Pay Equity is "Comp"licated | New Rules, New Reporting and Responding to the Rising Tide of Pay Discrimination Claims

WEBINAR Pay Equity is “Comp”licated

Pay Equity is “Comp”licatedNew Rules, New Reporting, and Responding to the

Rising Tide of Pay Discrimination Claims

Gary CowanDirector of Compliance, America's Job Exchange

Laura MitchellPrincipal

Jackson Lewis P.C.


About Laura Mitchell

Laura Mitchell is a Principal in the Denver, Colorado office of Jackson Lewis P.C. She is on the leadership team for the firm’s Government

Contractor Industry Group and a member of the firm’s Affirmative Action Compliance & OFCCP Defense practice group.

Laura spends a good deal of her time counseling government contractors on their ever-expanding compliance obligations.

Laura also assists clients with the drafting of affirmative action plans, representing government and non-government contractors in Office of Federal Contract Compliance Programs (OFCCP) matters, preparing

for and defending OFCCP audits, and counseling employers on issues stemming from OFCCP regulations.


Disclaimer

Jackson Lewis P.C. has prepared the materials contained in this presentation for the participants’ reference and

general information in connection with education seminars presented by the firm and its attorneys. Attendees should consult with counsel before taking any actions that could

affect their legal rights and should not consider these materials or discussions about these materials to be legal

or other advice regarding any specific matter.


Agenda

Awareness about “equal pay” has arrived

EEO-1 pay data reporting – what impact will a Trump presidency have on this rule?

Growing wave of aggressive state pay laws

Conducting a Pay Equity analysis


The Increased Focus on “Equal Pay”


Three “Big P’s” of Pay Equity


They Said What?

Pope Francis: “Why is it taken for granted that women must earn less than men? No! The discrepancy is a pure scandal.”

President Obama: “Women deserve equal pay. It’s 2016. It’s time.”

Patricia Arquette: “It’s our time to have wage equality once and for all.”


It’s All About the “Pay Gap”

Group NationwideWomen 79¢

African-AmericanWomen 61¢

Hispanic Women 55¢

For every $1.00 paid to men, how much is paid to . . .


Why Not More Claims?People Just Don’t Know

Employees don’t know what they don’t know about pay

Applicants don’t know what they don’t know about pay

The government doesn’t know what it doesn’t know about pay

You don’t know what you don’t know about pay


Shareholder Pressure to Achieve and Announce “Equal Pay”

Activist investor pressure to achieve “equal pay” and pay transparency

CEOs are telling HR and in-house counsel: “This is going to get done.”

Silicon Valley and other Fortune 500 companies feel increasing pressure to quickly conduct pay equity analyses

… and publish the results

• “I'm proud to share that at Facebook, men and women earn the same” - Lori Matloff Goler, Facebook, Inc.

• Black employees earn $1.003; Hispanic employees earn 99.9 cents; and Asian employees earn $1.006 for every $1 earned by White employees - Kathleen Hogan, Microsoft Corp.


Pressure from White House to Sign“Equal Pay Pledge”

57 companies (and counting) have signed the “White House Equal Pay Pledge,” announced

June 14, 2016•Amazon, American Airlines, Dow

Chemical, Gap Inc., Johnson & Johnson, Facebook, Apple, Microsoft

Signatories pledge to conduct annual pay analysis across entire

workforce•Privilege issues?

Will results of analyses be published?

White House seeking to increase pay transparency to

eliminate wage gap with public commitments and follow

through


White House “Equal Pay Pledge”

We applaud the growing number of countries that have already made significant progress in closing their gender wage gap. Women working full-time earn only 79 percent of men's wages, and we are committed to taking action individually and collectively to reduce that national pay gap.

We believe that businesses must play a critical role in reducing the national pay gap. Towards that end, we commit to conducting an annual company-wide gender pay analysis across occupations and embedding equal pay efforts into broader enterprise-wide equity initiatives. We pledge to take these steps as well as identify and promote other best practices that will close the national wage gap to ensure fundamental fairness for all workers.


EEO-1 Pay Reporting


EEOC Pay Data Reporting

Adds “W-2 earnings” and work hours for all employees to EEO-1 reports starting in 2018

• Workforce snapshot – pay period between Oct. 1 and Dec. 31 of reporting year instead of July - Sept.

Filing deadline now March 31 of every year instead of Sept. 30

• Who else can use the pay data? Unions, plaintiffs’ counsel, competitors, the press . . .

EEOC will publish pay data by industry and geography for employers to “benchmark” against


EEOC Underestimates Employer Burden

• HRIS, Payroll, Timekeeping Systems

Employers typically do not house W-2 earnings, hours worked, job, race/ethnicity and gender data in the same system

EEOC expects employers will write software programs to aggregate data across systems

• From 180 cells to 3,600 cells per establishment

Reporting burden will increase by 1,933%


What Impact Will the Election Have on this Rule?


