While new pay data reporting requirements in California and Illinois have grabbed pay equity headlines, we are seeing a ground swell in another type of pay transparency requirements: mandatory pay disclosures to applicants, current employees, or both.
Pay range disclosure laws go beyond the host of state laws that came online several years ago and establish employees’ rights to request information, disclose, and discuss their own wages. Rather, these laws obligate employers to affirmatively (and sometimes proactively) disclose the pay range for a given position under specific circumstances. Employers in nine jurisdictions and counting are subject to such requirements: California, Colorado, Connecticut, Maryland, Nevada, Rhode Island, and Washington, as well as Ohio cities Toledo and Cincinnati. At present, another nine states have similar bills pending. READ MORE
Employers face increasing demands and pressure to ensure and declare equitable pay for employees, not only from within their own workforces, but also from clients, customers, and government leaders. While states continue passing increasingly progressive pay equity laws, the requirements of such laws may not align with the purpose and intent of federal or state equal pay laws. Employers should be mindful of the risks associated with how state agencies may use pay data collections and be prepared to explain their practices and provide further response, if needed. READ MORE
Since 2015, pay gap disclosure has been front and center on the activist shareholder proposal landscape from an employment and workforce perspective. Following closely on the heels of tragic events of last summer and the significant advancement of the Black Lives Matter movement, activist shareholder groups have pivoted away from proposals requiring disclosures of pay gap statistics and are instead focused on other dimensions of internal diversity, equity, and inclusion (“DEI”). These initiatives seek more broad-based disclosure of whether and how companies are managing gender and racial disparities in representation – including, for example, in the boardroom and at senior management levels within an organization. Combined with recent rule changes at the U.S. Securities and Exchange Commission (“SEC”) with respect to required Human Capital Management disclosures, public companies should prepare for how they will respond to proposals seeking different and new disclosures regarding steps they are taking to expand and maintain diversity within their workforces.
On November 5, 2020, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a final rule defining the evidentiary standards it will use for proving discrimination claims by federal contractors, revising the process for notifying contractors of potential violations, and outlining an option for contractors to participate in an “expedited” dispute resolution process. It will take effect on December 10, 2020. Notably, the rule deviates significantly from the version initially proposed by OFCCP on December 30, 2019, which relied far more heavily on statistics and came under intense scrutiny from the contractor community, including the U.S. Chamber of Commerce. According to OFCCP, the requirements laid out in the final rule will increase transparency and create clear parameters for contractor compliance with equal employment opportunity laws. READ MORE
On September 23, 2020 the Securities and Exchange Commission (“SEC”) adopted amendments to 17 C.F.R. § 240.14a-8 (“Rule 14a-8”), raising the bar for shareholders seeking to force votes on proposals. The rule comes on the heels of persistent and repeat shareholder proposals in various areas including, notably, pay gap data reporting.
A California district court dealt a blow to the U.S. Women’s National Team’s (WNT) equal pay case on May 1, granting partial summary judgment to the United States Soccer Federation (USSF) in the headline-grabbing case filed last year. The decision dismisses the team’s compensation discrimination claims under both the Equal Pay Act (EPA) and Title VII but mostly leaves intact the WNT’s remaining discriminatory working conditions claims. We previously blogged about the case here.
On March 6, 2020, U.S. Secretary of Labor Eugene Scalia published Secretary’s Order 01-2020, which is among the first of his management decisions since his confirmation back in September. The Order, titled the “Delegation of Authority and Assignment of Responsibility to the Administrative Review Board,” establishes the Secretary’s authority to review, at his discretion, decisions of the Department of Labor (DOL)’s Administrative Review Board (ARB), including decisions arising out of enforcement actions brought by the Office of Federal Contract Compliance Programs (OFCCP). The Order represents a shift in procedure before the Office of Administrative Law Judges (OALJ) and introduces various new process and substantive legal questions to be aware of in connection with contractor pay discrimination enforcement actions. READ MORE
Today, the EEOC formally confirmed that it will not renew its request for authorization to collect employer’s pay data under Component 2 of the EEO-1 moving forward. The notice is consistent with its announcement last September, marking the end of a four-year saga over whether the pay data collection would go ahead (as we reported here, here, here, here, here, here, here, here, and here). Notably, the notice does not explain how the EEOC intends to use the pay data it already has collected, although it makes reference to using it in Title VII proceedings. It does, however, confirm the EEOC’s intentions regarding sharing the EEO-1 pay data, including that the EEOC does not intend to share it with the Office of Federal Contract Compliance Programs (“OFCCP”), but under certain circumstances may share it with state and local fair employment practices agencies (“FEPAs”). The notice also provides guidance regarding a potential pay data collection by the EEOC in the future, including that the EEOC intends to “develop a plan for using pay data before initiating any data collection.” READ MORE
As you’ll recall from our extensive coverage of the EEO-1 pay data collection saga (which we previously reported on here, here, here, here, here, here, here, here, and here), private employers, including federal contractors, have been busy collecting and submitting EEO-1 pay data to the EEOC. The deadline for submissions was initially set for May 31, 2019, but has since been extended multiple times. Earlier this month, U.S. District Court Judge Tanya S. Chutkan ruled that the EEOC must continue its collection efforts until it has collected from at least 98.3% of eligible reporters and must make all efforts to do so by January 31, 2020. READ MORE
Yesterday, the EEOC announced that it does not intend to renew its request for authorization to collect employers’ pay data on the EEO-1 form in future years. The announcement comes less than three weeks before the September 30th deadline for employers nationwide to submit massive amounts of pay data for 2017 and 2018 (a deadline that is not impacted by the EEOC’s announcement).
The rollercoaster saga of the EEOC’s pay data collection (which we previously reported on including here, here, here, here, here, here, and here) began over three-and-a-half years ago when the EEOC announced in January 2016 its plan to revise the EEO-1 form to collect pay data (Component 2 data). The revised EEO-1 form requires employers to submit data on employees’ W-2 earnings and hours worked across broad job categories, and broken down by ethnicity, race, and sex. While the EEOC contends that the revised EEO-1 form will allow it to better assess pay discrimination, employers have expressed numerous concerns, including that the form may indicate “false positives,” as the broad EEO-1 job categories are not designed to group employees who perform similar work (as defined by federal and state equal pay and anti-discrimination statutes). READ MORE