Law and the Workplace

Toledo, Ohio Passes Ban on Salary History Inquiries

Toledo, Ohio is the latest jurisdiction (and the second city in Ohio) to enact a law that will prohibit employers from asking job applicants about salary history.

The ordinance, which is scheduled to take effect on June 25, 2020, will apply to employers with fifteen or more employees in Toledo, and will prohibit such employers and their agents from:

  • inquiring about the salary history of an applicant for employment;
  • screening applicants based on their current or prior wages or other benefits or compensation, or requiring that salary history satisfy minimum or maximum criteria;
  • relying on salary history in deciding whether to extend an offer of employment, or in determining the salary, benefits, or other compensation for an applicant during the hiring process, including the negotiation of an employment contract; and/or
  • refusing to hire or otherwise retaliating against an applicant for not disclosing his or her salary history.

In addition, upon the reasonable request of an applicant who has received a conditional offer of employment, an employer will be required to provide the pay scale for the position.

For purposes of the ordinance, “applicant” is defined broadly to mean any person applying for employment to be performed within Toledo or whose application, in whole or in part, will be “solicited, received, processed, or considered in the City of Toledo, regardless of whether the applicant is interviewed.”  “Salary history” means an applicant’s current or prior wages, benefits, or other compensation, but does not include any objective measure of the applicant’s productivity, such as revenue, sales, or other production reports.

While the term “inquire” includes oral or written requests as well as searches of publicly available records, employers may verify an applicant’s non-salary related information or conduct a background check, so long as they do not consider or rely upon any salary history information that may inadvertently be obtained.

Notably, the ordinance’s prohibitions do not apply to “voluntary and unprompted” disclosures of salary information by applicants.  The ordinance further permits employers to engage in discussion with applicants about their expectations with respect to compensation, including but not limited to unvested equity or deferred compensation that may be subject to forfeiture or cancellation.

The ordinance also excludes from coverage: (1) applicants for internal transfer or promotion; (2) positions for which compensation is determined pursuant to collective bargaining; (3) actions taken by an employer pursuant to any federal, state or local law that specifically authorizes the reliance on salary history to determine an employee’s compensation; and (4) former employees who are re-hired by the same employer within five years of termination, provided that the employer already has any past salary history information regarding the applicant from the individual’s previous employment.

Applicants alleging a violation of the ordinance will have a private right of action.  Available remedies will include compensatory damages and attorney’s fees and costs.

In advance of the June 25, 2020 effective date, employers in Toledo should begin taking steps to ensure compliance by training human resources and other relevant personnel on these new requirements.

California Enacts Law Prohibiting Hairstyle Discrimination … with New York and New Jersey Close Behind

UPDATE: Governor Andrew Cuomo signed the New York bill into law on July 12, 2019 (effective immediately).

As we have reported before, California is set to become the first state to prohibit employers from discriminating based upon hairstyle. Last week, Governor Gavin Newsom signed into law the “CROWN Act” (Create a Respectful and Open Workplace for Natural Hair).

The CROWN Act amends the state’s Education Code and Government Code to define “race or ethnicity” as “inclusive of traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.” The new law expressly defines “protective hairstyles” as including but not limited to “braids, locks, and twists.”

Introduced by Sen. Holly Mitchell (D-Los Angeles), the CROWN Act “protects the right of Black Californians to choose to wear their hair in its natural form, without pressure to conform to Eurocentric norms,” Mitchell said. Governor Newsom called the law “long overdue,” and the bill passed both the Senate and the Assembly unanimously. The new law takes effect on January 1, 2020.

Meanwhile, on the East Coast, both New York and New Jersey also are advancing laws that would protect against hairstyle-based discrimination.

In New York, SB 6209 would amend the definition of “race” under the New York State Human Rights Law (NYSHRL) to include “traits historically associated with race, including but not limited to, hair texture and protective hairstyles,” thus making it unlawful under the NYSHRL to discriminate on the basis of such traits in employment, as well as housing and in public accommodations.   The bill also would extend similar protections to students covered under the state’s Education Law.

Similarly in New Jersey, SB 3945 would expand the definition of “race” under the New Jersey Law Against Discrimination (which also prohibits discrimination in employment, housing, and public accommodations) to include “traits historically associated with race, including, but not limited to, hair texture, hair type, and protective hairstyles.”

Like the California law, the New York and New Jersey bills define “protective hairstyles” to include hairstyles such as braids, locks, and twists.

The New York bill is currently before Governor Andrew Cuomo, who is expected to sign.  The New Jersey bill is still being considered by the state Senate and Assembly Labor Committees.  Both bills, if signed, would take effect immediately.

