Law and the Workplace

Illinois Senate Fails to Override Governor’s Veto of Salary History Ban

Bucking the nationwide trend, Illinois was unable to pass a law prohibiting employers from asking job applicants about their salary history. On November 9, 2017, the Illinois Senate failed to override Governor Rauner’s veto of a salary history ban.

As we previously reported, on August 25, 2017, Governor Rauner vetoed a bill that would have prohibited employers from asking applicants about their wage histories. The bill, known as the Illinois No Salary History Law, previously had been passed by the Illinois House and Senate with overwhelming bipartisan support (91-24 in the House and 35-18 in the Senate).  On October 25, 2017, the Illinois House voted 80-33 to override Governor Rauner’s veto.  If three-fifths (or thirty-six members) of the Illinois Senate had voted to override the veto, the bill would have become law.  The final Illinois Senate vote tally was 29 “yeas,” 17 “nays,” and 1 “present.”

Last year, Massachusetts became the first state or locality to pass a law banning employers from asking applicants about their salary histories. Since then, a number of laws have been passed restricting employer inquiries into applicants’ salary histories.  Following Massachusetts’ lead, states and localities including California, Delaware, New York City, Oregon, Philadelphia, Puerto Rico, and San Francisco have all passed similar restrictions.  Additionally, numerous other states and localities (including Maryland, New York, Rhode Island, Texas, Washington, D.C. and Virginia) are currently considering similar bans.

Generally speaking, salary history bans prohibit employers from asking applicants about their compensation history during the hiring process. In addition, many salary history bans prohibit employers from using information concerning applicants’ prior compensation in making and negotiating salary offers.  Although each jurisdiction’s law varies, the common intention of these bans is to minimize or eliminate pay disparities between male and female workers.  By eliminating prior compensation as a factor in hiring decisions and salary negotiations, the laws seek to prevent employers from inadvertently perpetuating historic pay bias or discrimination.

Despite the developments in Illinois, employers should continue to monitor developments in this area.  Among other things, employers should immediately begin taking steps to educate their recruiters, hiring managers, human resources personnel, and others involved in the interview and hiring process of the new prohibitions on salary history inquiries. Employers should also carefully review their applicant screening and hiring policies, and job applications and other hiring documents to ensure compliance with the new laws.  For instance, adopting standardized interview and salary negotiation scripts for the hiring process may reduce the risk of violations.

Montgomery County Council Approves Increase In Minimum Wage to $15 Per Hour

On November 7, 2017, the Montgomery County Council unanimously passed a bill to increase the County’s minimum wage to $15 per hour by 2021 for employers with more than 50 employees (the “Bill”). Mid-size businesses, with 11 to 50 employees, must phase in the higher wage by 2023.  Small businesses (those with fewer than 11 employees) will have until 2024 to phase in the higher minimum wage.  The Bill, however, allows the County Executive to temporarily suspend scheduled minimum wage increases based on economic conditions.

Montgomery County is the first county in Maryland to require a $15 minimum wage and follows Washington, D.C.’s approval of a $15 minimum wage last June. The county’s current minimum wage is $11.50 per hour.

As noted in our prior posts, previous efforts to raise the minimum wage stalled after Montgomery County Executive Isiah Leggett vetoed similar legislation in January over concerns about competitive disadvantage and harm to small businesses. At that time, Leggett explained that he would approve a minimum wage increase bill that:

  • Was based on an expeditious study of the direct and indirect financial impacts on private employers, non-profits, and the County government;
  • Included an exemption for small business;
  • Included an exemption for youth workers; and
  • Provided for reaching $15 per hour in 2022.

After the Bill’s passage, Leggett released a statement that the Bill is “close enough to the conditions” he set for his support that he will sign the measure into law.

Bill Expanding Coverage Under the NYC Earned Sick Time Act Signed Into Law

Leave of absence form

New York City Mayor Bill de Blasio has signed into law an amendment to the NYC Earned Sick Time Act expanding the covered reasons for leave under the law, as well as broadening the definition of a covered family member for whom an employee may take leave to provide care.  The amendments take effect on May 5, 2018 (180 days from the date of signing).

