The NJ legislature has been busy in recent weeks with new employment laws.  Yesterday, Governor Murphy signed the Diane B. Allen Equal Pay Act, which will go into effect on July 1, 2018.

The law is probably one of the broadest equal pay laws in the country. Unlike most equal pay laws that prohibit pay disparity based on gender, the law prohibits employers from discriminating against employees in compensation based on membership in any protected class.  This means employers might see claims raised based on race, national origin, sexual orientation, etc.

More details about the new law can be found in our alert here.

Maryland’s Disclosing Sexual Harassment in the Workplace Act of 2018, which awaits Gov. Larry Hogan’s signature, imposes stricter waiver and disclosure requirements regarding sexual harassment on Maryland employers beginning on October 1, 2018.  The bill was passed by both houses of the Maryland General Assembly and a Governor’s veto is not anticipated.

The bill impacts Maryland employers in two ways.  First, the bill prevents employers from asking employees to waive their future rights to come forward with sexual harassment complaints and provides that such waivers are void as a matter of public policy.  Second, the bill requires employers with 50 employees or more to disclose: 1) how many settlements the employer has made after a sexual harassment allegation; 2) how many times an employer has settled allegations of sexual harassment made against the same employee; and 3) the number of settlements of sexual harassment complaints that included non-disclosure provisions.  The Maryland Commission on Civil Rights will collect and compile the data and make it publicly available, including the employers’ identities (although not the identities of the alleged harassers or victims).

Maryland employers should  pay close attention to whether any of their contracts, policies, or agreements require employees to waive a future right to assert a sexual harassment claim or complaint.  Any waiver requirements should be eliminated by October 1, 2018, in accordance with the new law.  Additionally, employers subject to the reporting requirement should develop a reliable method of accurately tracking the data required to be disclosed.  This is a good opportunity for employers operating in Maryland to perform a comprehensive review of their sexual harassment policies, make any necessary revisions, and provide training to their managers in an effort to educate their employees as well as reduce the risk of sexual harassment claims being asserted in the future.

 

This week, the 9th Circuit issued a decision that many say represents a sea change in how employers may defend against Equal Pay Claims. The decision in Rizo v. Yovino issued on April 9, 2018 overturned decades of interpretation of the Equal Pay Act and held that prior salary history may not be considered by employers.  However, there is some language in the ruling that appears to muddy the general rule announced by the Court.

Under the Equal Pay Act, it is illegal for employers to pay men and women different salaries for substantially similar work.  However, an employer may defeat an Equal Pay Act claim by proving that there were legitimate, non-discriminatory reasons for the salary differential.  Traditionally, courts have found that one of those legitimate, non-discriminatory reasons might be that the employer based the salary on the compensation the employee received at a prior job.

Indeed, many employers routinely ask what salaries applicants are currently making.  In that way, employers understand applicants’ salary expectations but also have an awareness of where to set the salary being offered to the applicant.

In recent times, some jurisdictions have passed laws prohibiting employers from asking about prior salary history.  The stated reason for these laws is that it perpetuates prior gender pay discrimination.  Basically, if an employee was subjected to a discriminatory wage rate at a prior employer, using that salary at the new employer would set the employee’s salary lower than other employees and, even if the new employer is not overtly acting in a discriminatory manner, would continue the past discriminatory practice.

Right now, the number of jurisdictions with such laws is limited.  However, the Rizo decision may change that.

Rizo, a school teacher, was hired by Fresno County as a math consultant.  Fresno County had a standard operating procedure that set ten salary steps.  When a teacher was hired, salary was set based on taking the teacher’s former salary and adding 5%.  Once the salary was calculated, the teacher was placed in the appropriate step of the pay scale.  After her hire, Rizo discovered that male math consultants had been hired at higher salary steps.  For its part, Fresno County claimed that the use of prior salary was a long-recognized legitimate factor and that if salaries were reviewed as a whole, more women were placed at higher salary steps than men.

