Employers Not Required to Submit Pay Data or Follow Higher Salary Basis Threshold for Exempt Employees

Q.  What is the status of the EEOC’s requirement that we submit pay data with our annual EEO-1 Form?  Also, have there been any updates on the lawsuit blocking the DOL’s rule raising the salary basis for certain non-exempt employees?

A.  As we reported previously, the EEOC, as part of its effort to detect and remedy pay discrimination, amended its EEO-1 Form to require that employers with 100 or more employees submit detailed pay data on their workforce.  On August 29, 2017, the OMB sent a memorandum to the EEOC, staying implementation of this requirement.  Thus, at least for now, employers may limit the information provided on the EEO-1 Form to data on race, ethnicity and gender by occupational category (but not data on pay or hours worked).

There is similar relief for employers on the DOL overtime issue.  As we reported in a previous blog post, the United States District Court for the Eastern District of Texas granted a preliminary injunction last November, blocking the implementation of the Department of Labor’s amendments to the overtime provisions of the Fair Labor Standards Act.  On August 31, 2017, the Court took a further step, granting summary judgment blocking the rule.  The Court concluded that the Department of Labor exceeded its authority in enacting a rule raising the minimum salary threshold for executive, administrative and professional exemptions.  This likely is the official end to President Obama’s Final Overtime Rule, although President Trump may revisit the issue of the minimum salary threshold in the future.

For more information on these issues and their impact on employers, please see our Client Alert.

Lee Tankle

New York City Ban On Applicant Salary History Inquiries Effective October 31, 2017

Q. When will the new salary history law go into effect in New York City?

A. Effective October 31, 2017, employers are barred from asking job applicants in New York City about their salary history. The bill, which was passed by the New York City Council in early April, was signed into law by Mayor Bill di Blasio on May 4, 2017.

Salary history includes “current or prior wage, benefits, or other compensation.” The ban includes inquiries to an applicant’s current or former employer and searches of publicly available information for salary history.

To ensure compliance, employers should ensure that job applications for positions in New York City do not include inquiries about salary history. Employers should also update their internal policies and interviewing guidelines to ensure all relevant personnel are aware of the change.

For additional information, please see our previous post on the new law here:

– Jessica Rothenberg

New York City Employers May Not Inquire About Applicants’ Salary History

Q.  My company has employees in New York City.  We often ask applicants about their salary history as a starting point for negotiating and setting a new salary.  Are we still permitted to do this?

A.  Effective October 2017, it will be unlawful for employers to ask job applicants in New York City about their salary history.  Salary history includes “current or prior wage, benefits, or other compensation.”  The ban includes inquiries to an applicant’s current or former employer and searches of publicly available information for salary history.

The new law provides that employers can still engage in discussion with an applicant about his/her expectations with respect to salary, benefits, and other compensation, so long as the employer does not inquire about salary history or rely on salary history for determining compensation. Employers can also continue to run background checks and verify an applicant’s disclosure of non-salary related information. However, if the verification or background check discloses the applicant’s salary history, then the employer cannot rely upon it for determining salary.

Prospective employees can volunteer salary history (so long as it is “without prompting”), and in those cases, the employer can consider salary history in determining salary, and can verify the applicant’s salary history.

The new legislation aims to combat pay inequity by preventing employers from perpetuating pay inequity applicants may have experienced in the past. Such legislation has also recently been passed by Philadelphia (effective May 2017), as well as in numerous other cities and states. In 2016, Mayor Bill de Blasio issued an executive order prohibiting New York City agencies from asking prospective employees about their pay history.

The Philadelphia and New York City laws have many similarities. Like the New York City law, the Philadelphia law broadly defines wages as “all earnings of an employee,” including fringe benefits, wage supplements and “other compensation.” The Philadelphia law is enforced by Philadelphia’s Commission on Human Relations, and the New York law is enforced by its equivalent agency, the New York City Commission on Human Rights. Both laws provide that applicants can volunteer salary history, in which case the employer can rely on it to determine the new salary.

To prepare for this law, employers should ensure that job applications for positions in New York City do not ask about salary history. Employers should also update their internal policies and interviewing guidelines to ensure all relevant personnel are aware of the change. Employers who have employees both in and outside of New York City should consider whether to make such changes company-wide, or only to applicants for New York City positions.

Jessica Rothenberg

Philadelphia Employers May Not Ask Wage History Questions Under New Ordinance

Q.  My company is based in Philadelphia.  We often set salaries for new employees based on the applicant’s wage history.  Are we still permitted to do this?

A.  Effective May 23, 2017, a new Philadelphia Ordinance makes it unlawful for employers in Philadelphia to inquire about a prospective employee’s wage history or require disclosure of wage history as a condition of employment.  The law was passed to encourage employers to base salary offers on the job responsibilities of the position sought, rather than on the applicant’s prior wages.  Employers will no longer be able to rely on the wage history of a prospective employee when determining the wages of that individual, unless the individual knowingly and willingly disclosed his or her wage history to the employer.

To ensure compliance with the Ordinance, employers who do business in Philadelphia should start thinking about revising their employment applications to delete any questions inquiring about an applicant’s wage history.  Recruiters, HR personnel and managers will need to be trained about the new law so that these individuals know not to ask wage-based questions during the interview process.  In addition, employers should consider revising their EEO policies to add wage history to the list of protected categories.

-Tracey E. Diamond

 

 

 

 

Aggregating Pay Data in the New Year: Time to Get Your House in Order

Q.  I work for a company that employees more than 100 employees.  I heard somewhere that we now have to include pay data and hours worked on our EEO-1 forms.  Is that true?

A. Yes!  Beginning with calendar year 2017, employers with 100 or more employees will be required to submit pay data and hours worked in the newly revised EEO-1 report. Adding pay data to the form means that the EEOC and the OFCCP will now have a snapshot of employers’ pay practices across protected categories of sex, race and ethnicity.

The 2017 EEO-1 report will not need to be filed until March 2018.  However, it is important that employers prepare now so that their pay data for calendar year 2017 is compliant.

Click here for a Pepper Client Alert discussing this issue in more detail.

-Tracey E. Diamond