Law and the Workplace

EEOC Will Not Seek to Renew Component 2 (Pay and Hours Data) Requirements for Future EEO-1 Reports

The EEOC announced today, September 12, 2019, that it “is not seeking to renew Component 2 of the EEO-1” in a notice published on the Federal Register.

As we have previously reported, Component 2 of the EEO-1 report requires employers with over 100 employees to report its employees’ compensation and hours worked (sorted by pay band, job category, race ethnicity, and gender). The Obama Administration initially adopted the addition of Component 2 reporting requirements, but its implementation was stayed by the Office of Management and Budget (“OMB”) in 2017. The OMB stay was challenged in National Women’s Law Center et al v. Office of Management and Budget, where the federal district court for the District of Columbia ruled that the OMB failed to sufficiently justify blocking the implementation of the Component 2 requirement. Subsequently, in April 2019, the court ordered that covered employers must report Component 2 data by September 30, 2019. The EEOC’s September 12th decision not to seek the renewal of the Component 2 requirements indicates that this may be a one-time reporting requirement for employers.[1]

Under the Paperwork Reduction Act (“PRA”), the EEOC must request approval from OMB when it seeks to require certain disclosures of information from the public, and renew such requests prior to the expiration of OMB’s approval (an approval typically expires 3 years after it is granted.) The current approval for the current EEO-1 expires on September 30, 2019. The EEOC filed the September 12th notice to renew its request to collect Component 1 data, and to clarify that it is not seeking to renew its request to collect Component 2 data. The EEOC based its decision not to seek the renewal of Component 2 on the “unproven utility” of pay data to its enforcement programs. The agency noted that, under the PRA, it has a responsibility to “balance the utility of the data it collects against the burden the data collection as structured imposes on the employers who must submit it.” According to the EEOC “the burden estimate associated with the EEO-1 is higher than it [] previously estimated”. The EEOC’s previous burden estimation put the total annual burden hour cost for completing both Components 1 and 2 of the EEO-1 at $53,546,359.08. The EEOC has “developed a more accurate methodology” for calculating the burden cost to employers and estimated that the “burden hour costs for submitting both Components 1 and 2 would be $614,391,388 in 2017 and $622,015,798 in 2018.” The EEOC concluded that the utility of collecting Component 2 data was “far outweighed” by this immense reporting burden on employers.

The September 12th notice states that, despite the higher burden indicated above, the EEOC will continue its collection of Component 1 data (which is limited to race and sex information) in light of its long proven utility in the enforcement of employment discrimination laws.

Even though the EEOC’s decision is welcome news, employers still must make their 2017 and 2018 Component 2 submissions by September 30, 2019 and the EEOC may resurrect Component 2 at a later time. Moreover, if we have learned anything over the past six months it is the difficulty of predicting what will happen when it comes to Component 2. In other words: Stay Tuned.

We will continue to report on this developing story as new details emerge.

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[1] The September 12th notice states that “if the EEOC seeks to pursue a pay data collection in the future it will do so using notice and comment rulemaking and a public hearing pursuant to Title VII of the Civil Rights Act of 1964.”

[Podcast]: New York State Expanded Protections Against Workplace Harassment

In this episode of The Proskauer Brief, partner Evandro Gigante and associate Arielle Kobetz discuss the recent developments out of New York State, that will significantly expand workplace anti-discrimination protections.  Among other things, recent amendments to New York law will lower the burden on plaintiffs seeking to prove claims of workplace harassment under the Human Rights law.  Employers should tune in to see what impact the new law may have on the scope of harassment claims and what changes to policies or practices should be implemented.

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U.S. Department of Labor Proposes Revisions to Model FMLA Forms

The U.S. Department of Labor Wage and Hour Division is proposing revisions to its model notice of rights, certification, and designation forms under the federal Family and Medical Leave Act (FMLA).  Employers may, but are not required to, utilize the model forms to satisfy their notice requirements under the law and to obtain necessary information to determine whether a proposed leave qualifies for FMLA protection.  Comments are being accepted on the proposed changes through October 4, 2019.

The stated purpose for the changes is to “increase compliance with the FMLA, improve customer service, and reduce the burden on the public by making the forms easier to understand and use.”  While the proposed changes do not alter the substance of leave benefits and protections available to covered employees under the FMLA, they do represent the first attempt by the Department of Labor in several years to streamline the oftentimes burdensome notice and certification processes under the law.

