Eric J. Felsberg. Ellen Rice. Jackson Lewis P.C. Long Island Office

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1 Eric J. Felsberg Jackson Lewis P.C. Long Island Office Ellen Rice Dell Inc. Bethesda, Maryland 2017 Jackson Lewis P.C.

2 ABOUT THE PRESENTER: ERIC J. FELSBERG Eric J. Felsberg is a Principal in the Long Island Office and the National Director of the Analytics Group at Jackson Lewis P.C. As the National Director of the Analytics Group, Mr. Felsberg leads a team of multi-disciplinary lawyers, statisticians, and analysts with decades of experience managing the interplay of data analytics and the law. Under Mr. Felsberg s leadership, the Analytics Group applies proprietary algorithms and state-of-the-art modeling techniques to help employers evaluate risk and drive legal strategy. In addition to other services, our group of lawyers and statisticians partners with employers to assess compliance with, and exposure under, wage-hour laws, conduct compensation equity studies, evaluate pre- and post-employment assessments, review reorganization plans and selection systems for evidence of impact, and leverage the use of analytics in defense of systemic discrimination claims. The group also provides analytics support to employers during labor relations negotiations, optimizes talent management and equity and policy practices through the use of machine learning techniques, and synthesizes data files into analyzable format. The Analytics Group designs its service delivery models to maximize the protections afforded by the attorney-client and other privileges. Mr. Felsberg also provides training and daily counsel to employers in various industries on day-to-day employment issues and the range of federal, state, and local affirmative action compliance obligations. Mr. Felsberg works closely with employers to prepare affirmative action plans for submission to the Office of Federal Contract Compliance Programs (OFCCP) during which he analyzes and investigates personnel selection and compensation systems. Mr. Felsberg has successfully represented employers during OFCCP compliance reviews, OFCCP individual complaint investigations, and in matters involving OFCCP claims of class-based discrimination. He regularly evaluates and counsels employers regarding compensation systems both proactively as well as in response to complaints and enforcement actions. He is an accomplished and recognized speaker on issues of workplace analytics and affirmative action compliance. Mr. Felsberg graduated from Hofstra University School of Law where he served as the Editor-in-Chief of the Hofstra Labor & Employment Law Journal. He is admitted to the Bar of the State of the New York as well as the U.S. District Courts in the Eastern and Southern Districts of New York. 2

3 ABOUT THE PRESENTER: ELLEN RICE Ellen Rice is Senior Legal Director, Employment Law, at Dell, which last year bought EMC where Ellen had worked for 12 years. Both before and after the merger, Ellen has provided legal advice for the integration of a combined workforce of over 100,000. Ellen counsels executives and human resources personnel on a broad range of employment law issues and risks. In addition, she develops and implements policies, prepares and conducts training, supports mergers and acquisitions, and handles employment litigation and internal investigations. Prior to joining EMC, she served as Assistant General Counsel in the General Counsel s Office of the United States Department of Justice s Executive Office for United States Attorneys, Associate General Counsel at a nationwide food distribution company, and as a labor and employment law associate at the law firm Paul, Hastings. Ellen is a co-chair of the Washington D.C. Metropolitan Association of Corporate Counsel s Labor and Employment Forum. She is a frequent presenter at continuing legal education seminars and other legal related programs. Ellen received a BA from Tulane University and a JD from Harvard Law School. She is a member of the bars in the District of Columbia, Maryland, and Massachusetts. 3

4 INTRODUCTORY STATEMENT The materials contained in this presentation were prepared by the law firm of Jackson Lewis P.C. for the participants reference in connection with education seminars presented by Jackson Lewis P.C. Attendees should consult with counsel before taking any actions and should not consider these materials or discussions about these materials to be legal or other advice. 4

5 WHY PAY EQUITY? #EqualPay 5

6 RECENT PAY DISCRIMINATION CLAIMS January 2016: University reached $1 million settlement with former Associate Director of Sports Medicine and two former strength and conditioning coaches who alleged that they received less compensation than employees holding similar positions and perform comparable tasks for the men s teams. July 2017: Tech company agrees to resolve DOL sex discrimination in pay allegations by tying the administrative settlement to private $19.5 million class action settlement negotiated last year. October 2017: Financial services company agrees to pay a $5 million settlement to more than 300 high-level female employees who were paid less than their male coworkers, according to DOL findings. October 2017: Pharmaceutical company agrees to pay proposed $4 million settlement to resolve claims that female sales reps are systematically paid less. PENDING: EEOC brought suit against University in 2016 alleging that female full-time law professors were paid lower salaries compared to their male colleagues who were doing equal work. PENDING: Federal District Court conditionally certifies collective action involving current and former female faculty physicians at University related to allegations of pay discrimination. 6