The Ninth Circuit heard the case en banc in order to clarify the law as to whether prior salary history alone or in combination with other factors could be a legitimate factor “other than sex” that justified the salary differential.

The Ninth Circuit held that prior salary alone cannot be a legitimate factor other than sex. It then went even further, which caught most people off guard, and said that prior salary is never a legitimate business factor even if taken into consideration with other factors. The Court did say that there might be individualized cases where salary was negotiated and past salary came into play  and that it took no position on whether prior salary could be considered in those cases.

This ruling is contradictory and employers should not consider this language a safe harbor.  Given the other language in the opinion that repeatedly states that asking about prior salary frustrates the entire purposes of the Equal Pay Act and should never be considered, employers should not bank on the fact that there might be some conceivable fact pattern that allows employers to consider prior salary history.  This is true, despite the very valid points brought out in the concurring opinions, that there are times that prior salary history has nothing to do with gender.  For example, prior salary may have been set based on cost of living or demand for particular jobs.

Based on this ruling, the safest course of action would be for employers within the Ninth Circuit to never ask about prior salary history.  However, what happens if the applicant volunteers it while trying to negotiate terms and conditions of the new job?  This decision doesn’t really answer that question.

At this point, there are other circuits that allow for the consideration of prior salary history in combination with other factors.  It will be interesting to see if the Supreme Court decides to take up the split.

 

Monday, New York’s budget bill for FY 2019 was presented to the Governor for signature.  Buried among the usual budget line items are several provisions that will drastically affect employers.

In what seems to be a direct response to the #metoo movement, the bill sets training requirements, prohibits mandatory arbitration of discrimination claims, and outlaws confidentiality provisions in settlement agreements unless specifically requested by the complainant.

The employment related provisions are set forth in S7507-C.  Here are the highlights (or low lights depending on your point of view):

  • Mandatory Harassment Policies:  All employers must have a policy against harassment that complies with or exceeds the model harassment policy that will be developed by the Division on Human Rights.  At a minimum, the policy must:
    • prohibit sexual harassment consistent with guidance issued by the department in consultation with the division of human rights and provide examples of prohibited conduct that would constitute unlawful sexual harassment;
    • include information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment and a statement that there may be applicable local laws;
    • include a standard complaint form;
    • include a procedure for the timely and confidential investigation of complaints and ensure due process for all parties;
    • inform employees of their rights of redress and all available forums for adjudicating sexual harassment complaints administratively and judicially;
    • clearly state that sexual harassment is considered a form of employee misconduct and that sanctions will be enforced against individuals engaging in sexual harassment and against supervisory and managerial personnel who knowingly allow such behavior to continue; and
    • clearly state that retaliation against individuals who complain of sexual harassment or who testify or assist in any proceeding under the law is unlawful.
  •  Mandatory Training:  All employers must also provide “interactive” training to their employees.  The Division will also be developing a model training program that must include:
    • an explanation of sexual harassment consistent with guidance issued by the department in consultation with the division of human rights;
    • examples of conduct that would constitute unlawful sexual harassment;
    • information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment;
    • information concerning employees’ rights of redress and all available forums for adjudicating complaints; and
    • address conduct by supervisors and any additional responsibilities for such supervisors.
  • Statements by Public Contractors:  Public contractors submitting a bid for work with the State must include a statement that they have a policy against sexual harassment and that they provide training to employees on that policy.  Public Contractors must generally comply with the policy and mandatory employment training that applies to all employers under new Labor Law §201-g which sets for the policy and training requirements.
  • Prohibition on Mandatory Arbitration Agreements:  No employer may require that a claim of unlawful discrimination or sexual harassment be submitted to mandatory arbitration.  Voluntary arbitration provisions are still okay.  Collective bargaining agreements trump this provision, so if the CBA requires arbitration of discrimination or sexual harassment, then that would not run afoul of the law.  The law only bans this on a prospective basis and the law will not apply to any agreements entered into prior to the effective date of the law.
  • Bar on Most Confidentiality Agreements:  Settlement agreements may not contain confidentiality provisions requiring the complainant to keep the facts of the harassment or discrimination confidential unless the complainant voluntarily agrees to it.  Employers may still put a draft provision in agreements requiring confidentiality for the complainant to review.  The complainant must be given 21 days to review the provision. If the complainant accepts the provision, there must be a separate writing stating that.  Complainants must also have 7 days to revoke their acceptance of the agreement.
  • Provides Protection (and a Cause of Action) for Non-Employees:  the bill makes clear that an employer may be held liable if one of its employees sexually harasses a contractor, subcontractor, vendor, consultant or other non-employee providing services to the employer.