As we previously reported, the amendment renames the law the “NYC Earned Sick and Safe Time Act” and extends leave protections under the law to include situations where an employee or an employee’s covered family member is a victim of domestic violence, sexual offenses, stalking or human trafficking as defined in the bill (“safe time”).  Reasons for safe time may include:

  • to obtain services from a domestic violence shelter, rape crisis center, or other shelter or services program;
  • to participate in safety planning, temporarily or permanently relocate, or take other actions to increase the safety of the employee or employee’s family members from future harm;
  • to meet with an attorney or other social service provider to obtain information and advice on, and prepare for or participate in any criminal or civil proceeding, including but not limited to, matters related to a family offense matter, sexual offense, stalking, human trafficking, custody, visitation, matrimonial issues, orders of protection, immigration, housing, and/or discrimination in employment, housing or consumer credit;
  • to file a complaint or domestic incident report with law enforcement or meet with a district attorney’s office;
  • to enroll a child in a new school; or
  • to take other actions necessary to maintain, improve, or restore the physical, psychological, or economic health or safety of the employee or the employee’s family member or to protect those who associate or work with the employee.

Employers will be permitted to obtain “reasonable documentation” of the need for safe time following an absence of more than three consecutive work days (similar to the rule on obtaining documentation from a health care provider in the case of a medical-related absence).  Reasonable documentation may include a signed note from a victim services organization, attorney, member of a clergy, or medical provider, a police or court record, or a notarized letter from the employee documenting the need for such leave.  All such information obtained would need to be treated as confidential and an employer would not be permitted to require disclosure of specific details relating to the domestic violence, sexual offenses, stalking or human trafficking.

The amendment also expands the list of covered family members for whom an employee may use sick and/or safe time to provide care to include the following broad categories:

  • any other individual related by blood to the employee; and
  • any other individual whose close association with the employee is the equivalent of a family relationship.

These new categories are in addition to the current list of covered family members under the law, which includes an employee’s spouse, domestic partner, parent, child, sibling, grandparent, grandchild or the child or parent of the employee’s spouse or domestic partner.

Employers should take steps to update their sick leave policies to reflect the changes to the law by no later than the May 5 effective date.

DOL to Appeal Ruling That 2016 Overtime Rule Exceeded Its Authority

The DOL will appeal a Texas federal court’s ruling that the Obama administration’s 2016 overtime rule exceeded the DOL’s authority. The appeal comes nearly two months after the DOL dropped an earlier appeal of that court’s preliminary injunction on the same topic.

The 2016 overtime rule would have required employers to pay most executive, administrative, and professional employees at least $913 per week in order to exempt them from the overtime pay requirements—more than doubling the current weekly salary threshold of $455.  Judge Amos Mazzant’s preliminary injunction in November 2016 invalidated the new overtime rule on a nationwide basis, concluding that the DOL exceeded its authority by increasing the salary threshold so dramatically so as to effectively eliminate the “duties test” for exemption required by the Fair Labor Standards Act (FLSA).

In August 2017, Judge Mazzant granted summary judgment to the plaintiffs in the overtime rule challenge, permanently invalidating the 2016 rule.  Judge Mazzant concluded that the $913 threshold “would essentially make an employee’s duties, functions, or tasks irrelevant” and that the overtime status of “entire categories of previously exempt employees” would “depend predominately on a minimum salary level.”  Judge Mazzant also concluded that the DOL exceeded its statutory authority by including a provision in the 2016 overtime rule that would have automatically updated the salary level every three years.  The DOL’s latest appeal targets this summary judgment order.

The DOL was quick to clarify to the Wall Street Journal that its latest appeal is not an endorsement of the salary level in the 2016 overtime rule, but is only intended “to maintain Secretary Alexander Acosta’s ability to establish overtime regulations.”  Earlier this year, the DOL sought public comment on a revised overtime rule.  Secretary Acosta’s statements in June 2017 indicated that the DOL may be considering a salary level of about $635 per week.

UPDATE (November 7, 2017): At the DOL’s request, which the plaintiffs did not oppose, the Fifth Circuit Court of Appeals will hold the DOL’s appeal in abeyance pending the outcome of the DOL’s revised overtime rule.

 

District Court Dismisses Putative FCRA Class Action For Lack Of Standing

The U.S. District Court for the Central District of California recently dismissed a putative class action alleging violations of the Fair Credit Reporting Act (“FCRA”), finding that the named plaintiff lacked standing to pursue her claims. Saltzbreg v. Home Depot, U.S.A., Inc., No. 17-cv-05798 (C.D. Cal. Oct. 18, 2017).