7 EXISTING FEDERAL LAWS Equal Pay Act (1963) Sex Title VII (1964) Race, color, religion, national origin, sex Executive Order (1965) Race, ethnicity, sex Equal pay for equal work in same workplace No employment discrimination No employment discrimination or for inquiring about, disclosing or discussing pay 7

8 EEOC AND OFCCP ENFORCEMENT TRENDS EEOC: Pay discrimination a top enforcement priority in its Strategic Enforcement Plan Aug 29, 2017: OMB informs EEOC it is initiating a review and immediate stay of the effectiveness of the pay data collection aspects of the revised EEO-1 form. Filing deadline remains March 31, Reasonable cause findings 11X higher for systemic pay discrimination claims OFCCP: Pay equity inquiries and interviews of compensation directors in every audit Directive 307 Item 19 8

9 STATE AND LOCAL LAW TRENDS A. B. C. D. Total Compensation Equal pay for substantially similar work Pay transparency No pre-offer inquiries into salary history 9

10 TOTAL COMPENSATION No employer shall discriminate in any way on the basis of gender in the payment of wages, including benefits or other compensation. (MA) Wages are defined as all compensation for employment and includes board, lodging, or other advantage provided to an employee for the convenience of the employer. (MD) Other types of compensation that retailers should consider: Hourly workers: shift differentials, pay for overtime work Salaried workers: discretionary bonuses, stock awards 10

11 EQUAL PAY FOR SUBSTANTIALLY SIMILAR WORK WHAT IS COMPARABLE WORK? New York: Equal work... requires equal skill, effort and responsibility... performed under similar working conditions California: Substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions. Massachusetts: work that is substantially similar... and is performed under similar working conditions. Maryland: work of comparable character or work on the same operation in the same business or of the same type Puerto Rico: comparable work with equal duties, requiring the same skills, effort, and responsibility, under similar working conditions. 11

12 EQUAL PAY FOR SUBSTANTIALLY SIMILAR WORK WHO ARE COMPARATORS? Female / Male Comparators It is unlawful to employ women in any occupation within the state for compensation less than that paid to men for equivalent service (AK) Opposite Sex Comparators An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for. (CA) Expanding Comparators to Include Gender Identity An employer may not discriminate between employees in any occupation by paying a wage to employees of one sex or gender identity at a rate less than the rate paid to employees of the opposite sex or gender identity. (MD) 12

13 EQUAL PAY FOR SUBSTANTIALLY SIMILAR WORK WHERE ARE COMPARATORS? No employee shall be paid a wage at a rate less than the rate at which an employee of the opposite sex in the same establishment is paid for equal work on a job the performance of which requires equal skill, effort and responsibility, and which is performed under similar working conditions. (NY) From: same establishment = literal meaning. (NY, MD) To: same establishment = workplaces located in the same geographical region, no larger than a county. (NY, MD) 13

14 PAY TRANSPARENCY Cannot fire or otherwise discriminate against employees or applicants for asking about, discussing, or disclosing pay No waivers No obligation to disclose wages Damages 14

15 PRE-OFFER INQUIRIES INTO SALARY HISTORY Passed Salary History Ban California Gov. Jerry Brown signed AB168 into law on Thursday, Oct. 12, 2017 Delaware Massachusetts Oregon Puerto Rico New York City Philadelphia San Francisco NYC Salary inquiry ban effective October 31, 2017 Proposed Salary History Ban Majority of states have proposed some form of salary history ban Some recent vetoes Illinois Vetoed by Gov. Rauner Aug. 25, 2017 New Jersey Vetoed by Gov. Christy Jul. 21,

16 HOW TO ANALYZE YOUR PAY Step 1: Step 2: Step 3: Step 4: Step 5: Step6: ANALYSIS Establish Privilege Decide Who to Include and Groupings for Analysis Gather Data Conduct Analysis Investigate Disparities If Necessary, Make Equity Adjustments 16

17 STEP 1: ESTABLISHING PRIVILEGE Who s Asking? EEOC, OFCCP, Litigation How to Protect the Data Analyses? Self Critical Analysis Privilege Work Product Doctrine Only in Anticipation of Litigation Anticipate the Challenge and Safeguard Attorney-Client Privilege for Proactive Data Analyses at the Outset: Attorney-Client Privilege Broad protection Can extend to communications by counsel s agents Easy to waive Establish a Project Team of need to know people Advise Team in writing of confidentiality measures Identify need for legal advice Do not disseminate information reports outside Team Mark documents and s Privileged & Confidential Advise interviewees of confidential nature 17