These provisions will go into effect 180 days after the law is enacted.  We assume that the forthcoming regulations may clarify certain aspects of the law such as how frequently harassment training must occur.  We will keep you updated when the regulations are issued.

In the meantime, employers should begin assessing their harassment policies and training programs.  Employers should also review settlement agreements and employment agreements for compliance with the law.

Recently I watched a male attorney speak to opposing counsel (a female) in a condescending, chastising manner that I cannot imagine he would have used if he had been speaking to a male attorney.  Her male colleague, who was standing right next to her, said nothing.  I said nothing.  And the female opposing counsel said nothing in her own defense.

During an emergency custody hearing a female friend of mine who practices family law pushed back on the terms proposed by opposing counsel, an older male.  Opposing counsel shook his head and muttered “every time with female attorneys.”  When my friend asked “what did you say?” he responded, “nothing, just talking to myself.”

We all know that discrimination based on gender is prohibited in the workplace.  We can’t refuse to hire or promote a woman simply because she is a woman.  We can’t prefer a male over a female solely on that basis.  We can’t do that because the law won’t allow it.

But what about the much more subtle, and yet maybe more pervasive, forms of discrimination that women experience every day, such as the examples above?  What about being expected to laugh demurely when a male judge referred to me as “kiddo” in front of a jury?  What about criticizing women based on appearance instead of their qualifications or capabilities (“she’s such a fat slob” instead of “she’s incompetent”)? What about the female told to “stop overreacting” or to “calm down” when she advocates fiercely on behalf of a client (or herself)?  And what about all of us who silently tolerate these types of behavior?

In many (although certainly not all) professional environments, blatant gender discrimination is the exception, rather than the rule.  However, more subtle forms of gender discrimination are ignored, shrugged off, and even accepted or condoned every day in the workplace.  Until we stop tolerating this behavior, gender discrimination will continue to permeate and poison work environments.  Not only does this perpetuate gender imbalance in the workplace, it also hurts morale, results in decreased productivity, increases turnover, and promotes inefficient hiring and promotion practices.  Accordingly, employers should pay close attention to the day-to-day practices in the workplace and enforce anti-discrimination policies to help ensure that productivity and profitability are not being negatively affected by gender discrimination.

Volvo Group North America, LLC will pay $70,000 and institute a three-year consent decree to resolve a federal disability discrimination suit brought by the U.S. Equal Opportunity Employment Commission (EEOC).

According to the suit, Volvo made a conditional job offer to a qualified applicant for a laborer position at its Hagerstown, Maryland facility.  The applicant, a recovering drug addict enrolled in a supervised medication-assisted treatment program, disclosed during his post-offer physical that he was taking medically prescribed suboxone.  When he arrived for his first day of work, a human resources representative told the applicant that Volvo could not hire him because of his suboxone use, the EEOC said.

The EEOC filed suit (EEOC v. Volvo Group North America, LLC, Civil Action No. 1:17-cv-02889) alleging that Volvo violated Americans with Disabilities Act by failing to conduct an individualized assessment to determine what effect, if any, the suboxone had on the applicant’s ability to perform the job.

