A Bill Prohibiting Questions About Past Compensation Introduced In Congress

By Kate S. Gold and Philippe A. Lebel

On September 14, 2016, Representative Eleanor Holmes Norton (D – D.C. At Large) introduced the Pay Equity for All Act of 2016 (the “PEAA”) in the U.S. House of Representatives.   In relevant part, the PEAA would amend the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. §§ 201 et seq., to prohibit employers from asking prospective employees about their previous wages or salary histories, including benefits or other compensation.  In addition to prohibiting these pre-hire inquiries, the PEAA prohibits employers from seeking out the information on their own.  The PEAA prohibits employers from retaliating against any employee or applicant because the employee opposed any practice unlawful under the law or for testifying or participating in any investigation or proceeding relating to any act or practice made unlawful by the PEAA.  Any “person” who violates the PEAA is subject to a civil penalty of $5,000 for the first “offense,” which increases by $1,000 for each subsequent offense, up to $10,000.  In addition, any person violating the PEAA is liable to each employee or prospective employee who is subject to a violation for special damages not to exceed $10,000 plus attorneys’ fees, as well as potential injunctive relief.

In her introductory remarks, Representative Norton explained that the purpose of the PEAA was to “help eliminate the gender and racial pay gap” and to “ensure that applicants’ salaries are based on their skills and merit, not on a potentially problematic salary history.” The bill initially was co-sponsored by Representatives Rosa DeLauro (D – CT), Jerrold Nadler (D – NY), and Jackie Speier (D – CA); subsequent co-sponsors include Representatives Gwen Moore (D – WI), John Conyers, Jr. (D – MI), Barbara Lee (D – CA), and Frederica S. Wilson (D – FL).  The PEAA was immediately referred to the House Committee on Education and the Workforce.

The PEAA follows the enactment of a similar piece of legislation by Massachusetts in August of this year. That new law, An Act to Establish Pay Equity, takes effect on July 1, 2018.

If passed, the PEAA could dramatically impact employers’ ability to gauge “market rate” pay for new employees. At the same time, setting pay prospectively based on employers’ objective beliefs about the positions in question, without the benefit of employees’ past pay histories, may reduce potential pay inequity in subsequent audits down the road.

Although the PEAA is in its early stages, and there is no guarantee that it will ultimately pass, employers should continue to monitor this important piece of legislation. The text of the current language of the bill can be accessed by the following link.

Maryland’s Expanded Equal Pay Law Takes Effect October 1, 2016

By Alexa E. Miller, Kate S. Gold and Lynne A. Anderson

Maryland joins California, New York and Massachusetts by passing legislation aimed at combating wage disparity based on gender. (For a discussion on California, New York and Massachusetts’s Equal Pay Laws, click on our previous posts.)

Expanding Equal Pay for Equal Work

The new law, which goes into effect October 1, 2016, amends Maryland’s existing Equal Pay for Equal Work Act by expanding the prohibition on wage discrimination based on “sex” to also include “gender identity.” The protection against pay discrimination for work performed in the same establishment and of comparable character or on the same operation encompasses more than just unequal payment of wages.  The new law also bars discrimination for “providing less favorable employment opportunities,” which includes: (1) assigning or directing an employee into a less favorable career track or position; (2) failing to provide information about promotions or advancement opportunities in the full range of career tracks offered by the employer; or (3) limiting or depriving an employee of employment opportunities that would otherwise be available but for the employee’s sex or gender identity.

New Defenses to Wage Differentials

The new law expands the permissible factors that employers can legitimately use to explain variations in wages to employees of one sex or gender identity. The law, as previously enacted, provided exceptions based on: (1) a non-discriminatory seniority system; (2) a non-discriminatory merit increase system; (3) jobs that require different abilities or skills; (4) jobs that require regular performance of different duties or services; and (5) work performed on different shifts or at different times of day. The new law adds defenses for (6) a system that measures performance based on a quality or quantity of production; or (7) a bona fide factor other than sex or gender identity, including education, training, or experience, provided that the factor is not based on or derived from a gender-based differential in compensation, is job-related and consistent with a business necessity, and accounts for the entire differential.

Increased Wage Transparency

Additionally, the new law includes provisions to promote pay transparency in the workplace. Specifically, employers may not prohibit an employee from inquiring about, discussing or disclosing their own wages or the wages of a co-worker, or from requesting that the employer provide a reason for why the employee’s wages are a condition of employment. Likewise, employers are prohibited from taking an adverse employment action against employees who inquire about, discuss, or disclose their own wages or the wages of other employees (if those wages have been voluntarily disclosed), ask employers to provide a reason for the employee’s wages, or aid/encourage other employees in exercising their rights under the law. Significantly, the law allows employers to maintain a written policy which establishes reasonable workday limitations on the time, place and manner for wage discussions. Such limitations must be consistent with standards adopted by the Commissioner of Labor and Industry and all other state and federal laws.

