Counseling & Compliance Training - Page 54 of 89

What Retailers Need to Know About the California Transparency in Supply Chains Act

Retail sellers and manufacturers across the country that conduct a threshold amount of business in California must comply with the California Transparency in Supply Chains Act (“Supply Chains Act” or “Act”). CAL. CIV. CODE § 1714.43. The Act, which became effective in January 2012, requires those retailers and manufacturers to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains. Id. § 1743.43 (a)(1). Specifically, those companies must disclose on their website to what extent they: (1) engage in verification of product supply chains to evaluate and address risks of human trafficking and slavery; (2) conduct audits of suppliers; (3) require direct supplies to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the countries in which they are doing business; (4) maintain accountability standards and procedures for employees or contractors that fail to meet company standards regarding slavery and human trafficking; and (5) provide employees and management training on slavery and human trafficking. Id. § 1743.43 (c).

By its terms, the Act does not require manufacturers and retailers to take affirmative action to detect or prevent slavery or human trafficking in their supply chains. It requires only that the company make the mandated disclosures. Nevertheless, manufacturers and retailers should be aware of the potential for attorney general enforcement actions, as well as enterprising litigation by consumers, based on violations of the statute.

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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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Bag Check Claims: Not Quite Yet in the Bag for California Employers

California employers that perform bag checks on employees in order to deter theft breathed a sigh of relief in 2015 after a California federal court’s ruling in Frlekin v. Apple Inc., No. C 13-03451, 2015 WL 6851424 (N.D. Cal. Nov. 7, 2015), which provided that state law does not require that Apple compensate hourly employees for time they spend undergoing security checks. The ruling followed another favorable decision in December 2014, when the U.S. Supreme Court held in Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513, 518 (2014) that security checks do not constitute compensable work activities under federal law. After years of increased attention having been paid to bag check actions, the decisions slightly cooled the plaintiffs’ bar’s enthusiasm for such actions. But despite the victories, California employers should not let their guard down quite yet. A number of recent high-value settlements continue to make bag check claims attractive.

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Third Circuit Makes it Easier to Prove ADEA Disparate Impact Claims By Use of Subgroups of Older Workers

The Third Circuit Court of Appeals recently issued a precedential decision, Karlo, et al. v. Pittsburgh Glass Works, LLC, that likely will make it easier for subgroups of older workers to bring lawsuits under the Age Discrimination in Employment Act (“ADEA”), on a “disparate impact” theory of liability. It also creates a split with the Second, Sixth and Eighth circuits, paving the way for greater uncertainty for national employers.

The Karlo Decision – Comparison of Subgroups Permitted For Disparate Impact Analysis

The defendant Pittsburgh Glass Works, LLC instituted reductions in force that resulted in the termination of approximately 100 employees. The plaintiffs, a group of workers all over the age of 50, brought a putative ADEA collective action, asserting, among other things, disparate impact claims. To establish a prima facie case for disparate impact under the ADEA, a plaintiff must (1) identify a specific, facially neutral policy, and (2) proffer statistical evidence that the policy caused a significant age-based disparity. The plaintiffs alleged that they had identified a policy that disproportionately impacted a subgroup of employees older than 50. However, because the policy favored younger members of the protected class (i.e., employees older than 40 but younger than 50), adding them into the comparison group did not show any statistical evidence of disparity. The district court initially certified a collective action, but subsequently granted a motion to decertify and then granted summary judgment to the employer.

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Paid Sick Leave Law in Morristown, New Jersey Became Effective on January 11, 2017

This Ordinance, which was passed in September 2016, requires employers in Morristown, New Jersey to provide a certain amount of paid sick time per year depending on the size of the employer. Generally, employees who work more than 80 hours a year in Morristown will be covered under this Ordinance. The Morristown Ordinance is the 13th local paid sick leave ordinance enacted within New Jersey, following similar ordinances in the towns and cities of Bloomfield, East Orange, Elizabeth, Irvington, Jersey City, Montclair, Newark, New Brunswick, Passaic, Paterson, Plainfield, and Trenton.

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Laboring Under New Laws

*Originally published by CalCPA in the January/February 2017 issue of California CPA — the original article can be found here.

Few things in this world can be certain, except that the California Legislature will expand regulation of employers each year and the sun will come up tomorrow. In an apparent pendulum swing, 569 bills introduced in 2016 mention “employer,” compared to 224 in 2015 and 574 in 2014. Most of those bills did not pass, and of the ones that did, most were not signed into law by Gov. Brown. Essential elements of selected bills that became law affecting private employers, effective Jan. 1, 2017, unless otherwise mentioned and organized by Senate and Assembly bill number, follow.

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