Category Archives: Employment Law

EEOC Proposes to Add Pay Data to EEO-1 Reporting Form

As part of itsgavel over money istock role enforcing antidiscrimination laws, the Equal Employment Opportunity Commission (EEOC) gathers information about workplace demographics in the United States. Employers with 100 or more employees are required to submit an annual report, called the EEO-1 report, providing information about the race, ethnicity, and gender of the company’s employees in certain job categories. At the end of last month, the EEOC announced a proposal to add pay data to the EEO-1 report, in an effort to enforce equal pay laws.

Although wage discrimination based on gender, ethnicity, and race has been outlawed for several decades, the United States still has a significant pay gap. Women continue to make around three-fourths or less of what men make in the same position. The pay gap is even wider for female employees of African American or Latino descent.

Enforcing equal pay has presented somewhat of a challenge because it’s easy for this type of discrimination to go unnoticed. Employees typically aren’t privy to what their coworkers are earning, and up until now, employers haven’t been required to report that data to any state agencies. The EEOC expects that requiring regular reporting of pay data will help regulate employers and enforce antidiscrimination laws. And, it will provide employers with an opportunity to monitor their pay practices and correct any discrepancies.

If the EEOC’s proposed change is approved, employers that are required to submit an EEO-1 report will need to include information on employees’ wages and work hours. The EEOC will be accepting comments on the proposed rule until April 1, 2016. If the rule passes, employers will need to comply with the new reporting requirement beginning in 2017.

Minimum Wage Increases in the New Year

Witgavel over money istockh the start of the new year, the minimum wage has increased in several states. The federal minimum wage remains at $7.25; this is the lowest hourly amount that employers can pay employees in the United States. However, if a state has a higher minimum wage, the employer must pay the higher amount. Likewise, if a city or county has a higher minimum wage than the federal or state rate, the employer must pay the higher amount.

As of January 1, 2016, the minimum wage increased to the following amounts:

  • Alaska: $9.75
  • Arkansas: $8
  • California: $10
  • Colorado: $8.31
  • Connecticut: $9.60
  • Hawaii: $8.50
  • Massachusetts: $10
  • Michigan: $8.50
  • Nebraska: $9
  • New York: $9
  • Rhode Island: $9.60
  • South Dakota: $8.55
  • Vermont: $9.60
  • West Virginia: $8.75

Employers and employees should check with their city or county to find out if there is a local minimum wage. For more information about the rules in your state, see Your Right to Minimum Wage.

California Passes New Equal Pay Law

The gengavel over money istockder gap is alive and well in California. According to a 2014 study by the National Women’s Law Center, a woman working full time in California still earns only 84 cents for every dollar that a man makes. For women of color, the gap is even more significant. For example, a Latina woman earns only 44 cents for every dollar that a white man makes.

On October 6, 2015, Governor Jerry Brown signed the California Fair Pay Act into law. The new law, which goes into effect on January 1, 2016, expands on California’s Equal Pay Act of 1949 and makes it easier for women to challenge discriminatory pay practices.

California employers have long been required pay to men and women equally. However, in the past, this rule applied only when the man and woman performed “equal work” in the same location. The new law relaxes this requirement, requiring equal pay for “substantially similar” work, even if the employees work in different offices or locations. The new law also encourages an open discourse about wages: Employers are not allowed to prohibit employees from discussing their wages or retaliate against them for doing so.

Another significant change is that the law shifts the burden of proof to the employer. Once an employee challenges an unequal pay practice, the employer must prove that the difference in pay is due to a legitimate factor other than gender—such as seniority, qualifications, or the quantity or quality of work. If the employer isn’t able to meet its burden, the employee can recover the difference in wages plus interest, an equal amount in liquidated damages, and attorneys’ fees and cost.

Department of Labor Proposes New Overtime Rules

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Earlier this month, the Department of Labor announced its plans to establish a new rule that would allow millions of additional workers to earn overtime. Following an executive order by President Obama, who has advocated for increasing the wages of middle-class workers, the Department of Labor has proposed a rule that would increase the minimum salary necessary for a worker to qualify as exempt from the overtime rules.

Under the federal Fair Labor Standards Act, all employees must receive overtime when they work more than 40 hours in a week, unless they are exempt from the overtime rules. The most common exemptions are the so-called “white-collar” exemptions for certain professional, managerial, and administrative workers. To qualify as exempt under these categories, a worker must make a minimum weekly salary. Currently, the minimum is $455 per week, which is the equivalent of $23,660 per year.

The new rules would increase the minimum weekly salary to $970 per week, which is roughly $50,440 per year. This would make a large number of lower-paid managers, professionals, and administrative employees eligible for overtime pay. For example, a retail store manager who makes $30,000 and works 50 hours a week will now receive overtime pay for those ten extra hours.

Until now, increases to the minimum salary have been infrequent, the last time being in 2004. The new rules would automatically adjust the minimum salary for inflation in the future. This would prevent the exemption requirements from becoming outdated and ensure that receiving overtime is the rule, rather than the exception, for most workers.

The Department of Labor will be accepting comments on the proposed regulations until September 4, 2015. Absent any challenges from Congress, the new rules could go into effect as early as next year.

For more information on the professional, administrative, and executive exemptions, including additional requirements that must be met, see Understanding the “White-Collar” Exemptions.

Employer May Not Refuse to Hire Applicant Based on Suspicion of Need For Religious Accommodation

Epic2arly last week, the U.S. Supreme Court handed down its decision in EEOC v. Abercrombie & Fitch Stores, Inc. In that case, a young Muslim woman who wore a hijab (a religious headscarf) to her interview was denied employment because the headscarf violated Abercrombie’s “look policy,” which did not allow head wear of any kind. Without discussing the policy with the applicant, Abercrombie simply denied her employment.  (For more about the facts of this case, see our previous post, How Explicit Must a Request for Religious Accommodation Be?)

The Supreme Court ultimately held that Abercrombie engaged in religious discrimination by refusing to hire the applicant, Samantha Elauf. In doing so, the court rejected Abercrombie’s argument that it didn’t actually know that Elauf wore the headscarf for religious reasons. The Court held that actual knowledge is not a requirement for religious discrimination under Title VII. It was enough that Abercrombie suspected that Elauf would need an accommodation and that this was the motivation behind its refusal to hire her.

The Court’s holding suggests that Abercrombie should have notified Elauf about the “look policy” during the application process and explored possible accommodations with her. The result makes practical sense. How would Elauf have known that she needed an accommodation if she wasn’t aware of the company’s “look policy”?

The takeaway from this decision is that employers need to consider offering religious accommodation to employees, even if the employees don’t specifically request it. When an employer has reason to suspect that an employee may need an accommodation, it should broach the topic with the employee. However, employers acting on such suspicions must be careful not to engage in stereotyping that could lead to discrimination claims.

The best approach is to stick to objective facts and company policy. For example, it could lead to trouble to ask an applicant, “Do you wear a headscarf because you are Muslim?” Instead, simply inform the applicant of the company’s established policy that head wear of any kind is not allowed, and then ask if that would present any issues for the applicant. This puts the ball in the employee’s court and gives her the opportunity to request a religious accommodation if she needs one. (For more information on religious accommodation, see our Religious Discrimination page.)