37744565 - legislation blank list, business conceptEarlier this month, members of the New Jersey General Assembly introduced legislation to prohibit employers from seeking wage/salary histories from prospective employees.  Assembly Bill 4119 (“A-4119”) follows on the heels of other states that are looking to take action on this issue, as well as similar efforts at the federal level.

The public policy rationale often cited by legislatures in passing these kinds of bills is that they may help close the gender wage gap.  The substantive discussion of whether these efforts are effective is beyond the scope of this blog, so for our purposes, we are focusing solely on the effect this legislation would have on employers.

Specifically, A-4119 would make it an unlawful employment practice:

For any employer to seek the wage or salary history of a prospective employee, or require, as a condition of employment, that an employee disclose information about either the employee’s own wages, including benefits or other compensation, or about any other employee’s wages; and for any employer to require that a prospective employee’s prior wage or salary history meet any minimum or maximum criteria as a condition of being interviewed, or as a condition of continuing to be considered for an offer of employment. 

As far as such things go, this is a broad prohibition — and one that would subject employers to liability under New Jersey’s Law Against Discrimination.

In addition to the text above, there are three other provisions to note.  First, the bill also notes that it would not prohibit prospective employees from volunteering wage/salary history, as long as that disclosure was not coerced by the prospective employer.  Second, employers are only permitted to confirm (or permit the would-be employee to confirm) wage/salary history after making an offer of employment.  Third, A-4119 also includes an anti-retaliation provision.

As with all proposed legislation, standard disclaimers apply:  this is the bill in its current form, which may or may not ultimately be enacted, and which may or may not be amended to varying degrees if it is ultimately enacted.  We will continue to monitor this legislation and provide any relevant updates should it move in the New Jersey Legislature.

As my colleague Christina Stoneburner wrote earlier in the week, we aren’t even through summer 2016, yet the number of new employment laws and regulations enacted that employers must contend with are already piling up.  Massachusetts recently joined the fray, with Governor Baker signing into law earlier this month S.2119 (effective January 1, 2018), which addresses pay equity discrimination based on gender.  Notably, the new pay equity legislation reiterates what Massachusetts and federal law have long stated: pay disparities based on gender are unlawful.  However, this new law goes further, is more employee-friendly than ever, and specifically addresses neutral conduct that arguably affects gender pay equality.

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One unique and notable component of the new law is a first-of-its-kind “ban the box” type prohibition that makes it unlawful to inquire regarding the prior salary history of prospective employees (similar to the prohibition of criminal conviction questions that many jurisdictions have recently adopted). Questions about prior salaries are extremely common and can be found on most employment applications.  However, this practice must now be eliminated in Massachusetts.  The intent of the legislature is to root out historic pay discrimination by forcing pay decisions to be made based on the job and not prior salaries.  The law prohibits, any time prior to making an offer of employment (with salary offer), either directly requesting prior salary information from the prospective employee and/or his or her former employers, or indirectly researching the same.  Moreover, employees cannot be prohibited from discussing their wages amongst themselves (although such policies are already prohibited by current interpretations of the National Labor Relations Act).

In addition, the law reiterates that actual pay differences based on gender are expressly prohibited where employees are engaged in “comparable work,” which is defined as any job(s) (regardless of titles) that require “substantially similar skill, effort and responsibility . . . under similar working conditions.”  Moreover, the law clearly delineates the few bona fide non-discriminatory reasons allowed for neutral pay policies, namely: (i) seniority pay systems, (ii) merit pay systems, (iii) production or sales quality/quantity pay systems, (iv) geographic differences, (v) job relevant education, training, and/or experience, and (vi) job related travel.  Lastly, the statute contains an anti-retaliation provision that prohibits taking retaliatory action against employees or applicants that oppose practices prohibited by the law.

