Monday, August 22, 2016

That is SO last week

Last week, a federal judge dismissed a transgender discrimination lawsuit brought by the EEOC, citing the company owner’s religious beliefs and the Religious Freedom Restoration Act.  The case involved the termination of a transgender woman who began presenting as a female during her employment at a funeral home chain.  The owner of the chain requested an exemption under the Supreme Court’s Hobby Lobby decision, stating that if the employee presented as a female she would be “violating God’s commands.”  No word yet if the EEOC intends to appeal.
In other developments:

Thursday, August 18, 2016

The Government Focus on Pay Equity

Wage gaps between the genders and among the races, although smaller than they were decades ago, remain significant in the United States. Among full and part-time workers, the median wages of women are 83% of the median wages of men, and the median wages of African-American workers is 75% of the median wages of white workers. In an effort to address these disparities, the EEOC and at least one state legislature have taken steps to spotlight pay equity issues.
The EEOC’s effort includes revamping the traditional EEO-1, an annual report required for all employers with more than 100 employees. The changes to the EEO-1 are significant, and require employers to examine and analyze wages at twelve different levels within pre-existing job categories. The basis for establishment of the twelve levels is unclear, and the increments range from as little as $5,000 to as much as $45,000.  Based on the Bureau of Labor Statistics’ Occupational Employment Statistics, employers will need to place and report every position and employee into the extensive new form. Employers have until March 2018, when the new form will first be required, to prepare human resources and payroll information systems for the change. The purpose of the enhanced EEO-1 is the identification and monitoring of pay disparities related to protected class status, which employers are expected to correct in order to remain in compliance with anti-discrimination law.
A number of states are considering pay equity legislation. Massachusetts recently passed a new law, effective July 2018, which prohibits employers from asking candidates about salary histories. Proponents of this legislation argued that if employers know an applicant’s salary history, wages will be set based on what the candidate earned before and that may perpetuate existing inequities. A lot has been said about this legislative prohibition, and it remains to be seen whether it will result in a smaller gap between the earnings of women and men.
Irrespective of whether an employer is in a state considering pay equity legislation, all should be aware of wage disparity issues, which may be evidence of unlawful discrimination. Regardless of their confidence in the fairness of their pay practices, employers with more than 100 employees should prepare for implementation of the new EEO-1.  Here are steps such employers should consider taking:
  • Perform a basic analysis of the wages currently paid. A report from a payroll provider or the company's human resources information systems can provide the necessary information, which should be sorted and analyzed based on the EEO job classifications already established on the EEO-1. 
  • With current wages in hand and sorted by job classification, determine whether there are any obvious race, national origin, or gender-related disparities. Are women in comparable roles paid more or less than men? Are Asian programmers paid more or less than Caucasian programmers doing essentially the same work? Are higher paying jobs disproportionately populated by employees of a particular gender, race, national origin, or other protected class status?
  • If disparities are noted, determine whether or not they exist for defensible, nondiscriminatory reasons. The Equal Pay Act allows for differences in pay if they are based on nondiscriminatory factors. Do differences in wages exist due to skill level, education, or level of responsibility? Are they based on the cost of living in a particular location? Are they based on seniority, and if so, does time in service actually add value? Will employees have the opportunity to earn comparable pay at some point in the future, or will the discrepancies exist in perpetuity? 
  • Determine if changes need to be made in order to avoid unlawful pay disparities, and remember that employers cannot cut employee wages just to equalize pay. It can be complicated and time-consuming to modify job classifications or a pay structure, but a Department of Labor audit or a lawsuit alleging discriminatory pay practices can cause even more headaches and expense.
  • Remember the importance of documenting this analysis, the reasons for disparities, and the corrective measures, if any, that have been taken. Explanations that are clear, consistent, and easy to understand will be helpful to an agency investigating potential discrimination and in the defense of claims of discrimination. 
Finally, because doing the analysis described above may uncover problems, consider having an attorney supervise. The involvement of legal counsel offers the chance to protect the findings of such an audit through attorney-client privilege. It can limit agency or opposing-party access to audit results, and may afford the employer the opportunity to correct problems and come into compliance without worrying about outside scrutiny.
Posted by Kate Bischoff

Monday, August 15, 2016

That is SO last week

Last week, Vanity Fair reported that the ongoing settlement talks between Gretchen Carlson and Roger Ailes may contemplate a settlement payment in the eight-figure range as more and more women claim sexual harassment by the former head of Fox News.  Some women allegedly recorded conversations with Ailes and assert that the recordings support their claims of repeated unlawful conduct.  These new allegations accompanied claims that Ailes used network funds to fight his personal battles.
In other developments:

Thursday, August 11, 2016

More Mythbusting

Here at the Navigator, we were very pleased by the positive reaction to last month’s post about employment law myths that can get employers in trouble, and we’re glad it was helpful.  Although the inaccurate beliefs described last month are among the most common we encounter, there are many more that can create liability for the unwary employer. 
“Hiring through an agency or third party means no worries about employment law.” This is a common misunderstanding, and one that is sometimes promoted – intentionally or unintentionally – by temp agencies, staffing services, and providers of leased employees.  The law is pretty clear on this: organizations that use workers provided by a third party agency or service are joint employers of those workers, and will be liable to the workers for violations of employment law that occur during the workers’ assignment to them. 
“We hire independent contractors – less paperwork for us, more flexibility for them.”  Workers are not independent contractors just because an employer wants them to be.  Similarly, the fact that a worker requests independent contractor status doesn’t make it okay for the employer to treat him or her that way.  The IRS, the Department of Labor, and individual states’ statutes and regulations control and define independent contractor status.
“We’re an EEO/AA employer.” All employers should be “EEO” employers; that is, they are required to abide by federal, state, and local anti-discrimination laws that require equal employment opportunity regardless of race, religion, gender, age, disability, and other protected class status.  But “AA”? Affirmative action, defined generally as positive action designed to remedy the effects of past discrimination, is not required of most employers.  Government contractors often have to adopt affirmative action plans, but absent a court order most other employers do not, and may violate the law by having a voluntary affirmative action plan.
“Disability discrimination laws only apply to permanent disabilities.” This misunderstanding of federal (and many state) discrimination laws has hung on for a long time.  In fact, applicants and employees affected by temporary illness or disability are protected by disability discrimination laws as long as the illness or disability is a “physical or mental impairment that substantially limits one or more major life activities.” An impairment that is “episodic” or “in remission” may qualify for protection, and even temporary, non-chronic impairments can qualify if they are substantially limiting.
“We’re non-union.  The National Labor Relations Act doesn’t apply to us.”  Although the NLRA contains lots of provisions that apply only to employers’ collective bargaining agreements with unions, that doesn’t mean non-union employers can ignore it.  The National Labor Relations Board has taken positions on protected concerted activity, social media policies, confidentiality policies, and joint employment that all employers need to understand.
We run into these myths frequently, often in our dealings with very well-intentioned employers.  Because they persist and because the consequences of believing them can be significant, we’ll keep trying to debunk them.
Posted by Judy Langevin

Monday, August 8, 2016

That is SO last week

Last week, Massachusetts became the first state to prohibit employers from asking about salary history before offering a candidate a position.  The law is designed to help close the gender wage gap. Supporters argued that gender inequities are less likely to be perpetuated if employers are not aware of an applicant’s salary history. The law includes two additional provisions related to pay. It makes it unlawful for employers to prohibit employees from talking about their pay, and it requires equal pay for work of “comparable character” or for employees who work in “comparable operations.”  The new law will go into effect in July 2018.
In other developments:

Friday, August 5, 2016

Recognizing and Managing Disparate Impact Issues

The law recognizes two forms of unlawful discrimination.  The most familiar is disparate treatment, in which an employee’s protected class status is a motivating factor in an adverse employment action. A less familiar, and sometimes confusing, form of unlawful discrimination is disparate impact discrimination.  This occurs when an employer’s apparently neutral policy, practice, or criterion disproportionately impacts applicants or employees of a particular protected class.  For example, a hiring policy that requires applicants to live within a mile of the employer’s location has no direct connection to race or ethnicity, but if the neighborhoods in that mile radius are overwhelmingly white, the facially neutral policy can make it significantly less likely that non-white applicants will qualify. 

Proof of disparate treatment – the more familiar kind – it requires a showing of employer intent to discriminate. Proof of disparate impact does not.  Employers can be held liable for the effect of their policies and practices on protected groups, regardless of their motivation.  In order to avoid liability in a disparate impact case, the employer must demonstrate that the policy, practice, or standard in question is job-related and a business necessity.

Most of the time, employers deal with concerns or claims of disparate treatment. Disparate impact generally only becomes an issue when groups of employees are affected by an action or policy.  It is almost never raised in situations involving a single employee.  Disparate impact can become a worry when an employer carries out a reduction in force, reduces salaries or hours for a group of employees, or adopts a new set of hiring criteria.  In any of these situations, an employer can be held liable for discrimination if a protected group is disproportionately impacted.

Disparate impact cases can be particularly alarming to employers because they involve claims by a large number of plaintiffs.  They are expensive to defend and the judgments paid by employers who are found to have engaged in disparate impact discrimination can be large.  Like disparate treatment claims, however, disparate impact claims can be avoided and, if necessary, defended.  Avoidance requires planning and attention to the potential effect of a planned policy or action.  Successful defense requires careful documentation of the non-discriminatory business reasons for the action or policy in question and a clear explanation of the business necessity that motivated the policy or action. 

Any time a personnel action or personnel policy is likely to impact a significant number of applicants or employees, employers would be wise to ask these questions:

  • What is the business reason for this policy or action? Is it sound? Is it documented? Will it be understood by individuals outside the circle of decisions-makers?
  • Is there an alternative policy or action that could produce the desired result? If so, has it been considered?

If the initial review of the likely results of the action or policy suggests that women, people of color, or employees over 40 will be impacted the most, employers should pause and do the following: 

  • Carefully review the circumstances to see if patterns are evident.  Is a particular supervisor recommending the selection of more women than men for a RIF? Is a new policy a reaction to circumstances better addressed directly? Are selection standards being uniformly applied?
  • Consider doing a statistical adverse impact analysis to determine the extent and legal significance of the disparate impact on protected groups.
  • Dig deeper if an adverse impact analysis produces results indicating that a particular protected group will be disproportionately affected. Make sure that there are no alternative actions or policies available that accomplish the same result without the disproportional impact.  Make sure that none of the individuals responsible for creating the policy or selecting those impacted by an action are motivated by considerations of race, gender, age, or other protected class status. 

Most HR professionals and in-house counsel are used to questioning the reasons for and validity of individual personnel actions.  It is second nature to consider and eliminate the possibility of discriminatory motivation.  To avoid the significant risks associated with disparate impact discrimination, it’s essential that personnel policies and actions that affect large groups be subject to the same scrutiny. 

Posted by Judy Langevin and Kate Bischoff

Monday, August 1, 2016

That is SO last week

Contrary to the EEOC’s position that sexual orientation discrimination is protected by Title VII’s prohibition on gender discrimination, the Seventh Circuit Court of Appeals held last week that existing law does not support that interpretation absent Supreme Court interpretation or Congressional action.  A split circuit panel wrote that it is bound by precedent and cited the fact that Congress has not acted to extend protections.  The General Counsel for the EEOC stated that he disagreed with the court’s decision.

In other developments: