How the New Tax Law Will Impact Employers in 2018

Just before the holiday break, Congress passed the Tax Cuts and Jobs Act (H.R. 1), which was signed into law by President Trump on December 22, 2017. Although the far-reaching implications of the new tax law won’t be fully realized for some time, there are several noteworthy provisions that will impact employers immediately.

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DOL Announces Minimum Wage Increase for Federal Contractors

On September 15, 2017, the U.S. Department of Labor (“DOL”) announced the 2018 minimum wage rate for covered federal contractors and subcontractors, as required by Executive Order 13658.

Beginning January 1, 2018, the minimum wage for covered contractors will increase from $10.20 per hour to $10.35 per hour. The minimum cash wage for tipped employees performing work on or in connection with a covered federal contract will also increase from $6.80 per hour to $7.25 per hour, effective January 1, 2018. If the worker’s tips combined with the required cash wage of at least $7.25 per hour do not equal the minimum rate, then the contractor must increase the cash wage paid to a tipped employee to bring him or her up to $10.35 per hour.

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Is Your Parental Leave Policy Really Gender Neutral?

On June 15, 2017, J.P. Morgan Chase employee Derek Rotondo filed a charge with the Equal Employment Opportunity Commission (“EEOC”) alleging that the company’s parental leave policy discriminates against males by relying on a sex-based stereotype that mothers are the primary caretakers of children, thereby denying fathers paid parental leave on the same terms as mothers. The EEOC charge, filed on a class-wide basis, seeks relief on behalf of himself and all fathers who were or will be subject to J.P. Morgan’s parental leave policy.

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Breaking Down the “Buy American and Hire American” Executive Order

On April 18, 2017, President Trump signed an Executive Order stating that “it shall be the policy of the executive branch to buy American and hire American.” Here’s what you need know:

Buy American:  In an effort to promote American manufacturing and domestic purchasing, federal agencies are tasked with improving enforcement of what the Executive Order collectively refers to as “Buy American Laws.” This assortment of laws consists of all existing statutes, regulations, rules and executive orders relating to federal procurement or federal grants that require or provide a preference for goods, products or materials produced in the United States, including iron, steel, and manufactured goods.

Under the Executive Order, federal agencies are directed to:

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Philadelphia Wage Equity Ordinance On Hold … For Now

Earlier this year, Philadelphia became the first city to pass a law prohibiting employers from inquiring about a job applicant’s wage history and restricting their ability to consider wage history in setting new employee compensation. The pay equity ordinance was enacted to halt the perpetuation of gender discrimination in compensation practices.

As has been widely reported, the Philadelphia Chamber of Commerce filed a lawsuit on April 6, 2017 to challenge the ordinance, which was scheduled to go into effect on May 23, 2017. The Chamber also filed a motion for a preliminary injunction, asking the Court to enjoin the enforcement of the ordinance while its lawsuit is pending, on the grounds that the ordinance violates businesses’ free speech rights under the First Amendment and is unconstitutionally vague.  The City of Philadelphia’s apparent first response has been to question whether the Chamber of Commerce even has standing to bring a lawsuit challenging the ordinance.

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Get Ready to Comply: All Signs Point to Enforcement of the Enhanced EEO-1 Form and Reporting Obligations

For approximately fifty years, the Equal Employment Opportunity Commission (“EEOC”) has collected workforce data about race, gender, ethnicity and job category from all businesses with 100 or more employees, using the EEO-1 report.  In an effort to combat pay discrimination, last year the EEOC announced that it finalized regulations expanding the information collected in the annual EEO-1 report to include pay data.

The revised EEO-1 form requires employers to collect aggregate W-2 earnings and report the number of employees in each of the twelve pay bands (spanning from $19,239 and under to $208,000 and over) for the ten EEO-1 job categories (Executive/Senior Level Officials and Managers; First/Mid Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; Service Workers) and classified by race, sex and ethnicity.  The revised EEO-1 form has been largely criticized by employers claiming that the collection of W-2 earnings, without any context to explain legitimate non-discriminatory reasons for pay disparities (e.g., education, training, experience, tenure, merit, etc.) will unnecessarily open the door to increased scrutiny and investigations.  To make matters worse, the EEOC has not been very forthcoming about how the information would be analyzed and used, other than as a “screening tool” to identify pay discrimination.

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