In addition to the $70,000 in monetary relief to the applicant, the consent decree prohibits Volvo from violating the ADA in the future. Additionally, Volvo will distribute to all employees at its Hagerstown facility an ADA policy explaining the right to a reasonable accommodation and will amend its policy on post-offer medical and drug evaluations to explain how it will assess whether an employee’s or applicant’s lawful use of prescription medication poses a threat under the ADA.  Volvo will also provide ADA training, report to the EEOC about its handling of future complaints of disability discrimination, and post a notice regarding the settlement.

 

This case is a good reminder to employers that the ADA protects recovering addicts who are not currently using illegal drugs and prohibits discrimination on the basis of past drug addiction. Of course, employers are allowed to hold such individuals to the performance standards applicable to their jobs, may prohibit the use of illegal drugs in the workplace, and may require that employees not be under the influence of illegal drugs in the workplace.  However, recovering addicts prescribed medication as part of a treatment program are likely entitled to full ADA protection, including the right to a reasonable accommodation that does not cause undue hardship to the employer.  This means that employers cannot simply dismiss individuals in such a treatment program as unfit for employment.  Instead, employers should routinely review their policies regarding the use of prescribed medications to ensure compliance with the ADA.

 

In one of his final acts in office, New Jersey Governor Chris Christie signed legislation to prohibit discrimination against breastfeeding employees.  The bill, which was introduced by Democratic legislators and passed both houses of the Legislature unanimously, amends the New Jersey Law Against Discrimination and takes immediate effect.  New Jersey employers should expect this law to affect their workplace in at least two ways.

First, the law amends the NJLAD’s enumeration of protected classes, adding the words “or breastfeeding” after “pregnancy” as a protected basis in employment.  In other words, an employee’s status as a breastfeeding employee joins the ranks of protected characteristics that employers may not consider in taking adverse actions against employees and applicants.  Moreover, the law provides for a broad definition, defining “breastfeeding” as including “breast feeding or expressing milk for breastfeeding . . . or medical conditions related to . . . breastfeeding.”

Second, the law requires employers to provide employees who are breastfeeding an infant child with a reasonable accommodation, which “shall include reasonable break time each day to the employee and a suitable room or other location with privacy, other than a toilet stall, in close proximity to the work area for the employee to express breast milk.”  The employer is not required to provide this specific accommodation if the employer can demonstrate that this accommodation would cause an undue hardship, and the hardship analysis requires consideration of the following factors:

[T]he overall size of the employer’s business with respect to the number of employees, number and type of facilities, and size of budget; the type of the employer’s operations, including the composition and structure of the employer’s workforce; the nature and cost of the accommodation needed, taking into consideration the availability of tax credits, tax deductions, and outside funding; and the extent to which the accommodation would involve waiver of an essential requirement of a job as opposed to a tangential or non-business 
necessity requirement.

Note, though, that it is the employer’s obligation to establish that an undue hardship exists.  And, the employer must establish an undue burden, in light of these specific factors.  It is not enough to just conclude accommodations would be burdensome without examining these specific factors.

In light of the change in the law, employers should consider whether their workplace policies, HR/accommodation request processes, and facilities are up-to-date with the newly enacted law.

Several recent New York City human rights law amendments in the past year have steadily increased worker protections applicable to New York City employers. As is no surprise, the mayor’s office recently adopted yet another new amendment passed by the New York City Council amending the New York City Human Rights Law (NYCHRL) effective October 15, 2018.

What is particularly noteworthy here are the administrative obligations placed on New York City employers under this new law. Once effective, New York City employers are required to engage in a “cooperative dialogue” when an employee requests a reasonable accommodation (whether for disability-related, religious, or other covered reasons) and to document that process. Employers with operations in New York City should be aware of these new changes and grow accustomed to their administrative burdens prior to the enactment’s effective date.