It’s important to note that the new law does not : (1) require employees to discuss or disclose their wages, (2) diminish employees’ rights to negotiate terms and conditions of employment (including compensation), (3) limit employees’ rights under a collective bargaining agreement, (4) obligate employers or employees to disclose wages, (5) permit disclosure of proprietary information, trade secrets or information that is otherwise protected by law without written consent of the employer, or (6) permit disclosure of wage information to a competitor of the employer.

Takeaways for Employers

Maryland’s amended equal pay law applies to employers of any size. Therefore, Maryland employers should be proactive and conduct internal audits to analyze compensation data and evaluate the non-discriminatory reasons for any pay disparities. Notably, the definition of “same establishment” was expanded to include any workplace of the same employer located in the same county in the state, broadening the scope of comparators. Employers should also train managers and supervisors about the pay transparency provisions and modify existing policies, such as non-disclosure and anti-retaliation policies, to reflect the new law’s requirements.

If you have any questions or concerns about this alert please contact the author named above or your usual Drinker Biddle contact.

Illinois Employers Must Provide Qualifying Employees Two Weeks of Unpaid Child Bereavement Leave

By Stephanie Dodge Gournis and Shavaun Adams Taylor

Illinois is now the second state to require that employers provide unpaid bereavement leave to eligible employees under its Child Bereavement Leave Act. This Act provides that employers with at least 50 employees must provide two weeks (10 working days) of unpaid leave due to the loss of a child. In the event of death of more than one child in a 12-month period, an employee is eligible for up to six weeks of bereavement leave.

Coverage

The Act defines “employers” and “employees” in the same manner as they are defined under the Family Medical Leave Act (FMLA). Thus, an employee will be eligible for child bereavement leave under Illinois law if the employee has been employed by the employer for at least 12 months and has worked at least 1250 hours during the previous 12-month period. However, an employee who has exhausted his or her FMLA leave is not eligible for child bereavement leave under this Act.

While an employee’s eligibility for child bereavement leave is tied to the employee’s FMLA entitlement, the employee’s bereavement leave cannot be deducted from the employee’s available FMLA leave. In other words, an employee can take two weeks of bereavement leave and still be eligible for 12 weeks of FMLA leave for another qualifying event.

The Act defines “child” as “an employee’s son or daughter who is a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis.”

Bereavement Leave

An employee may use bereavement leave to:

  • Attend the funeral or alternative to a funeral of a child;
  • Make arrangements necessitated by the death of the child; or
  • Grieve the death of the child.

Employees must take such leave within 60 days after the date on which they receive notice of the death of the child. Employees who wish to take bereavement leave must provide 48 hours’ advance to their employer, unless providing such notice is not reasonable and practicable.

Employers may require that an employee provide reasonable documentation, such as a death certificate, a published obituary, or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution, or government agency.

Substitution of Paid Leave

Under the Act, employees may elect to substitute paid leave, including family, medical, sick, annual, or personal leave, that is available pursuant to federal, state, or local law, a collective bargaining agreement, or employment policy. Unlike FMLA provisions, the right to substitute paid leave rests with the employee and the Act does not provide any right to the employer to require an employee to use available paid leave.

Retaliation and Enforcement

An employer may not retaliate or take any other adverse action against any employee who:

  • Exercises rights or attempts to exercise rights under this Act;
  • Opposes practices which such employee believes to be in violation of the Act; or
  • Supports the exercise of rights of another under this Act.

If an employee feels that his or her rights have been violated under this Act, he or she may file a complaint with the Illinois Department of Labor or file a civil action in court within 60 days after the date of the violation.

An employer who violates this Act is subject to a civil penalty not to exceed $500 for the first offense and not to exceed $1,000 for the second offense.

The Emergence of Paid Sick Leave Laws

By Thomas J. Barton and Matthew A. Fontana

In last week’s blog entry, Lynne Anne Anderson highlighted the increasing number of states that mandate employers to provide school related unpaid leave for parents.  This week’s entry looks at another growing trend in the employee leave space, paid sick leave.  An increasing number of states and localities now provide paid sick leave. It is important that both employers and employees are aware of this trend and whether these laws apply to their locality or state.

