ACC-Charlotte April Meeting New Pay Equity Laws

Transcription

1 ACC-Charlotte April Meeting New Pay Equity Laws Presented by Liz S. Washko. 2018, Ogletree, Deakins, Nash, Smoak & Stewart, P.C. ogletree.com

2 Agenda Overview of applicable laws Recent legal developments Best practices to protect your company

3 Pay Equity In The News: Hollywood and sports figures High profile lawsuits against: Tech companies Healthcare Higher education Banking and Finance Manufacturing

4 Public Relations Companies publishing salaries pay scales and audit results Investor requests for reports on pay equity (Former) White House Equal Pay Pledge Over 100 companies signed by December 2016

5 Federal and State Laws

6 Equal Pay Act Equal wages to men and women who perform jobs that: Require 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 Title VII of the Civil Rights Act Unlawful to discriminate against employees in connection with compensation based on protected characteristics including gender and race Female employee paid less than a similarly situated male employee without a legitimate explanation for the pay difference Applies to race, national origin, etc.

8 Increased State/Local Activity States have enacted new legislation California Delaware Maryland Massachusetts New York Oregon Washington Cities/counties Albany County, NY New York City Philadelphia San Francisco Other states/cities considering pay equity legislation

9 State Developments Key Points State laws create potential for differing standards for determining pay equity Protected classes race/ethnicity; gender identity Equal work v. substantially similar work Continued applicability of same establishment Justifications for pay differences Salary history bans Confidentiality issues

10 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 Contractors must post a pay transparency policy notice

11 Increased Risks for Employers EEOC/Agency Charges Increased charge activity Expansive investigations Increased litigation activity EEOC as plaintiff Increased private litigation Individual claims of pay discrimination Potential class actions Internal complaints Increased awareness - media and social media

12 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 or document the reasons for decisions Failure to communicate criteria

13 Best Practices for Prevention and Protection

14 Take Action Clean-up data HRIS system Audit data to identify pay disparities and weaknesses and make corrections Review and analyze policies, procedures, and processes

15 HRIS Data Basis for any analysis: Needed for internal analyses/audits Requested by EEOC/plaintiffs/experts Garbage in/garbage out

16 HRIS Data Common Issues Inaccurate/inconsistent data Job titles Missing gender/race of some employees Inaccurate information Missing useful data Education/experience Time in job Performance ratings

17 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

18 Pay Audit Considerations Conduct audit under privilege Identify appropriate comparator groups Understand pay decisions What types of pay decisions are there starting pay, merit increases, adjustments, other compensation What factors are relied on to make pay decisions

19 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

20 Policy and Procedure Review Review written policies, procedures, practices Decision-makers scope of authority Factors 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

21 Practical Tips Written policies for pay increases and bonuses Limit subjectivity with objective factors Assess performance evaluation process Document pay decisions Enforce policies/guidelines Train decision-makers Conduct periodic pay analyses Assess job descriptions

22 QUESTIONS?