The Clock Is Ticking: Less Than Three Months Until the NYS Deadline for Mandatory Sexual Harassment Prevention Training

As we find ourselves in the midst of summer, employers in New York should keep an eye on the upcoming October 9th deadline for providing anti-harassment training to all employees.

As we previously reported, effective October 9, 2018, all New York State employers are required to adopt written sexual harassment prevention policies and institute annual anti-harassment training for employees. To satisfy the training requirements, employers may either: (1) adopt the State’s model training script, slides, and/or case studies; or (2) provide other live training or interactive online/video training that meets or exceeds the law’s minimum standards for training. Employers must train all employees – including exempt, non-exempt, part-time, seasonal and temporary employees – on or before October 9, 2019. And, according to the State’s guidance, employers also need to train employees who “work[] a portion of their time in New York State, even if they’re based in another state.”

As a reminder, employers in New York City must also comply with the Stop Sexual Harassment in NYC Act’s training requirements, which went into effect on April 1, 2019. While there are many similarities between the State and City law requirements – including the requirement that the training be interactive – the City law also requires that employees be trained on bystander intervention. And like the State’s guidance, the City’s guidance similarly extends an employer’s training obligation to employees who are connected to New York City “in any way.” This includes (1) employees who work or will work in New York City; (2) employees who work a portion of their time in New York City; and (3) employees who are based elsewhere but who interact with other employees in New York City (even if they are not physically present in the City). Although employers in New York City have until December 31, 2019 to comply with the City law, employers should consider providing training now that complies with the requirements of both the State and City laws.

As always, Proskauer attorneys are standing by to provide guidance and answer questions you have about these requirements.

Colorado Enacts Laws Regarding Pay Equity, Salary History and Criminal Background Inquiries

The Colorado legislature has been quite active in recent weeks, passing several new employment laws, many of which reflect nationwide trends. Among other things, the new laws address discriminatory pay disparities, salary history inquiries and criminal background checks.

Pay Disparity

Effective January 1, 2021, the Equal Pay for Equal Work Act (the “Act”) will prohibit employers from paying members of the opposite sex different wages for “substantially similar work” based on sex (including gender identity) or sex plus another characteristic protected by applicable law. The presence of “substantially similar work” is determined by the nature of the job itself, taking into account employee skill, effort and responsibility.

An employer may, however, avoid liability under the Act if it can demonstrate that the difference in compensation is based on at least one of the following factors: (i) a seniority system; (ii) a merit system; (iii) a system that measures earning by quantity or quality of production; (iv) the geographic location where the work is performed; (v) education, training, or other relevant experience to the extent they are reasonably related to the work in question; and (vi) travel, if travel is a regular and necessary condition of the work performed.

Colorado’s Act contains two unique notice provisions not required in other states’ laws. First, it requires employers to make reasonable efforts to announce, post, or otherwise make known all internal opportunities for promotion to all employees on the same calendar day. Additionally, employers must disclose in each posting for each job opening the hourly or salary compensation, or a range of the hourly or salary compensation, and a general description of all benefits and other compensation offered.

Similar to laws in Massachusetts and Oregon, the Act incentivizes employers to be proactive and conduct audits of their compensation practices. While not a complete defense to liability, employers may use evidence of a “thorough and comprehensive pay audit” with the “specific goal of identifying and remedying unlawful pay disparities” to avoid liquidated damages.

The Act further obligates employers to keep records of all job descriptions and wage rate history for the duration of employees’ employment plus two years after the end of employment in order to determine if there is a pattern of wage discrepancy.

Salary History

The Act also prohibits employers from seeking the wage rate history of job applicants, bringing Colorado in line with nine other states that have enacted similar prohibitions on salary history inquiries. Specifically, employers may not:

  • Seek the wage history of a prospective employee;
  • Rely on the wage history of a prospective employee to determine wage rate; or
  • Discriminate or retaliate against a prospective employee for failing to disclose wage history.

For employees who are paid on an hourly basis, the Act defines “wage rate” to include the hourly compensation paid to the employee plus the value per hour of all other compensation and benefits received by the employee. For employees who are paid on a salary basis, “wage rate” includes the total of all compensation and benefits received by the employee.

The Act also prohibits employers from (1) preventing employees from discussing their own compensation information with others, or (2) requiring employees to sign a waiver that prohibits their ability to do the same.