In addition to general layout and formatting modifications, other proposed changes to the model forms include:

  • adding additional information on the substitution of paid leave and concurrent leave usage on the Notice of Eligibility and Rights & Responsibilities;
  • reducing the number of questions on the certification forms requiring written responses, and replacing them with statements that can be verified by checking a box;
  • reorganizing the layout of medical certification forms to more efficiently determine whether a condition qualifies as a serious health condition; and
  • clarifying the circumstances in which follow up information may be obtained from healthcare providers.

Versions of each form with the proposed revisions can be found on the Department of Labor’s website.

Comments may be submitted by the October 4, 2019 deadline by email to WHDPRAComments@dol.gov.  The Department of Labor states that it is particularly seeking comments that “enhance the quality, utility, and clarity of the information to be collected” and “minimize the burden of the collection of information on those who are to respond.”

We will continue to report on further developments.

New York State to Require Reasonable Accommodation for Victims of Domestic Violence

Leave of absence form

New York Governor Andrew Cuomo has signed into law amendments to the New York State Human Rights Law (NYSHRL) that expand protections for employees who are victims of domestic violence.  The amendments will take effect on November 18, 2019.

While the NYSHRL has long prohibited discrimination against victims of domestic violence, the amendments expressly state that the following are unlawful practices with respect to victims of domestic violence: (i) refusing to hire or terminating someone because they are a victim of domestic violence; (ii) discriminating against a victim of domestic violence with respect to compensation or other terms, conditions, or privileges of employment; and (iii) circulating or utilizing a job posting, employment application, or other publication expressing any limitation, specification, or discrimination in hiring or employment based on domestic violence victim status.  The new law also amends the definition of “victim of domestic violence” under the NYSHRL to align it with the definition under the state’s Domestic Violence Prevention Act.

In addition, New York State employers will now be required to grant employees who are victims of domestic violence reasonable time off as an accommodation in order to:

  • seek medical attention for injuries caused by domestic violence;
  • obtain services from a domestic violence shelter, program, or rape crisis center or obtain psychological counseling;
  • participate in safety planning or to take other actions to increase safety from future incidents of domestic violence; and/or
  • obtain legal services, assist in the prosecution of the offense, or appear in court in relation to the incident of domestic violence.

It is noted that employers covered by the New York City Human Rights Law are already obligated to provide reasonable accommodations to employees who are the victim of domestic violence, sex offenses, or stalking.

As is the case with other reasonable accommodation obligations under the NYSHRL (such as for an employee’s disability), employers will be required to provide any requested leave unless the employee’s absence would constitute an undue hardship on the business.  Employers may charge leave under the law to any paid time off that the employee has available (including, but not limited to, under the New York City Earned Safe and Sick Time Act); otherwise the time off may be unpaid.  Employees are entitled to continuation of existing health insurance coverage during any such absence.

Employees requiring leave must provide their employer with advance notice where feasible.  If advance notice cannot be provided, the employer may require certification of the need for leave in the form of a police report, court order, or documentation from a medical professional, advocate, or counselor.  To the extent consistent with applicable law, employers are required to maintain confidentiality of any information regarding an employee’s status as a victim of domestic violence.

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Employers in New York should review their policies and practices and ensure all relevant personnel are trained on these new developments in advance of the November 18, 2019 effective date.

Substantial Changes Ahead for Illinois Employers in 2020 Relating to Sexual Harassment Training, Mandatory Arbitration Agreements, and More

On August 9, 2019, Governor Pritzker signed into law Public Act 101-0221 (the “Act”), which enhances protections against workplace sexual harassment and discrimination.  The Act creates new laws and amends several existing ones, including the Illinois Human Rights Act (“IHRA”), as summarized below:

NEW LAWS

The Workplace Transparency Act (“WTA”).  The Workplace Transparency Act will apply to all contracts entered into, modified or extended on or after January 1, 2020, and limits the use of confidentiality provisions in employment agreements and arbitration of sexual harassment and other Title VII or IHRA violations.  (Our post on the WTA can be accessed here.)

The Hotel and Casino Employee Safety Act.  Beginning on July 1, 2020, certain employers in the hospitality and casino industries will be required to:

  • Equip employees with personal safety and notification devices that may be used to summon help if they are the victim of or are witnessing sexual harassment or a crime.
  • Expressly inform each of their employees about the protections against sexual harassment and discrimination as found in the IHRA and Title VII. Employers will now be required to include specific language in written anti-sexual harassment policies instructing employees to leave the work area immediately if they perceive danger.
  • Take measures to separate employees from offending guests and accommodate employees who seek legal protection against offending guests. Employers will now be required to offer employees temporary work assignments to accommodate them if they complain about guests who have engaged in sexual harassment and provide employees with paid time off to make police reports about offending guests and to attend legal proceedings regarding any such complaints.