The following states (and District of Columbia) have paid sick leave laws:

State: Coverage/Eligibility: Amount of Paid Sick Time: Can Sick Time Be Used to Care for Loved Ones:
Connecticut Hourly workers in certain “service” occupations who work for businesses with 50 or more employees. [1] Up to 40 hours per year Yes: children and spouses.
California Workers employed in California for 30 or more days a years, including state and local public workers. [2] Workers can earn up to 48 hours or 6 days but an employer isn’t required to allow use of more than 24 hours or 3 days a year. Yes: children, parents, grandchildren, grandparents, spouses, registered domestic partners and siblings. 
Massachusetts Workers employed in Massachusetts who do not work for cities and towns. Workers in businesses with 11 or more employees up to 40 hours of paid sick time a year.  Yes: children, spouses, parents, or parents of a spouse.
Oregon Workers employed in Oregon, including public workers but excluding independent contractors. Workers in businesses with at least 10 or more employees: up to 40 hours of paid sick time a year. Yes: children, spouses, same-sex domestic partners, parents, parents of a same-sex domestic partner, grandparents, and grandchildren.
Washington, D.C. Individuals employed by an employer within Washington D.C. [3] 24 or fewer employees: up to 24 hours a year.25-99 employees: up to 40 hours a year.

100 or more employees: up to 56 hours a year.

Yes: children, grandchildren, spouses of children, siblings, spouses of siblings, parents, and registered domestic partners.
Vermont Workers employed by an employer in Vermont for an average of no less than 18 hours per week during a year.  [4]  From 1/1/17-12/31/18: up to 24 hours a year. After 12/31/18: up to 40 hours a year.   Yes: children, parents, parents-in-law, grandparents, spouses, grandchildren and siblings.

As demonstrated by the above chart, paid sick leave laws vary from state to state and it is important to know the detail of the laws that apply to your business. For example, the coverage/eligibility requirements, use of sick time to care for loved ones, and the amount of paid sick leave available are different for each of the states with paid sick leave laws.  Other differences include the rate that paid sick leave is earned, whether paid sick leave can be carried over to subsequent years, and whether paid sick leave applies to care for a new born child.  As an example, in Connecticut, sick time is earned at a rate of one hour for every forty hours worked, whereas in California, sick time is earned at a rate of one hour for every thirty hours worked.  Additionally, Oregon’s law is the only one that allows the use of paid sick leave to bond with a newborn child.  [5]  The bottom line for business is if you operate in a state with a paid sick leave law, it is important to carefully review the law and make sure your policies conform to its requirements.

Beyond states, several cities and counties have paid sick leave laws, including the following: Montgomery County (MD), San Francisco, Seattle, New York City, New Jersey Eleven (Newark, Passaic, East Orange, Paterson, Irvington, Trenton, Montclair, Bloomfield, Jersey City, Elizabeth, and Plainfield), Oakland (CA), Tacoma, Philadelphia, Emeryville (CA), Pittsburgh, Spokane, Santa Monica (CA), Minneapolis (effective date July 1, 2017), and Chicago (effective date July 1, 2017).  As with the state paid sick leave laws, the eligibility requirements, amount of sick leave available, and how that sick leave can be used differ from locality to locality and require individualized analysis.

Even if your business does not operate in a locality that currently has a paid sick leave law, it is increasingly likely that your state or locality may soon consider such a law.  The combination of the growth of paid sick leave laws and their prominence in policy discussions surrounding support for families continues to build momentum for their adoption in more communities.  Currently, New Jersey, Maryland, and Washington have paid sick leave legislation that is under consideration and there is growing support for these laws in numerous other states.

Employers should stay tuned and follow these developments to ensure that their sick leave policies and procedures stay compliant in the ever changing world of leave laws.


[1] For a full list of which professions are covered “service” occupations go to www.ctdol.state.ct.us./wgwkstnd/SickLeaveLaw.htm

[2] Workers subject to the Railway Labor Act (i.e. employees of airlines and railroads) are exempted. Workers who provide in-home supportive care are exempted until July 1, 2018.

[3] The following individuals are exempted: independent contractors, students, health care workers choosing to participate in a premium pay program, unpaid volunteers. 

[4] The following individuals are exempted: workers under 18 years of age; workers employed for 20 or fewer weeks in a year in a job scheduled to last 20 or fewer weeks; certain State workers excluded from the State classified service; certain employees who work on a per diem or intermittent basis at a health care or long-term care facility; certain per diem or intermittent workers who only work when indicating availability, have no obligation to accept the work, and have no expectation of continued employment; certain substitute educators for a school district or supervisory district/union if under no obligation to work a regular schedule or period of long-term (30 or more consecutive school days) substitute coverage; and certain sole proprietors/partner owners of an unincorporated business.

[5] California has a paid family leave law that provides paid leave for the care of a newborn child.