An action enforcing the statute may be brought within three years of any discriminatory act, either by the attorney general or through civil litigation by the affected employee(s) and/or applicant(s), including but not limited to by class action.  Damages recoverable include any owed or diminished wages and benefits, as well as additional “liquidated” damages (which doubles any owed compensation) and any reasonable attorneys’ fees and costs.

The one piece of good news for employers is that an affirmative defense is provided in the statute where an employer, within the prior three years, conducts a good faith self-evaluation of its pay practices in order to eliminate pay discrepancies based on gender. As a result, it is recommended that prior to the effective date of the act that employers conduct a thorough review of all employee handbooks, non-disclosure agreements, employment applications, and other new hire policies and forms, as well as review institutional pay structures and systems, to ensure compliance with the law.  As always, your friendly Fox Rothschild attorneys are here to help in this regard.

 

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We are honored to have been named by Working Mother Media and Flex-Time Lawyers as one of the 50 best law firms for women.  This is the fourth time we have been named to the list.

Our Firm works very hard to insure the advancement and retention of all attorneys, but we do have targeted initiatives, such as our Women’s Initiative, to focus on female attorneys. The Women’s Initiative, along with the Diversity Committee, serve as resources and advocates for minority lawyers at the Firm.

Diversity initiatives such as these can have many positive impacts on companies, including improving employee morale, decreasing discrimination charges, and reducing employee turnover. Studies have also shown that having a diversity program improves a companies bottom line and can increase customer-base as customers seek to find business partners whose work forces match theirs in terms of diversity.

Diversity programs are not without critics, however.

Employers who are thinking about setting up diversity initiatives do need to be careful that they are not exposing themselves to claims of reverse discrimination.  One of the keys to this is insuring that all employees, regardless of whether part of the majority or minority, understand the importance of these initiatives for the company as a whole.  Another key is to consult with employment counsel as to the lawful interest groups that can be established without violating discrimination laws.

Employers who are looking for some practical suggestions as to human resources policies that help manage diversity can also review the EEOC’s Best Practices of Private Sector Employers for suggestions.

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A Colorado federal judge recently ordered the City and County of Denver to pay $1.67 million to job applicants who alleged that Denver’s employment screening tests had a disparate impact on black and Latino applicants.  The class action was tried in an 8-day bench trial in April 2016 after Judge Krieger denied summary judgment.

Denver used ACCUPLACER tests published by College Board as pre-placement tests.  The tests were developed to place students in college-level courses and were not validated for use in making hiring decisions.

This case is a rather expensive reminder that any type of employment test must be validated for employment purposes.  The EEOC has issued guidance on the use of employment tests that provides some best practices for employers to follow.

The most important thing to think about is whether the test is really job-related.  In other words, does the test actually relate to job skills that are required for the job?  Then, the test must also be checked to insure that it does not have a disproportionate impact on any protected class.

Employers who have tests validated once cannot simply assume that the test is safe to use in perpetuity.  If job duties or skills have changed for the position for which the test is being administered, then the test should be re-validated.

Finally, employers should not just assume that because a test is simple it does not need to be validated.  Even a simple math test given to applicants who may handle money would need to be validated.

 

As many of you probably know, the EEOC has issued a proposed rule that, if adopted, would require significant changes to the EEO-1 reporting requirements.  The rule proposal is designed to help the EEOC gather data related to pay discrimination claims.  If adopted, it will require employers who are required to complete annual EEO-1 reports to submit pay data for all employees in addition to the number of employees in each racial classification.

This rule is likely going to increase the number of investigations and complaints filed alleging pay disparity.  The EEO-1 reports, by themselves, will be used in a broad sense to identify statistical anomalies that may trigger an investigation.  Missing from that raw data will be any legitimate reasons for pay disparities, such as experience and education levels.  However, employers will be required to comply with what could be a lengthy investigation process.

The comment period is currently scheduled to end on April 1, 2016.  Recently, ten Republican senators sent a letter to the EEOC asking for the comment period to be extended 90 days.  No word yet on whether the extension will be granted.