UPDATES TO THE IHRA

Beginning on January 1, 2020, the IHRA will now:

  • Expressly apply to working environments beyond the physical location at which employees perform their assigned duties, signifying that sexual harassment of remote workers taking place exclusively online and/or outside the workplace is prohibited by the Act;
  • Protect against discrimination or harassment on the basis of an individual’s “perceived” status protected by the IHRA;
  • Protect non-employees performing work for an employer (e., contractors and consultants in an employer’s workplace); and
  • Require all Illinois employers to establish a training program consistent with a forthcoming state sexual harassment program, and issue training at least once per year to all employees.

In addition, beginning July 1, 2020, Illinois employers will be required to disclose annually the number of adverse judgments or administrative rulings that have been entered against the employer related to sexual harassment or certain types of discrimination.  If the Illinois Department of Human Rights investigates a civil rights charge against an employer, the employer may be required to disclose the total number of settlements related to sexual harassment or discrimination.

IMPLICATIONS

Companies with Illinois-based operations should review and update employee handbooks, trainings, arbitration agreements, employment agreements with confidentiality provisions and any severance and/or separation agreements to ensure they are in compliance with the Act.

Illinois Enacts Workplace Transparency Act

On August 9, 2019, Illinois Governor Pritzker signed the Workplace Transparency Act (the “Act”) into law.  The Act will apply to all contracts, agreements, clauses, or waivers entered into, modified, or extended on or after January 1, 2020.  Here are the key features with respect to arbitration agreements, employment agreements and separation agreements that Illinois employers should be aware of:

  • The Act applies to contracts entered into with employees and non-employees (defined to include individuals who are directly performing services for the employer pursuant to a contract, including contractors and consultants).
  • Employers may no longer unilaterally require arbitration of any claim arising under any law enforced by the Equal Employment Opportunity Commission (“EEOC”) or the Illinois Department of Human Rights (“IDHR”).  This includes claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, Americans with Disabilities Act, the Equal Pay Act and the Illinois Human Rights Act (collectively, “EEO Laws”).  Any unilaterally required arbitration clause pertaining to EEO laws will be deemed void to the extent it denies substantive or procedural rights or remedies.  (Although this provision potentially conflicts with and thus may be preempted by the Federal Arbitration Act, no so such challenge has yet to be raised to the courts.)
  • Employers cannot unilaterally condition employment or continued employment on an agreement that has the purpose or effect of preventing individuals from making truthful statements or disclosures about violations of EEO laws (e.g., a confidentiality clause that prohibits reporting of EEO violations).
  • However, agreements that reflect mutual conditions of employment (e.g., that are negotiated between an employer and employee in good faith for consideration in order to obtain or retain employment) are permissible, but only where they are: (A)  in writing; (B) demonstrate actual, knowing, and bargained-for consideration from both parties; and (C) expressly acknowledge the right of the employee or prospective employee to (i) report good-faith allegations of violations of EEO laws; (ii) report good-faith allegations of criminal conduct; (iii) participate in proceedings before EEOC and/or state or federal agency enforcing EEO laws; and (iv) make truthful statements required by law.
  • Employee termination and/or separation agreements that include confidentiality covenants relating to EEO violations are permissible only where:
    • Confidentiality is the preference of the employee and is mutually beneficial to both parties;
    • The employer notifies the employee in writing of his or her right to attorney review of the agreement before its execution;
    • There is valid and bargained-for consideration for the exchange of confidentiality;
    • The agreement does not waive claims of EEO violations that accrue after the date the agreement is executed;
    • The employee has 21 days to consider the agreement before execution; and
    • Unless knowingly and voluntarily waived by the employee, the employee has 7 calendar days following the execution of the agreement to revoke it.
  • Employees may be entitled to attorneys’ fees incurred for successful challenges to contracts that violate the Act.

Illinois employers, along with organizations that utilize contractors or consultants in Illinois, should take immediate steps to review all relevant policies and contracts—including employee handbook provisions, service and/or employment contracts, arbitration agreements and separation agreements—to ensure they are in compliance with the Act.

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