I. Premium Pay and COVID-19
Although many Americans have suffered furloughs or job losses while those more fortunate are able to work, albeit remotely, workers deemed “essential” under state executive orders and federal guidelines continue to perform their job functions in public-facing circumstances outside of the home. State lawmakers across the country have introduced measures to provide premium or hazard pay to compensate essential workers for the heightened risk of exposure to COVID-19. In addition, the House of Representatives included a premium pay component in its latest COVID-19 response measure. These measures impose the benefits and obligations of additional pay upon different groups of workers and employers, respectively, despite the same overlapping legislative intent. Moreover, the measures raise several important legal questions regarding employment classification and state pre-emption laws. As many states begin to reopen their economies while both the public and private sectors face significant budget constraints, a question remains: will these premium pay measures be dismissed by lawmakers in light of the economic downturn or set the stage for further discussions on either the state or federal level in providing additional pay to those who continue to work during a declared public emergency. READ MORE
As the COVID-19 pandemic continues to financially impact companies worldwide, employers have been working to implement creative compensation strategies to mitigate the financial impact on their workforce, continue to incentivize employees and reward on-site essential workers. While cash is king, equity awards have long been a key component of an overall compensation and benefits strategy for many companies, from small to large, private and public. In difficult economic times such as these, granting equity awards can help companies save cash while filling a compensation gap created by salary reductions, unpaid furloughs or decreased benefits. Equity awards could also soften the blow to employees losing their jobs due to layoffs and redundancies resulting from an employer’s Coronavirus-related financial losses and cost-cutting measures. READ MORE
On July 26, 2018, the California Supreme Court found that employers must compensate workers for the time they spend on certain menial tasks after clocking out of their shifts. In a unanimous decision, the Court held that California wage law did not bar a putative class action brought by a former Starbucks employee who routinely spent several minutes on trivial close-out tasks after his shift. READ MORE
The Office of Federal Contractor Compliance Programs (“OFCCP”) may soon rescind Directive 307, OFCCP’s current official statement as to how it conducts federal contractor compensation system reviews, according to a story published by Bloomberg Law on April 19, 2018. This announcement comes on the heels of Directive 2018-01, issued by the OFCCP on February 27, 2018, which mandates the use of Predetermination Notices (“PDN”) prior to issuing a Notice of Violation (“NOV”), and further requires national office oversight and approval before a PDN is issued. OFCCP notes that Directive 2018-01 is consistent with the agency’s focus to increase transparency about preliminary findings with contractors, and encourage communication throughout the compliance evaluation process. Combined, these two developments illustrate that change is afoot at OFCCP, now that new leadership is in place in Washington. READ MORE
Effective February 27, 2018, the Office of Federal Contract Compliance Programs (OFCCP), which is charged with ensuring federal contractors and subcontractors provide equal employment opportunity, issued Directive 2018-01, announcing that predetermination notices (PDNs) will be sent to federal contractors and subcontractors for all audits and compliance reviews where a finding of unlawful employment discrimination is imminent. READ MORE
When we last checked in on AB 1209, the Gender Pay Gap Transparency Act, the proposed legislation was making its way through the California Senate. After making a few key amendments, the Senate passed the bill on September 7, 2017. The California Assembly approved the amendments on September 11, 2017, and now the fate of AB 1209 lies in the hands Governor Jerry Brown. READ MORE
Earlier this year, we predicted that the Department of Labor’s Office of Federal Contract Compliance (“OFCCP”) would ramp up investigations directed at rooting out alleged discrimination by information technology companies. Many tech companies have indeed been the focus of increasingly intense and acrimonious investigations in 2016.
OFCCP took its enforcement efforts to the next level this week by filing a formal administrative complaint for violations of Executive Order 11246 (which prohibits discrimination by federal contractors). The complaint alleges that Palantir Technologies – a private software company headquartered in Palo Alto and recently valued at $20 billion – discriminated against Asian applicants for three positions (QA Engineer, Software Engineer, and QA Engineer Intern). Specifically, the OFCCP alleges that the company hired largely based on an employee referral system that resulted in statistically significant underrepresentation of Asian hires, given that the vast majority of applicants for these jobs were Asian. The complaint seeks to debar the company from future federal contracts and require “complete relief” for Asian applicants for these roles, including lost compensation, hiring, and retroactive seniority.
A few months ago, the California State Assembly introduced AB 1676, a bill that not only would have prohibited employers from asking job applicants about their compensation history, but also would have required employers to provide pay scale information upon reasonable request. A nearly identical bill passed through the Assembly and Senate before it was vetoed by the Governor toward the end of last year. In his veto statement, the Governor expressed concern that such a measure “broadly prohibits employers from obtaining relevant information with little evidence that [it] would assure more equitable wages.”
As we previously reported, the Fair Pay Act (the “FPA,” Labor Code § 1197.5) requires “equal pay for substantially similar work” based on the employee’s skill, effort and responsibility, and similar working conditions. To the extent a disparity exists between employees of the opposite sex, it must be reasonably based on one or more the factors enumerated within the statute.
Perhaps hoping to avoid repeating history, proponents of AB 1676 have taken a new approach. In place of the provision prohibiting inquiries about prior salary history is new language that amends the FPA to state that “[p]rior salary shall not, by itself, justify any disparity in compensation.”
Three months after the California Fair Pay Act took effect on January 1, 2016, the California Division of Labor Standards Enforcement (“DLSE”) has issued answers to FAQs about the new law, which by all counts is the most employee-friendly equal pay law in the nation. But for California employers who anxiously have been awaiting official guidance on the Act’s many new terms and standards, the FAQs provide little satisfaction. Rather, they focus more on informing employees on how to bring a claim. Nor has the DLSE otherwise spoken publicly about how it plans to enforce the new law; instead, the agency appears to be taking its time and exercising caution as it potentially sets the stage for the rest of the nation.
The U.S. Department of Labor (DOL) sent its much anticipated final overtime regulations to the Office of Management and Budget (OMB) for review on March 14, 2016. Technically, this move came slightly ahead of schedule. OMB now has 90 days to review, which would put its “due date” in mid-June – ahead of the July regulatory agenda publication date we previously reported. However, as these overtime regulations are a top-line priority subject to intense political scrutiny, there is reason to believe OMB may not complete its review within the 90-day window.