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As most employers are acutely aware, additional employee protections, prohibitions, and, most importantly, costs continue to pile on to the employer community every year, particularly in New York City (among other jurisdictions).  In addition, this trend shows no sign of abating given the current legislative environment.  As a consequence, thoroughly vetting prospective employees has become more critical than ever for employers.

Once an Trial by Fireemployee is on boarded, it is increasingly difficult, or impossibly fraught with liability, to terminate that employee.  Gone is the time when you could simply hire an employee and “see how it works out” during an orientation period with relatively limited liability.  Moreover, traditional mechanisms for reviewing employees before hire, such as criminal and credit background checks, or reviewing a candidate’s past unemployment history, have been curtailed in an increasing number of jurisdictions.  This has resulted in the need for more and more creative strategies and practices to ensure the right employees are hired from the outset.

One idea we occasionally hear is the possibility of an unpaid trial or try-out period for prospective employees.  This can take various forms, however typically a prospective employee, after completing his or her initial interviews, will be asked to “show what he or she can do,” i.e. prove his or her ability to directly perform the job.  This could either be a survey, a written test, the preparation of sample work product, a simulated workday (or more), or a combination of all of the above.  This practice can be incredibly helpful for a number of professions and industries.  A prime example would be for attorneys.  If a prospective law firm were to ask me, on the spot, to prove my legal writing ability by preparing a sample motion to dismiss, it would be incredibly difficult for me to fake my claimed abilities.  However, like all employment policies, this practice must be well crafted and implemented with caution.

As my fellow labor and employment colleagues here have previously written, laws involving the treatment of unpaid internships have seen heavy scrutiny recently in the federal courts.  However, the permissible bounds of unpaid trials, try-outs, simulations, and tests have not yet been explored, and almost no analysis and interpretive guidance exists.  As a result, some questions remain.  What may I ask a candidate to do?  Is a trial period appropriate if unpaid?

One solution is to simply pay the prospective employee for the trial period in order to avoid any unpaid wage liability.  However, paying any applicant poses a whole host of other issues.  If payment is given for a trial period, it (arguably) indicates an employment or quasi-employment relationship.  This is not advisable, as an employer wants to retain the ability to say “yes” or “no” to the candidate after the try-out has concluded, while minimizing exposure under employment and immigration laws (to the extent one can).  Furthermore, the proper tax treatment of such pre-employment payments is unclear.

While still an open issue, the better practice, depending on the exact facts, would be to have an unpaid pre-employment trial period or simulation.  In theory, the applicant would not yet be considered an “employee.”  However, the key is to ensure that any simulation or trial conducted is truly a test, occurs prior to an offer of employment, and that any work product is used for evaluative purposes only.  If the simulation or trial involves a cook who must prepare sample dishes, any food that is prepared cannot be served to customers or otherwise benefit the restaurant.  If the simulation or trial involves a typist who must transcribe audio recordings, the transcription cannot be a “real” project for a client or business, but simply a sample to be reviewed and evaluated.  Any materials and supplies used must also be provided by the employer.  The more the process hinders the business and is relatively short in duration, the more likely it will be found to be lawful.

An unpaid trial period or test can be a useful tool to evaluate a candidate and increase the quality of your hires.  However, any such policy should simply determine the candidate’s ability to perform the job and not otherwise benefit the business.  Before implementing any such policy, it is also critical that legal counsel review it thoroughly.  Whether a pre-hire trial, try-out, test, or simulation is appropriate under the circumstances is highly fact dependent and the answer may change depending on the state and/or local laws that may apply.

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End of year vacations and holidays are fast approaching. Everyone is eager to see family and enjoy some much needed time away. It is easy to forget, however, that the ball drop in Times Square will not only ring in the New Year, it will also ring in various new and modified employment laws in several jurisdictions.  December and January are often a hotbed of effective dates for new legal and regulatory changes, and this year is no exception. Now is a good time to review your handbook and other policies to ensure compliance with these various regulatory changes, before they go into effect this January.