Employers who violate the Act (as it relates to salary history or pay disparity, as discussed above) may be subject to fines and other legal and equitable relief, including reinstatement, promotion, pay increase, payment of lost wage rates, liquidated damages and reasonable attorneys’ fees.

Ban the Box

Colorado also recently enacted a law (HB19-1025) that will prohibit employers from requiring the disclosure of or inquiring about a job applicant’s criminal history on their application form. For employers with more than ten employees, the law takes effect on September 1, 2019; for employers of all other sizes, the law becomes effective on September 1, 2021.

Specifically, the law will prohibit employers from:

  • Advertising that a person with a criminal history may not apply for a position;
  • Placing a statement in an employment application that a person with a criminal history may not apply for a position; or
  • Inquiring about an applicant’s criminal history on an initial application.

Employers are, however, permitted to inquire about criminal history later in the hiring process. There are also exceptions to the law for (i) individuals with certain criminal histories who are prohibited by law from performing a particular job, (ii) criminal history inquiries that are implemented to promote employment of individuals with criminal histories, and (iii) employers that are otherwise required by law to conduct a criminal history check for a particular job.

While employees may not bring a private right of action for violations of the law, the state’s department of labor and employment may issue warnings and orders of compliance for violations, as well as impose civil penalties for subsequent violations.

Next Steps

Employers in Colorado should start taking steps now to ensure all onboarding documents and other policies are compliant with these new requirements. In particular, employers should train HR and other relevant personnel and may also want to consider conducting an audit of their existing pay practices to determine what, if any, changes need to be made with respect to employee compensation.

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Clara Goldrich, an Industrial and Labor Relations (ILR) Intern in Proskauer’s New York office and a student at Cornell University, co-authored this post.

EEOC Posts Forms and Guidance for New EEO-1 Reporting Requirements

In an effort to assist employers, the EEOC has posted guidance and sample forms for the new EEO-1 Component 2 Compensation Data reporting requirements on its website. The new materials provide useful information for employers to comply with the new reporting requirement. As we have previously reported, employers must now report employee pay data and hours worked, by job category, in addition to the usual workforce demographic information. The EEOC informed employers this spring that it will require submission of 2017 and 2018 data by September 30, 2019.

The new materials include a sample Component 2 Form, an 18-page instruction book for filers and a two page Fact Sheet. The EEOC also provides useful links to EEO-1 and NAICS job classification guides. Covered employers should bookmark this webpage, as the EEOC will release an additional “Users Guide” on or after July 15, 2019, when the Component 2 filing period begins. Employers are encouraged to review these materials in advance of the filling period.

Employers should also consult with counsel to ensure that their Component 2 submissions are compliant and work through the numerous issues the new submission requirements raise. We will continue to provide updates on this matter as they become available.

 

DC Paid Leave Tax: Contributions Begin on July 1

As we previously reported, the Universal Paid Leave Amendment Act of 2016 will provide Washington, DC employees with paid leave for several reasons, including:

  • Up to eight weeks of paid parental leave to bond with a new child;
  • Up to six weeks of paid family leave to care for a covered family member with a serious health condition; and
  • Up to two weeks of paid medical leave to care for the employee’s own serious health condition.

The paid leave benefits will be funded by a 0.62 percent quarterly payroll tax on employees’ total wages, which the District of Columbia will begin collecting on July 1, 2019. Although the tax is calculated based on employees’ quarterly wages, the cost cannot be deducted from employee pay.

On July 1, employers must submit wage reports (Form UC-30) to cover both unemployment insurance and paid leave requirements. These reports are based on the wage tracking that employers must conduct on covered employees between April 1, 2019 and June 30, 2019. If an employer pays unemployment insurance tax on an employee for a quarter, then the employee will automatically be presumed to be a covered employee for paid leave.

Employers have until July 31, 2019 to pay the paid leave tax. Employers who fail to make contributions by this deadline will be assessed an interest rate of 1.5% per month until the contributions are made. If contributions are not paid, or wage reports are not filed on or before the first day of the second month following the close of the calendar quarters for which they are due, an added penalty of $100 or 10% of the amount due (whichever is higher) will be assessed.

In addition to tracking employee wages and making quarterly tax payments, employers also are required to post a notice about PFL in a conspicuous place in the workplace, and provide such notice to all employees upon hire and annually thereafter. Employers must also provide this notice at the time it becomes aware that the leave is needed, though employees may not begin using paid leave until July 1, 2020. An employer who fails to provide notice in accordance with the law will be subject to civil penalties, not to exceed $100 for each covered employee to whom individual notice was not delivered and $100 for each day that the employer fails to post notice in a conspicuous place.

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