Under the NYCHRL, as most New York City employers are already aware, reasonable accommodations (such as workplace rule changes and unpaid leave) must generally be provided to employees for any covered reasons. The recent amendment expands upon this existing requirement, and requires employers to engage in a “cooperative dialogue” with an employee who requests a reasonable accommodation: (1) for religious needs; (2) due to a disability; (3) as a result of pregnancy, childbirth or a related medical condition; or (4) as a result of domestic violence, sex offenses or stalking. This is similar to already existing “interactive process” requirements commonly applied to disability accommodations.

However, the new amendment now explicitly requires such dialogues by law for all covered reasons found within the NYCHRL. Employers are specifically required to engage in a good faith written or oral conversation with the employee regarding the employee’s accommodation needs, potential accommodations (including alternatives to the accommodation proposed by the employee), and any difficulties that the proposed accommodations could pose for the employer. At the conclusion of this cooperative dialogue, the employer must provide the employee with a written final determination identifying any accommodation that was granted or denied.

That last part, involving required written determinations, is likely to be the most difficult issue for employers (from an administrative standpoint). While documenting accommodation requests is already a best practice, this amendment makes such documentation mandatory. Now, failure to provide a written determination will potentially constitute grounds for an unlawful discrimination finding. Moreover, it is unclear if this written determination requirement would apply to all accommodations, including the littlest and most mundane of accommodations granted in the workplace. For example, would a written determination be required for a request to attend a doctor’s appointment, to leave early for a migraine, or to take a religious holiday? Most likely the answer is “yes” as of now, and any failure to provide a determination could result in liability under the law.

If prior to the effective date additional guidance is issued by the New York City Commission on Human Rights that helps clarify or to mitigate the law, we will prepare a follow-up to this piece. Otherwise, employers should update their employee handbooks and leave policies accordingly, and begin training managers and human resources professionals to comply with these newest legal requirements in New York City.

Our office was closed last Monday in celebration of Martin Luther King, Jr. Day.  I was at the dog park talking to a woman I know who also happens to be a lawyer.  During our discussion of how nice it was to be off of work, she mentioned that not everyone at her firm felt that way.

She then told me that there is one partner in her office who every year insists on coming into work on Martin Luther King, Jr. Day.  Not only does he insist on coming in, he insists on announcing to everyone in the office that the reason he is coming in was because Martin Luther King, Jr. Day was a “made up holiday” and he did not believe in the concept of the holiday.  Notably, this partner apparently has no such qualms about taking off other holidays, such as President’s Day.

As this attorney told me the story, she was annoyed but not visibly upset.  I should mention that the attorney I was speaking to is diverse.  Although she is not African American, I can imagine how she felt that this partner was going out of his way to basically say that he does not support the concept of equality and diversity.

I then thought about the fact that this partner, who is apparently very senior at her firm, is allowed to make such statements unchecked.  Although he did not use a racial slur or directly say that he was opposed to minorities, that certainly is one interpretation of his comments.

I can also imagine how other partners who heard his comments simply shook their heads and walked away, likely thinking to themselves that it was inappropriate but not bad enough that they should say something.  However, little comments like that fester just as much as other more egregious behavior.

If employers are truly serious about reducing harassment and discrimination in the workplace and reducing possible legal exposure, they must establish an inclusive culture.  No workplace is perfect and there might always be a bad apple, but one bad apple is likely to turn into a bushel if these “little” comments are not also addressed.

On January 12, the Maryland General Assembly overrode Governor Larry Hogan’s veto and passed the Healthy Working Families Act. The Act will go into effect on February 11, 2018, unless the General Assembly passes legislation delaying its implementation.  Yesterday, one of the principal sponsors of the law did introduce legislation that would delay enforcement of the law until April 2018.  We will keep you posted on whether the implementation of the Act is delayed.

In the meantime, the Act requires Maryland businesses with at least 15 employees to offer paid sick and safe leave as well as requiring smaller businesses to provide unpaid sick and safe leave.

