In April 2018, an en banc Ninth Circuit held in Rizo v. Yovino that an employer cannot justify a wage differential between male and female employees under the Equal Pay Act by relying on prior salary. Before the Ninth Circuit published its decision, though, Judge Stephen Reinhardt passed away. On February 25th, the U.S. Supreme Court vacated the Ninth Circuit’s decision, reasoning that the appellate court should not have counted Reinhardt’s vote because he passed away before the decision was issued. Instead, the Ninth Circuit should not have released the opinion. READ MORE
2019 is not even two months old and already there are significant developments in equal pay legislation. As we explained recently, there is proposed federal legislation that reignites the battle to pass the “Paycheck Fairness Act.” And now states are getting in on the action with a flurry of legislative activity around pay equity issues – particularly among legislatures that saw a change in party control as a result of the November elections. In fact, a number of states have introduced a variety of pay equity proposals, making clear that salary history bans and wage discussion protections are here to stay. Proposed new legislation also looks to refine the bona fide factors that employers may consider in setting pay, as well as remedies available under the pay laws. READ MORE
On January 1, 2019 at the stroke of midnight, Hawaii joined a growing list of states and municipalities to ban prospective employers from asking applicants about their prior salary history. As we have previously reported, several other jurisdictions have already passed similar laws that place restrictions on salary history during the application process, including California, New York City, Westchester, and Suffolk County, New York. READ MORE
Joining New York City, Westchester, and Albany, the Suffolk County Legislature, on November 20, 2018, adopted its own variation of a salary history ban.
As part of its effort to close gender-based pay gaps, California will now require companies to increase female representation on boards of directors.
Currently, one in four publicly held corporations in California have no women on their boards of directors. SB 826, which Governor Jerry Brown signed into law at the end of September, requires that all publicly held corporations based in California have at least one woman director by December 31, 2019. That is not the end of the requirements; by December 31, 2021, companies with five authorized directors must have a minimum of two female board members, and companies with at least six directors must have a minimum of three females on the board. The California Secretary of State will publish the names of compliant and non-compliant companies on an annual basis. In addition to the “name and shame” provisions, non-compliant companies face fines of $100,000 for the first violation and $300,000 for subsequent violations. READ MORE
As we reported last month, the Oregon Bureau of Labor and Industries (BOLI) issued proposed regulations interpreting the provisions of the new Oregon Equal Pay Act of 2017, which will become effective January 1, 2019.
On November 19, 2018, after receiving a number of comments on proposed rules BOLI filed final rules with the Secretary of State. Stakeholders that provided input on the potential impact of the rules as originally proposed ranged from large law firms and industry groups to small business owners and farmers, as well as multiple higher education institutions (including Oregon State University, Portland State University, the University of Oregon, and the Oregon Community College Association).
Some of the noteworthy changes between the proposed and final rules are that the final rules:
- Added the language “regardless of job description or job title” in the definition of “work of comparable character,” thus emphasizing that job title or written job description alone cannot establish that any two employees are (or aren’t) “substantially similar.” OAR 839-008-0000(17).
- Clarified in OAR 839-008-0005(2) what it means to “screen job applications based on current or past compensation.” In particular, the final rules narrow the scope of this language to make clear that the prohibition of “screen[ing]” in ORS 652.220(1)(c) bars only the consideration of current or past compensation to determine “a job applicant’s eligibility or suitability for employment.” By contrast, the draft rules had proposed that prohibited “screen[ing]” would include any use “to group, sort, or select [employees] at any stage of the hiring process,” or to assess “[a] current employee’s eligibility for an internal transfer, move or hire to a new position with the same employer.” This narrowing makes clear that the limits of the new prohibition on using prior pay to “screen.”
- Added “creativity” and “precision” as examples of the type of “skill” considerations to be evaluated in determining whether any two employees do, in fact, perform “work of a comparable character.” OAR 839-008-0010(1)(b).
- Eliminated language in proposed rule OAR 839-008-0010(2) that would have stated that “[m]inor differences in knowledge, skill, effort, responsibility, and working conditions will not prevent jobs from being comparable.” This change is consistent with comments submitted by a host of employers—including NFIB Oregon (a non-profit advocacy group for small businesses), the Oregon Farm Bureau, and Oregon Business & Industry—who expressed concern that the “minor differences” language could create confusion and be read to conflict with the statutory standard of “substantially similar.”
- Revised OAR 839-008-0010(2) to make clear that “[e]valuations of work of comparable character need only consider comparisons of Oregon employees.”
- Eliminated the proposed “Equal-Pay Analyses Surveys” rule.
A number of concerns expressed by commentators went unaddressed in the final rules, however. Several commenters requested, but BOLI has not yet provided, a “pay calculation” tool akin to that provided by the Massachusetts Attorney General’s Office. In addition, commentators noted that the new law includes as “protected classes” several groups on which employers may not routinely collect demographic information (e.g., sexual orientation or marital status), which make it impossible for employers to proactively monitor pay differentials across these groups which the law purports to prohibit. And a number of others asked the rules to clarify the law regarding pay differentials that may exist between employees in collective bargaining units and those outside those units, yet the final rules do not speak to the issue.
By and large, though, Oregon employers should be heartened by these changes. They eliminate some of the more problematic provisions of the rules as originally proposed and underscore the fact-specific analysis of work performed needed to determine whether employees in fact perform “work of comparable character” within the meaning of the new law.
Orrick will continue to monitor additional developments in interpreting and applying the new law as it takes effect, and to advise employers in Oregon on compliance strategies in light of the new law.
The Oregon Bureau of Labor and Industries (BOLI) has issued proposed regulations interpreting the provisions of the new Oregon Equal Pay Act of 2017, which will become effective January 1, 2019. Although the prohibition against “seek[ing]” salary history from applicants already is in effect, many of the law’s most significant provisions go into effect on January 1. READ MORE
A growing number of state and local governments have passed equal pay laws in recent years. These statutes and ordinances have varied in their specific content and have created a patchwork of legal requirements vexing employers who are attempting to comply. Two states have added wrinkles to this patchwork. While many of the obligations have favored employees, Massachusetts and Oregon have attempted to tip the scales to employers by creating “safe harbor” provisions aimed at providing some form of relief for employers who perform voluntary pay audits and correct any adverse findings through “safe harbor” provisions. These provisions, however, raise significant questions that employers must consider before concluding that they are fully protected. READ MORE
On August 28, 2018, a judge in Los Angeles County Superior Court issued one of the first decisions – if not the first decision – on a motion to certify a putative class action under the state’s revised Equal Pay Act, Cal. Labor Code § 1197.5 (“EPA”). See Bridewell-Sledge, et al. v. Blue Cross of California, No. BC477451 (Los Angeles Sup. Ct. Aug. 28, 2018) (Court’s Ruling and Order re: Pls.’ Mot. for Class Certification). Specifically, the court denied the plaintiffs’ motion to certify classes of all female and all African American non-exempt employees of Anthem Blue Cross California and related entities. The complaint alleged both violations of the EPA, as well as discrimination in promotions and pay in violation of the Fair Employment and Housing Act (Cal. Gov. Code §12900 et. seq.).
The California Pay Equity Task Force recently published guidance and approved resources for employer compliance with the state’s equal-pay laws. As we continue to track developments in this arena and await further interpretation from the courts, employers should be aware of this comprehensive and illustrative guidance in reviewing their hiring and compensation practices. READ MORE