For example, in New York, hospitality employers (including restaurants and bars) will see most of the tip credit typically applied to the minimum wages of tipped front-of-house employees evaporate. The tip credit minimum wage for food service employees in the hospitality industry is set to increase from $5.00 per hour up to $7.50 per hour come January 1, 2016. Moreover, beyond the hospitality industry, the regular minimum wage in New York will also increase to $9.00 an hour, in addition to higher minimum wages applicable to fast food employees ($10.50 in New York City, $9.75 in the rest of New York State). These minimum wage increases are not limited to New York alone, with several states and municipalities also implementing minimum wage increases as we approach 2016. Moreover, New York as well as many other states and municipalities also require any affected employees to receive new rate of pay notices and/or tip credit notices reflecting these minimum wage increases in accordance with federal, state, and local law.

In addition, numerous state and local discrimination laws, leave laws, and other employment-related laws will also go into effect January 1st. For example: California is expanding its child-related activities leave law to broaden what is considered covered child care and to include stepparents, foster parents, or those who are “in loco parentis” to a child.  In Oregon, ban-the-box legislation goes into effect prohibiting questions on an employment application regarding an applicant’s criminal background. In New York, the “Women’s Equality Act” goes into effect a few weeks after the New Year, which includes several new laws that increase equal pay protections, the applicability of sex discrimination laws, and recovery of fees in sex discrimination lawsuits, in addition to additional protections against familial status discrimination and requiring accommodations of some pregnancy-related conditions.

These changes are just a small sampling of the numerous legal and regulatory changes across the country awaiting us in the New Year. Getting ahead of these policy shifts is necessary to avoid unneeded headaches or, god forbid, liability later on. Before you head off for your holiday vacation, make sure to review any legal changes coming soon to the jurisdictions in which you operate.  It will provide you peace of mind once all the champagne has worn off on New Year’s Day.

Tomorrow is Veteran’s Day.  A day to remember and honor the sacrifices made by our men and women who have served in our military.

Our partner, Patrick Murphy, is co-hosting a one-hour prime time television special on the Triumph Games which will air at 7 pm on CBS Sports tomorrow night.  Another of our partners, Jody Simon, served as General Counsel for the show, so this one is definitely close to us here at Fox Rothschild.

The Triumph Games will feature 12 veteran athletes competing in adaptive games for $240,000 in prize money.  The games should be inspiring to say the least.

We wanted to take this moment to encourage you to watch the games, but also to remind government contractors that the OFCCP’s benchmark for hiring protected veterans is currently set at 7%. Under the final Vietnam Era Veterans’ Readjustment Assistance Act regulations that went into effect last year, covered federal contractors are required to establish a hiring benchmark for protected veterans.  Contractors are required to compare the percentage of employees who are protected veterans to this benchmark.  Contractors should use this comparison to determine how effective their veterans outreach efforts have been.

The OFCCP has set two options for establishing the benchmark.  More details can be found on the DOL’s website here.

We would like to thank everyone who has served for their service. We would also like to wish that those who are currently serving and are in harm’s way come home safely.

Finally, we would like to wish the Marines a Happy 240th Birthday!

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Back in JBan the Box Effective in NYCune, we reported that the New York City Council passed, and Mayor Bill de Blasio had signed into law, the New York City Fair Chance Act (FCA). This new law prohibits most employers (with limited exceptions for law enforcement, industries that require background checks under federal, state, or local law, etc.) from inquiring about an applicant’s arrest or criminal conviction record until a conditional offer of employment is extended. This is just a friendly reminder that the FCA is now effective as of October 27, 2015 in New York City. If you have not already done so, employers with operations in New York City should review their employment applications and other hiring policies to ensure compliance with this new law.

So called “Ban The Box” legislation has been enacted in several states, and over one hundred other jurisdictions, in order to prevent individuals with arrest and criminal conviction records from being dismissed early in the employment application process. This legislation, most notably, prohibits questions commonly found in employment applications that require applicants to disclose arrest and/or criminal conviction history. Moreover, this new law prohibits an employer’s independent investigation of arrest and/or criminal history, as well as verbal inquiries regarding the same, prior to a conditional offer of employment.

