2021 continues the trend of increasing regulation of the workplace by state and local governments. Although it is not possible to discuss all state and local laws, this update provides an overview of recent and upcoming legislative developments to help you and your organization stay compliant. (Please note that developments specifically related to minimum wage rates and COVID-19 are not included.)
Earlier this week, the New Jersey General Assembly passed a bill that would amend the New Jersey Law Against Discrimination (“NJLAD”) to address specifically pay differentials among employees of different sexes who perform “substantially similar” work. The amendment, which the state Senate passed last month, will now be delivered to the Governor for consideration.
As the NJLAD exists now, an employee can bring a pay-related claim only by alleging that the differential amounts to sex discrimination and satisfying a comparatively higher standard. If the bill is signed into law, New Jersey would follow in the footsteps of other states like New York and California, which have recently updated their discrimination laws to provide a separate cause of action specifically for unequal pay.
The bill, if enacted into law, would severely limit the circumstances under which an employer can pay male and female employees different amounts for “substantially similar” work. An employer would be permitted to do so if it can demonstrate that it is utilizing a seniority (pay based on tenure) or merit (pay based on achieving certain goals) system. Alternatively, the employer would need to demonstrate that each of the following factors exists:
• The differential is based on one or more legitimate, bona fide factors other than sex, such as training, education or experience, or the quantity or quality of production;
• The factor or factors do not perpetuate a sex-based differential in compensation;
• Each of the factors is applied reasonably;
• One or more of the factors account for the entire wage differential; and
• The factors are job-related with respect to the position in question and based on a legitimate business necessity, and there are no alternative business practices that would serve the same business purpose without producing the wage differential.
If enacted, the New Jersey bill would also significantly increase potential employer exposure, in that the recovery period would be extended to pick up the entire time period when the pay differential existed.
With the passing of this bill by both houses, and with laws specifically targeting gender-based pay differences on the rise generally, employers would be wise to look at their employees’ titles and job descriptions to identify “substantially similar” positions and any pay differentials among the employees in those positions. Where such differences exist, employers will want to explore the reason for those differences and whether changes need to be made. If an employer has an established seniority or merit-based system on which it intends to rely, it is important that the system be set forth in detail and made available to all employees, so that there is no question as to its existence and applicability later.
Local governments or voters often pass statutes or ordinances on employment-related subjects that require employers to ensure that their policies are compliant not just on a state-by-state basis, but even on a city-by-city or county-by-county basis within the same state. During this past week’s election, voters around the country considered a number of local employment-related ballot initiatives, some noteworthy examples of which are below:
Voters in Elizabethtown, New Jersey Approve Paid Sick Leave
Elizabethtown, New Jersey joins a number of other cities (including several in New Jersey) in enacting a paid sick leave ordinance. Voters approved a measure that requires employers to offer one hour of paid sick time to employees for each 30 hours worked.
Voters in Houston, Texas Reject Anti-Discrimination Ordinance
Many cities have enacted local anti-discrimination ordinances which complement or mirror anti-discrimination statutes under state and federal law. In May 2014, the Houston city council passed an ordinance that would have banned discrimination based on characteristics already protected by federal law (such as age, sex and race), as well as sexual orientation and gender identity, which are not characteristics protected by federal law. In last week’s election, Houston voters rejected the ordinance. Opponents of the ordinance had labelled it the “bathroom ordinance” and claimed that its provisions concerning transgender people would enable men who wear women’s clothes – and sexual predators – to access public women’s restrooms.
Minimum Wage Measures in Portland, Maine and Tacoma, Washington
Voters in Tacoma, Washington supported a phased-in increase to the city’s minimum wage to $12 by 2018, but rejected a more ambitious increase that would have immediately raised it to $15. Similarly, voters in Portland, Maine rejected a measure that would have increased the city’s minimum wage from $7.50 to $15 in just four years, instead sticking with a hike recently enacted by the city council that would raise it to $10.10 in 2016, $10.68 in 2017, and tie increases from 2018 forward to the Consumer Price Index.
Marijuana Initiatives in Ohio, Colorado and Michigan
The increasing trend toward marijuana decriminalization (and outright legalization) presents multiple issues for employers, including reconciling their drug-free workplace policies with medical marijuana patients’ rights, and whether or not they can punish employees for engaging in what is now deemed to be a legal activity. In Ohio, voters rejected a marijuana legalization measure that would have ended marijuana prohibition in the state. Nonetheless, most analysts believe that the rejection is not reflective of voters’ opposition to marijuana legalization per se, but rather opposition to the specifics of the ballot initiative, which would have granted an effective oligopoly on marijuana production within the state to a small handful of the initiative’s wealthy backers. In Colorado, voters approved a ballot measure that gives state lawmakers permission to spend (rather than return to state residents, marijuana growers, and recreational users) $66.1 million in taxes collected from the sale of recreational marijuana, further legitimizing the state’s prior legalization of recreational use. And voters in the Michigan municipalities of Keego Harbor and Portage approved initiatives that effectively repealed the city’s prohibition on the possession, use and transfer of up to an ounce of recreational marijuana.
Employers can expect employment-related ballot initiatives similar to those listed above in upcoming elections. For example, building upon the passing of minimum wage increases in San Francisco and Los Angeles, it is likely that in 2016 California voters will consider a measure to increase the minimum wage to $15 statewide by 2021. Multi-jurisdictional employers should keep in mind that their policies may need to be re-evaluated, sometimes on a city-by-city basis, to ensure compliance with voter or legislatively enacted local ordinances and statutes.