More specifically, the Act requires employers with at least 15 employees, regardless of whether those employees are seasonal, temporary, part-time, or full-time, to offer eligible employees the ability to earn up to 40 hours of paid leave a year.  The 40 hours can be awarded at the beginning of each year or accrued at a rate of one hour for every 30 hours worked.  Moreover, employees can carry over up to 40 hours of paid leave a year.  Employers can cap use of paid leave at 64 hours per year and are not required to pay out unused, accrued sick leave when an employee is terminated.  Employers with up to 14 employees must provide unpaid earned sick and safe leave under the same terms.

The paid leave can be used to: 1) care for the physical or mental health of the employee or a family member, including obtaining preventative care; 2) take maternity or paternity leave; or 3) obtain relief in response to domestic violence, stalking, or sexual assault of the employee or a family member.

There are some exceptions.  For example, the Act does not apply to workers who 1) regularly work less than 12 hours a week; 2) are under the age of 18; 3) are certain independent contractors; 4) are certain agricultural workers; or 5) work on an as-needed basis in the health and human services industry.  Additionally, there are exceptions for employers in the construction industry that are parties to collective bargaining agreements.

Additionally, employers may set some restrictions on the use of paid leave such as 1) only allowing the use of paid leave after an employee has worked 106 calendar days from the date of hire; 2) require up to seven days’ notice for foreseeable leave; and 3) implementing policies to prevent improper use.  Employers can also obtain verification regarding appropriate use of paid leave if it is used for more than two consecutive scheduled shifts or between the 107th and 120th calendar days of employment and the employee agreed to provide verification at the time of hire.

Employers are required to notify employees of their rights under the Act and to provide a written statement each pay period detailing the amount of earned leave available for use.  The Department of Labor, Licensing, and Regulation (DLLR) has been directed to create a model notice, but it is not clear when such notice will be available.

Next Steps for Employers

Employers should immediately review and revise their paid time off (PTO), sick, and other leave policies to ensure compliance with the Act.  At the same time, employers should monitor any action the General Assembly takes to delay implementation.  In the review and revision process, particular care should be given to:

  • Recordkeeping: employers must keep records regarding leave accrual and use for three years;
  • Notice: if DLLR does not issue a model notice before the implementation date, employers must create their own;
  • Payroll systems: employers must update payroll systems to report leave balances on pay stubs and meet the Act’s requirements;
  • Applicability: the Act applies to all part-time employees who do not fall into one of the exempt categories; and
  • Carryover: employers must allow employees to carry up to 40 hours of paid leave time over per year (subject to the 64 hour use limitation)

UPDATE (February 2, 2018): Today, the bill to delay the Act’s implementation received a favorable vote from the Maryland Senate Finance Committee and will move to the full Senate for a vote. The bill passed out of Committee with two important amendments that will benefit employers.

  • First, the Act would not take effect until July 1, 2018, rather than April 11, 2018, giving employers additional time to implement policies and procedures in compliance with the Act.
  • Second, leave accrual – currently slated to begin on February 11, 2018 – would also not begin until July 1. This should eliminate issues that would have arisen as leave accrued prior to employers being required to track it and in the absence of any regulations from the Department of Labor, Licensing, and Regulation.

The bill still has to pass both the Senate and the House of Delegates with a 3/5 vote if the Act’s implementation is to be delayed due to the bill’s designation as emergency legislation. The full Senate is expected to vote on the bill as early as Monday, February 5th.

UPDATE (February 8, 2018): The Senate passed the bill delaying the Act’s implementation, as amended, by a vote of 29-17.  The bill will now move to the House of Delegates for consideration where it will face an uphill battle due to the short time frame until the Act’s effective date.  Additionally, key legislators in the House have expressed opposition to delaying the Act’s implementation.

UPDATE (February 12, 2018): The Act is now in effect as the House of Delegates chose not to delay implementation.  A sample employee notice poster created by DLLR is here: http://www.dllr.maryland.gov/paidleave/paidleaveposter.pdf


Rachel Severance is an associate in the firm’s Labor and Employment Department, resident in its Washington D.C. office.