employers who fail to correct perceived or actual disparities in the availability of sponsorship opportunities for women become targets for employment discrimination litigation. 

But what if you want to do more?  Can you create women-only sponsorship programs?  Creating sponsorship and mentorship programs that target only high-potential women can be highly effective but employers should be careful before jumping to implement these programs.  Sponsorship programs aimed only at high-potential female talent should be undertaken only when the employer is correcting a “manifest imbalance” of women at the company, or at certain levels or certain departments within the company, and then only when the program is intended to be a time-limited and targeted fix.

Determining whether these requirements are met is tricky and employer-specific and best undertaken with the advice of counsel.

Create Career Jungle Gyms 

Creating career on-and-off ramps and building career jungle gyms, rather than straight career ladders is another step employers can take. While employers are unlikely to face lawsuits because they maintain a traditional career-ladder approach, they are likely to miss key talent.  Embracing a less linear approach to career progression – what Sandberg calls a career “jungle-gym – is likely to attract and retain important talent and, at the same time, will help narrow the pay gap between men and women.  A win/win.

If you do not know where to start, survey trusted leadership in your organization. If you understand the barriers, you can work to remove them.  Often small, but targeted changes can go a long way to creating an organization that fully supports the success of employees of all stripes.