18 THE SLIDING SCALE OF PRIVILEGE 18

19 STEP 2: DECIDING WHO TO INCLUDE AND GROUPINGS FOR ANALYSIS Varying definitions of employees to include in pay analysis Item 19, OFCCP Scheduling Letter Itemized Listing 19

20 STEP 2: DECIDING WHO TO INCLUDE AND GROUPINGS FOR ANALYSIS Job Title Job Family Pay Band Exempt/ Non-Exempt Associate Professor (10) Assistant Professor (9) Non-Tenured Faculty (19) Band 8 (30) Librarian (6) Library Clerk (5) Library (11) Exempt (141) Admissions Officer (45) Admissions Clerk (35) HR Manager (21) Benefits Rep (10) Admissions (80) HR (31) Band 9 (111) 20

21 What Similarly Situated Looks Like Exempt Workforce Non- Exempt Workforce Job Title # Female # Male Avg Female Pay Avg Male Pay Statistically Significant Difference Tenured Professor 4 4 $121,000 $148,000 Not Significant Associate Professor $53,000 $66,700 Not Significant Assistant Professor 9 7 $23,000 $31,700 Not Significant Job Title # Female # Male Avg Female Pay Avg Male Pay Statistically Significant Difference Cook $18,000 $22,000 Not Significant Groundskeeper $16,000 $18,700 Not Significant Custodian 5 26 $20,000 $26,500 Not Significant What Pay Analysis Groups Looks Like Exempt Workforce Job Title Tenured Professor/ Associate Professor/ Assistant Professor # Female # Male Avg Female Pay Avg Male Pay Statistically Significant Difference $50,500 $70,500 Significant Non- Exempt Workforce Job Title # Female # Male Avg Female Pay Avg Male Pay Statistically Significant Difference Cook/ Groundskeeper/ Custodian $17,000 $24,000 Significant 21

22 STEP 3: GATHER DATA Include Factors Influencing Pay in Analyses Date of Hire Date in Position Time in Grade Performance Prior Experience Education EEO-1 Categories Department Business Unit What if Data is not Readily Available? If the factors that influence pay aren t readily available in HRIS system, do a first cut analysis with what you have readily available Tenure, Time in Position, Time in Grade, Performance Then, dig in where there are statistical red flags This should make the task of manually compiling other factors more manageable * It is key to capture different components of salary * 22

23 STEP 4: CONDUCTING ANALYSES Large Groups Regression Analyses Small Groups Fisher s Exact Test & t-test Very Small Groups Cohort Analysis Who s in my Cohort? Do the factors justify the difference in pay? Name Gender Job Title Salary Tenure in Yrs. Prior Exp. In Yrs. Avg. Perf. Rating Last 3 Yrs Bob M Librarian $90, Larry M Librarian $85, Michelle F Librarian $80,

24 STEP 5: INVESTIGATING PAY DISPARITIES The Funnel Approach: Identify groups with pay disparities Explain those you can with readily available factors Explain remaining with factors you gather manually and code What s left? A few (or no) pay disparities STEP 6: MAKING NECESSARY EQUITY ADJUSTMENTS Where you have exhausted the ability to explain pay differences, consider pay adjustments. Make adjustments as part of regular pay cycle Conduct pay analysis in months prior to pay cycle Make adjustments incrementally over several cycles Avoid lump sum payments Best Practice: Adjust over three pay cycles Each year, consider keeping an equity reserve 24

25 ABOUT OUR PAY EQUITY GROUP For 20 years, we have worked with employers to address pay equity issues. Our Group is comprised of approximately 30 attorneys partnering with a team of 15 Ph.D. and Master s level statisticians and economists. Our comprehensive pay equity expertise includes: Defending employers in agency investigations and in litigation under Title VII, the Equal Pay Act and state fair pay laws; Conducting privileged, proactive pay analyses; Helping employers identify and address unexplained pay disparities; and Providing advice and counsel regarding how to design, implement, and improve pay systems to ensure equity and minimize liability. 25

26 THANK YOU With 800 attorneys practicing in major locations throughout the U.S. and Puerto Rico, Jackson Lewis provides the resources to address every aspect of the employer/employee relationship. 26

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