However, Trump has said he supports equal pay for women,Trump’s daughter is an big equal pay advocate and

closing the “pay gap” has become a national priority

Election’s Impact on EEO-1Pay Data Reporting

Republican congress may push through

legislation blocking EEOC’s rule

EEOC’s Commissioners

are majority democrat, about to

change

Rule was an EEOC rule, not an Executive Order –

cannot be rescinded

unilaterally by Trump

Future is uncertain…


Growing Wave of Aggressive State Pay Laws


California Leads the Way…

California Fair Pay Act –effective January, 2016

Compares “substantially similar” employees – broader than federal standard of “similarly situated”

Compares employees across locations

Employers must explain “entire wage differential”

Attorneys’ fees for prevailing plaintiffs – CA robust wage-hour class plaintiffs’ bar jumping in

New Amendments just passed – effective January, 2017

Expands CFPA to include race and ethnicity

Cannot use salary at prior employer as sole justification for pay disparity


…And Other State Follow

New York Equal Pay Act

Codifies disparate impact theory in pay claims

Increases penalties – liquidated damages = 3x wages owed

Prohibits pay secrecy

Maryland Equal Pay for Equal Work Law

Expands protections to pay disparities based on gender identity

“Same establishment” includes facilities in the same county

Prohibits pay secrecy


Massachusetts “Out California’s” California

Equal pay for “comparable work”

Arguably more expansive than any other federal or state law

Cannot ask applicants – or current/former employers – for prior salary

Proactive Pay Audit as a “Safe Harbor”

If company completed proactive analysis in good faith within past 3 years – must be reasonable analysis

And, made reasonable progress towards eliminating pay disparities


States with Current Proposals for New or Expanded Equal Pay Laws

Alaska Arizona District of Columbia Georgia Hawaii

Indiana Iowa Kentucky Michigan Nebraska

New Jersey Ohio Oklahoma Pennsylvania Tennessee

Washington West Virginia


Prohibition on asking for Prior Salary Prediction – This is the Big One

Massachusetts – first state to ban asking for prior salary –effective July, 2018

CA – quickly amended CFPA to say prior salary cannot, by itself, explain pay disparity

• Fed Govt – House bill would prohibit employers from asking for prior salary• NYC – bill would prohibit asking for or searching publicly available records

for salary history• NJ – proposal would prohibit setting a min or max salary history as a

condition of being interviewed/considered

And in past few months other jurisdictions have proposed similar bans


Pay Equity for All Act of 2016

Introduced in the House September 14, 2016

• Asking for prior salary from prospective employees• Screening prospective employees based on salary history

Would prohibit

Fines up to $10,000 for each offense

Prospective or current employees can bring private action against employer and receive up to $10,000 in damages + attorney’s fees


Conducting a Pay Equity Analysis


So What Do We Do?

Consider privileged proactive pay analysis• On “meaningful” pay groupings • Control for factors that influence pay• Not all pay differences are a problem, most aren’t

But, when they are, plan to make pay adjustments• No lump-sum, off cycle adjustments• Do as part of regular pay cycle incrementally over a few years

Review pay system and processes


No Attorney Involvement

Sliding Scale of Privilege

Not Privileged Argument for Privileged Privileged

In-House Counsel (on surface)

In-House Counsel (substance)

Outside Counsel (on surface)

Outside Counsel (substance)


Keep Up-to-Date

For additional news and insights on developments in pay equity, visit our Pay

Equity Advisor blog: http://www.payequityadvisor.com/

http://www.payequityadvisor.com/


Questions for Laura?

For additional news and insights on the OFCCP and EEO compliance, visit our Affirmative Action & OFCCP Law Advisor blog:

http://www.affirmativeactionlawadvisor.com/

http://www.affirmativeactionlawadvisor.com/


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founded by the Department of Labor in 1995. We keep true to the original mission of America’s Job Bank assisting Federal Contractors meet OFCCP regulations for

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Clients choose America’s Job Exchange for OFCCP compliance because AJE offers a comprehensive solution for a great value.

CLIENTELE

TRACK RECORD

REPUTATION


Laura MitchellPrincipal,Jackson Lewis P.C.

[email protected]

Contact Information

www.jacksonlewis.com


Gary CowanDirector of Compliance,America's Job Exchange

[email protected](o) 978-946-7928(c) 617-997-6477

Contact Information

www.americasjobexchange.com


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Pay Equity is "Comp"licated | New Rules, New Reporting and Responding to the Rising Tide of Pay Discrimination Claims