Eye On Pay Equity: Keeping Up With Recent Developments. Presented By: Gregg M. Lemley R. Lance Witcher

Transcription

1 Eye On Pay Equity: Keeping Up With Recent Developments Presented By: Gregg M. Lemley R. Lance Witcher

2 What s the Big Deal?

3 Public Relations White House Equal Pay Pledge June 13, companies commitment to conduct annual, companywide pay equity analyses Companies considering publishing all salaries/pay scales Investor requests for reports on pay equity

4 It s Not Just Private Industry

5 Current Federal Laws Title VII of the Civil Rights Act Unlawful to discriminate against employees in connection with compensation based on protected characteristics including gender Female employee paid less than a similarly situated male employee without a legitimate explanation for the pay difference Ledbetter Fair Pay Act Statute of limitations runs from each discriminatory paycheck

6 Current Federal Laws Equal Pay Act equal wages to men and women who perform jobs that require substantially equal skill, effort and responsibility and are performed within the same establishment under similar working conditions Pay differentials permitted based on a bona fide seniority system, merit system, incentive system (quality or quantity of production) or any other factor other than sex

7 Proposed EEO-1 Report (2018)

8 EEOC Proposed Revision to EEO-1 Report How will reports be used? Confidentiality and disclosure issues Data collection and reporting issues Proposed form posted on What s next? Comments were due by August 15, 2016 EEOC public hearing First report due March 2018 if finalized

9 EO Promoting Pay Transparency OFCCP Final Rule in effect January 11, 2016 Prohibits discrimination against those who inquire about, discuss, or disclose their own compensation or the compensation of other employees or applicants Two defenses: Essential Functions Workplace Rule

10 OFCCP Regulations Final regulations cover a variety of issues related to gender discrimination, including compensation Apply to federal government contractors covered by EO Prohibit contractors from paying different compensation to similarly situated employees on the basis of sex

11 OFCCP Regulations (continued) Factors relevant to determine whether employees are similar include tasks performed, skills, effort, levels of responsibility, working conditions, job difficulty, minimum qualifications, and other objective factors. The OFCCP may deem employees to be similarly situated where they are comparable on some of these factors, even if they are not similar on others. Effective August 15, 2016

12 States Are Getting into the Game Several states have enacted new pay equity legislation California New York Massachusetts Maryland Other states considering pay equity legislation

13 State Developments Key Points Potential for differing standards for determining pay equity Protected classes gender identity What is substantially similar work Continued applicability of same establishment Burdens of proof on defenses for justification for pay differential Employees may discuss pay Asking about prior pay

14 Increased Risks for Employers EEOC/OFCCP Investigations Cause findings Litigation Private litigation Individual claims of pay discrimination harder to defend Potential class actions Internal complaints increased awareness due to equal pay discussions in media and social media

15 Prevention and Protection Take action now before the government/litigants 1. Clean-up data HRIS system 2. Audit data to identify pay disparities and weaknesses 3. Review and analyze policies, procedures, and processes

16 Purposes of a Pay Audit Identify potential pay disparities within appropriate job classifications Determine whether there are legitimate explanations for disparities Take steps to correct the disparities

17 Pay Audit Considerations Conduct audit under privilege Before starting, understand pay decisions within the company What types of pay decisions are there starting pay, merit increases, adjustments, other compensation Who makes the decisions What factors are relied on to make pay decisions

18 Pay Audit Considerations Have the data analyzed by an expert Statistically significant differences Outliers Determine if factors explain disparities Correct disparities that cannot be explained with legitimate reasons Timing of corrections Communication regarding corrections

19 Policy and Procedure Review Review written policies, procedures, practices Decision-makers scope of authority Factors are considered related to job; objective; quantifiable How are decisions documented Identify weaknesses in the systems that may lead to disparities Modifications to improve policies and procedures

20 Factors Contributing to Risk Lack of meaningful standards or guidelines Noncompliance with standards/guidelines Unfettered discretion and subjective decision-making No training for decision-makers Failure to articulate/document the reasons for decisions Failure to communicate criteria Flawed job descriptions

21 Practical Tips Written policies for pay increases and bonuses Guidelines based on objective, quantifiable factors Limit subjectivity with objective factors Document pay decisions Assess job descriptions Assess performance evaluation process Train decision-makers Periodic pay analyses

22 Any Questions? Gregg M. Lemley (314) R. Lance Witcher (314)