The past month has brought notable pay equity developments to the Mid-Atlantic, including pending legislation in Maryland, and a Third Circuit decision that might have far-reaching effects beyond the Philadelphia salary history ban that it upheld. READ MORE
On February 6, 2020 the U.S. Court of Appeals for the Third Circuit upheld a Philadelphia pay equity ordinance banning employers from inquiring into prospective employees’ prior pay or relying on prior pay in making compensation decisions unless candidates knowingly and willingly disclose the information. In upholding the ordinance, the Third Circuit vacated a lower court decision that enjoined enforcement of the inquiry provision on the grounds that it violated employers’ First Amendment free speech rights. While the Third Circuit acknowledged that the ordinance implicated First Amendment rights, the court found that there was “a plethora of evidence” provided by the city to meet its burden of clearing intermediate scrutiny for commercial speech. Consequently, it was reasonable for the city to conclude that the inquiry provision would address gender and race-based wage gaps based on experiments, witness testimony, and historical research concluding as much. READ MORE
The New York State Department of Labor has created a website to provide guidance on the state’s recent Salary History Ban. We previously reported on the state’s Salary History Ban in detail here after it was passed by the New York legislature. New York Governor Andrew Cuomo signed the salary history ban into law on July 10, 2019 and it went into effect on January 6, 2020. The new website summarizes the Salary History Ban by explaining that, “The new law prohibits all employers – both public and private – from asking prospective or current employees about their salary history and compensation. It also prohibits businesses from seeking similar information from other sources.” READ MORE
Oregon employers looking to evaluate their pay equity picture in 2020 should be aware of a handful of updates to the state’s equal pay law that went into effect on January 1.
Oregon overhauled its law in 2017, expanding its coverage beyond sex-based pay differentials and modifying the standard for comparators whose pay must be equal absent a legitimate business justification. SB123 makes a handful of small but potentially significant changes:
- Existing law provided that pay differentials can be justified based on a seniority system, merit system, or system that measures earnings by quantity or quality of production. The amendment adds a statutory definition of “system”: “a consistent and verifiable method in use at the time that a violation is alleged.” Correspondingly, the more onerous definition of “system” that had appeared in OAR 839-008-0015 was repealed.
- Existing law included a limited statutory safe harbor provision (ORS 652.235), which authorizes a motion to disallow compensatory and punitive damages in suits under the state’s equal pay law if an employer has completed a good faith “equal-pay analysis” within three years pre-suit. That provision was revised to require that a qualifying equal-pay analysis include “a review of practices designed to eliminate unlawful wage differentials.” The revision also requires an employer attempting to avail itself of the safe harbor to show that it has “made reasonable and substantial progress toward eliminating unlawful wage differentials for the employer’s employees.” The revision eliminates reference to the specific protected class asserted by a particular plaintiff and instead addresses unlawful wage differentials more generally.
- The new law provides that evidence that an employer increased an employee’s pay as a result of conducting an equal-pay analysis may not be considered as an admission of liability in an equal pay case under state law.
- The law authorizes pay differences where an employee performs modified work due to a compensable injury or medical condition, alleviating concerns employers might have had about pay disparities in such circumstances.
- Finally, the amendment expressly addresses unionized workforces, providing that pay differences can be justified if one or more of the enumerated statutory defenses is contained in a collective bargaining agreement. This amendment may represent an effort to address concerns previously expressed by Oregon employers who employ both non-unionized employees and members of unions that bargain for pay rates along with other conditions of work. But it is unclear what impact it will have given that the amended law continues to require that the pay differences be tied to one of the previously enumerated defenses.
We will continue to monitor developments and amendments in Oregon and report on them here.
Orrick’s Equal Pay Pulse has been tracking the nationwide wave of salary history bans in recent years. A growing number of states and territories now have laws restricting the use of salary history information, including Alabama, California, Colorado, Connecticut, Delaware, Hawaii, Maine, Massachusetts, New Jersey, New York, North Carolina, Oregon, Puerto Rico, Vermont, and Washington. Illinois became the latest state to catch this wave with a recent amendment to the Illinois Equal Pay Act of 2003. READ MORE
This year has seen states enact a litany of laws aimed at addressing pay equity issues, chief among them salary history bans. We previously reported on these issues here, here, and here. Mid-way through 2019, more and more states continue moving full speed ahead with legislation to bar employers from asking about candidates’ prior salary during the hiring process. Since our last report on this topic, the latest newcomers in this area are Washington and New Jersey. These states (like others) have expressly justified these bans based on legislative findings that “[t]he long-held business practice of inquiring about salary history has contributed to persistent earning inequalities” (see H.B. 1696, § 3(a), 66th Leg., Reg. Sess. (Wash. 2019) (enacted)), while courts evaluating such provisions have found that “more is needed” to establish the presumed connection. See Chamber of Commerce for Greater Philadelphia v. City of Philadelphia, 319 F. Supp. 3d 773, 797-98 (E.D. Pa. 2018). Regardless, though, these laws are now on the books and employers should be mindful of their requirements going forward. READ MORE
As part of a marathon finish to the 2019 legislative session, the New York State legislature recently passed two new equal pay bills that build on other state and local laws enacted within recent years. The first of the two bills, Senate Bill No. S5248A, broadens the scope of § 194 of the New York Labor Law (“NYLL”) to establish prohibitions on compensation discrimination between employees performing work that is “substantially similar,” and by prohibiting compensation discrimination on the basis of any protected status or classification under the New York State Human Rights Law (“NYSHRL”). The second bill, Senate Bill No. S6549, establishes a broad proscription on salary history inquiries during the recruitment and hiring process. Together, the bills cement New York’s pay equity regime as among the strongest in the country and introduce new compliance challenges and questions in analyzing employee compensation. READ MORE
The EEOC has been no stranger to headlines in recent months, particularly on the issue of equal pay. As we recently reported, the EEOC’s long-dormant pay data collection rule, revived by the D.C. District Court in March, has caused an uproar of speculation as employers race to comply with increased data reporting requirements for their annual EEO-1 forms by September 30, 2019. But the EEOC is also busy addressing pay issues in court.
As readers of this blog know, pay equity laws and regulations are expanding rapidly in the U.S. at both the federal and local level, as well as internationally. And while regulatory compliance is critical and remains an area to watch (and we’ll keep covering it for you here), employers can take a short breath of relief after a recent victory in one of the key proving grounds for equal pay claims—class and collective action litigation.
On March 29, 2019, in Ahad v. Board of Trustees of Southern Illinois University, the U.S. District Court for the Central District of Illinois decertified an equal pay collective action brought by a group of female physicians. Although the plaintiff alleged that she and other female physicians were paid less than male comparators for equal or similar work under the same compensation plan, Judge Sue E. Myerscough concluded that the opt-in members of the collective action had widely varying practices, duties, and compensation structures that would require many individualized inquiries, making the case inappropriate for treatment as a collective action.
On April 12th, Maine joins a growing list of jurisdictions, including California, Connecticut, Delaware, Hawaii, Massachusetts, New York City (as well as other cities within New York) Oregon, Puerto Rico, and Vermont, that restrict private employers from obtaining salary history information from job candidates and applicants. Within the Northeast region, only Rhode Island and New Hampshire have yet to enact comparable regulations in the public or private sectors, with a bill, HB 221, presently pending before the New Hampshire legislature. READ MORE