Please note that, even after a conditional offer is made, Article 23(a) of the New York Correction Law still applies. The New York Correction Law contains strict requirements and restrictions if an employer in New York state wishes to conduct a post-offer criminal background check and/or rescind an offer of employment because of an individual’s criminal history. In sum, all employees who are responsible for hiring should be aware of these restrictions and know to proceed cautiously when criminal history issues arise.

I see a lot of posts focusing on mistakes that applicants make in an interview, but in my line of work, I see the consequences of what happens when employers make mistakes in interviews.  A mistake can be so easily made that could lead to a lawsuit by the applicant or losing a qualified candidate.

I was reminded of this by my own interview experience last week.  We were interviewing summer associate candidates last week and I asked one candidate what has been the biggest challenge so far in law school.  The candidate responded by asking “Biggest challenge in law school or in life?”  Although I was curious to know the answer to the “in life” question as there seemed a reason that it was brought up, I quickly realized no good could come of that question.

For all I knew, the biggest challenge involved fleeing a hostile dictatorship, dealing with a terminally ill child, or being the victim of a crime.  These may seem like extreme examples but are all things that relative strangers have told me over the years (thankfully not in an interview situation) after I asked what I thought was an innocuous question as I tried to learn more about a new acquaintance.  As these thoughts flashed quickly through my mind, I responded to the applicant, “Let’s just focus on law school.”

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So, what are some common mistakes I’ve seen interviewers make that lead to losing candidates or worse, legal liability?

  1. Saying something discriminatory in the interview.
  2. Saying something that could be perceived as discriminatory — this may seem like a regurgitation of #1, but in my experience, it is rare that people say something outright discriminatory in an interview.  Instead, it is comments that are made about protected classes that could be perceived as discriminatory that get interviewers in trouble.  For example, an applicant notes on his resume that he is fluent in Spanish and happens to have a Hispanic last name.  It is perfectly fine for the interviewer to ask the applicant questions about how proficient he is in Spanish.  It is not acceptable for the interviewer to say, “I see from your last name that you are Hispanic. You must have learned Spanish from your parents, would you feel comfortable translating complicated written documents into Spanish?”  The interviewer should have just asked about the translation and said nothing else.
  3. Being distracted or checking emails during an interview — I think some hiring managers got a little spoiled by the economic downturn of a few years ago.  In the aftermath of the subprime mortgage crisis, there was a glut of qualified people suddenly thrust into the labor market due to lay-offs.  Candidates had limited options and were much more likely to take jobs that were not ideal simply to have a job.  As the market has improved, candidates have more options as to where they want to work.  Interviewers have to realize that they need to sell the applicant on working for the company just as much as the candidate needs to sell the interviewer on why he or she is right for the job.
  4. Promising Anything — until a final decision is made as to who is going to be hired and at what salary, no promises should be made that the employee is going to get the job or that a particular salary or benefit will be offered.
  5. Being negative about Human Resources — I have heard tales from friends who have interviewed with companies that the hiring managers grouse about Human Resources during the interview.  It usually comes up in the context of “I really like you, but I do have to get HR approval.  If it were up to me, I’d hire you now but they have to meet you just to sign off on the hire. It’s really silly, but they make us do it.  They can be really slow.  Expect to hear from them in about two weeks.”  Human Resources is responsible for addressing employee relations issues in the workplace, including complaints of harassment and discrimination.  Comments like these make HR seem ineffective and unnecessary, which plants a seed in an applicant’s head that HR is not the place to go to resolve disputes.  This may mean that complaints go unaddressed and discontentment festers until it erupts in a major problem.

I’m sure if I thought about it, I could come up with more examples of interviewer mistakes.  Do you have more examples?  We’d love to hear from you.