The Complaint

The plaintiff filed a class action complaint against Home Depot U.S.A. (“Home Depot”) alleging that it violated the FCRA by: (i) failing to provide a compliant disclosure notifying her that a background check would be conducted; and (ii) failing to obtain proper authorization before conducting the background check.

The plaintiff sought to represent a nationwide class of all persons who received Home Depot’s FCRA background check disclosure form during the five years preceding the filing of the complaint. Plaintiff claimed that, because this form included a liability waiver, it was not a standalone disclosure as required by FCRA.  Because the disclosure form was defective, plaintiff alleged, her authorization for the background check was invalid.  However, plaintiff did not allege that she was harmed as a result of her receipt of the allegedly non-compliant disclosure form.

Ruling

The court dismissed the complaint for lack of subject matter jurisdiction, finding that the plaintiff did not allege that she suffered an injury-in-fact to confer Article III standing. Citing the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1549 (2016), the district court noted that the injury-in-fact requirement is not “automatically satisfie[d] … whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.”  Rather, Article III standing requires a concrete injury even in the context of a statutory violation.  The court concluded that merely asserting a violation of FCRA’s standalone disclosure requirement is insufficient without connecting it to a concrete injury.

Implications

This is another welcomed decision in the wake of Spokeo for employers defending FCRA class actions.  However, given the stiff penalties employers face under this statute, it still is prudent for employers to revisit their background check policies and documentation to ensure compliance with the FCRA and related state and local laws.

Chicago Passes Ordinance Requiring Hotels to Provide “Panic Buttons” To Certain Employees

On October 11, 2017, the Chicago City Council passed the Hotel Workers Sexual Harassment Ordinance (the “Ordinance”), which requires Chicago hotels to develop anti-sexual harassment policies and provide employees who work alone in hotel rooms with panic buttons. Employers who fail to comply with these requirements or retaliate against employees for invoking the Ordinance’s protections may be subject to fines and/or the suspension or revocation of their hotel license.

Panic Buttons

By July 1, 2018, Chicago hotels must equip employees who work alone in guest rooms or restrooms with a “panic button” or notification device that can be used to summon help if the employee reasonably believes that an ongoing crime, sexual harassment, sexual assault or other emergency is occurring. These devices must be provided at no cost to the employee.

Sexual Harassment Policy

The Ordinance also requires Chicago hotels to develop and maintain a written sexual-harassment policy to protect employees against sexual assault and sexual harassment by guests. The policy must:  (a) encourage employees to report instances of alleged sexual assault and sexual harassment by guests; (b) describe the procedures that the employee and employer must follow in such cases; (c) instruct the employee to cease work and leave the immediate area where danger is perceived until hotel security personnel or the police department arrive to provide assistance; (d) offer temporary work assignments to the complaining employee during the duration of the offending guest’s stay at the hotel, which may include assigning the employee to work on a different floor or at a different station or work area away from the offending guest; (e) provide the employee with necessary paid time off to sign a complaint with police department and testify as a witness at any legal proceeding that may ensure as a result of such complaint; (f) inform the employee that the Illinois Human Rights Act, Chicago Human Rights Ordinance and Title VII of the Civil Rights Act of 1964 provide additional protections against sexual harassment in the workplace; and (h) inform the employee of the Ordinance’s prohibition on retaliation.

In addition, employers must provide employees with a copy of the hotel’s anti-sexual harassment policy in English, Spanish and Polish and post the policy in all such languages in conspicuous places in areas of the hotel, such as supply rooms or employee lunch rooms.

Retaliation Prohibited

The Ordinance prohibits an employer from retaliating against an employee for: (i) reasonably using a panic button or notification device; (ii) availing himself or herself to the protections provided by the employer’s sexual harassment policy; or (iii) disclosing, reporting, or testifying about any violation or the Ordinance.

Penalties

Any employer who violates the Ordinance will be subject to a fine of between $250 and $500 for each offense, and each day that a violation continues will constitute a separate and distinct offense. In addition, an employer who is deemed to have two or more violations of the Ordinance’s prohibition on retaliation within any 12-month period may have its hotel license suspended or revoked.

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