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Adjusting to Pay-History Bans

HR professionals trying to adjust to the growing number of pay-history bans may want to review this interesting article from SHRM. As SHRM notes 15 states have already adopted pay-history bans. One approach the article discusses could be “complete compensation transparency” where the employer posts not only the opening, but also the pay range, job qualifications, job description and any other hiring criteria. Many employers may find that not practical. And even employers for whom it might work will still need to train hiring personnel and managers on the new do’s-and-don’t’s of these laws, for example, what to do if the employee volunteers pay history. Still as employers are considering these new laws, this article may prove a good brainstorming tool for HR professionals.

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Gov. Polis signs three new Colorado laws into effect

The Denver Business Journal is reporting that Colorado Governor Polis has signed three new Colorado laws into effect. As the DBJ reports, each came with some opposition and will have impacts on employers in Colorado.

Gov. Jared Polis on Monday signed a trio of bills that he said will improve the fortunes of working-class Coloradans — even as opponents have criticized the measures will make life harder for employers and possibly steer companies away from expanding in Colorado.

These laws are:

  1. Colorado House Bill 19-1025 is a “Ban the Box” law. It restricts, with some exceptions, an employer’s ability to inquire, especially on applications, about prior criminal history.
  2. Colorado House Bill 19-1210, which permits local governments to increase the minimum wage in their jurisdictions above Colorado’s statewide minimum.
  3. Colorado HB 19-1306, which requires the Colorado Department of Labor and Employment to report “data that it currently collects regarding the call center work force, including tracking call center jobs and wage analysis of customer service employees,” quoting the bill’s official summary.

These laws now join in effect, the previously signed (May 22, 2019) HB19-085 (Equal Pay for Equal Work Act).

Taken together, HB 19-1025 and HB 19-085 in particular give employers good reason to immediately:

  • Review and revise their handbooks, workplace policies, and hiring documents accordingly.
  • Review and revise their hiring and promotion practices.
  • Consider undertaking an audit of pay levels as encouraged now by HB19-085.
  • Train supervisor, manager and HR accordingly.
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Employers should begin preparing to turn over EEO-1 pay data by September 30, 2019, details to follow from EEOC shortly

A federal trial court judge in the District of Columbia cleared the path for the EEOC controversial rule requiring employers to turn over two years of pay data by September 30, 2019. The court’s order follows a recent decision in which the judge provided further reasoning. In short the court held that, in this battle between two federal agencies (the EEOC and the OMB), the Trump administration’s OMB had failed to establish a basis for freezing the Obama-era EEOC’s pay-data collection rule. That Obama-era rule (2016) added to the longstanding workforce data requirements for an EEO-1 (which the EEOC now calls the “Component 1” data requirements), a requirement to submit pay data as well designed to demonstrate pay gaps related to gender, race, and ethnicity (now called the “Component 2” data requirements).

Which two years of data will be required and when can an employer start submitting its EEO-1? The judge gave the EEOC leeway to decide, but ordered it to post on its website an initial decision by April 29 and the final decision on May 3. The EEOC’s website states it is already “working diligently on next steps in the wake of the court’s order.” The EEOC notes its portal for submission of Component 1 data is already open.

Employers will want to visit the EEOC’s website following April 29 and again following May 3, at least, for further information on this breaking development.

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Supreme Court reverses Ninth Circuit because … “Federal judges are appointed for life, not for eternity”

The Supreme Court reversed the Ninth Circuit’s decision in a potentially landmark Equal Pay Act case, because … “Federal judges are appointed for life, not for eternity.” In this per curiam decision, the Supreme Court, not surprisingly, held that a judge needs to be alive to issue a ruling in a case.

How could the Ninth Circuit have thought otherwise? It was an exceedingly controversial case. The Ninth Circuit would have split evenly without the deceased judge’s vote, so the Ninth Circuit, oddly, decided to go ahead and count his vote. In fairness he had expressed his intent to vote one way, and had actually authored an opinion accordingly. He unfortunately passed away though before the opinion was issued. The Supreme Court held that the Ninth Circuit erred by continuing to count his vote (in this case and others). The Court explained that a judge’s vote cannot be counted until an opinion is filed, especially because “a judge may change his or her position up to the very moment when a decision is released.”

Because Judge Reinhardt was no longer a judge at the time when the en banc decision in this case was filed, the Ninth Circuit erred in counting him as a member of the majority. That practice effectively allowed a deceased judge to exercise the judicial power of the United States after his death.  But federal judges are appointed for life, not for eternity.

The underlying case is very controversial. As explained in a previous blog post, the issue has the potential to bring a pay-history ban to all 50 states by way of federal common law, by interpreting the longstanding Equal Pay Act as effectively banning inquiries and consideration of pay history.

A per curiam decision is a decision issued by a court with more than one judge (like the Supreme Court and other appellate courts) that is authored by the court itself, without identifying one or more individual judge’s contributions to the writing of the opinion or even votes in the case. It is not signed by anyone judge (though individual judges may, if they choose, sign dissents).

Source: Yovino v. Rizo, 586 U.S. —, case no. 18-272 (2/25/19)

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Pay history bans coming, at a federal level, by way of the Circuit Courts?

A growing number of state and local governments prohibit asking applicants about their pay history or using prior employer pay histories as a basis for setting employee pay. Two Circuit Court cases suggest that such a ban may be coming, not by way of state and local legislation, but at a federal level under currently existing federal laws known as Title VII and the Equal Pay Act.

The Circuit Courts are the nation’s federal appellate courts. They are divided (and numbered) by region. They are for practical purposes generally the highest courts in the land, just beneath the Supreme Court of the United States. Very few cases result in Supreme Court review; the Circuit Courts resolve the vast bulk of federal appellate litigation without cases ever rising to the Supreme Court.

Pay history bans are growing across the country because advocates for equal pay, particularly between men and women, contend that one reason women earn less than men in many positions, is simply that women tend to have previously earned less than men in prior positions. In other words, they contend it is a self-perpetuating cycle.

In one case, the Ninth Circuit held last year, in 2017, that, consistent with its precedent, an employer may set pay levels purely on the basis of pay histories. However last summer the Ninth Circuit withdrew that decision and ordered the matter reheard en banc (by the entire bench of its judges). The case is pending reconsideration.

In the other case, the Eleventh Circuit just ruled in a Georgia case that an employer was not entitled to summary judgment, in other words, it would have to explain itself to a jury, where the female plaintiff argued she was underpaid compared to her male predecessor. The Eleventh Circuit case did not go so far as to hold that pay histories cannot be considered. It simply held, on the basis of the record before it, that pay histories were not themselves enough to warrant ruling for that employer. The Eleventh Circuit’s decision may be limited to its facts in that, there, the company’s HR manager had testified to general female-male pay disparities at the company and further that the company’s general manager had made an anti-female remark.

Employers should consider monitoring pay history bans.

Source: Rizo v. Yovino, case no. 15-372 (9th Circuit) (case pending reconsideration en banc); Bowen v. Manheim Remarketing, Inc., case no. 16-17237 (11th Cir. 2/21/18).

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