Getting paid what you are worth: Part two
Speakers
Jennifer Awrey
Senior Associate
Jennifer Awrey is a senior associate in Norton Rose Fulbright's Los Angeles office.
She is a member of the employment and labor practice group. Jennifer represents employers in all aspects of employment law, including discrimination, retaliation, wrongful termination, disability law, harassment, and wage and hour issues. She has represented employers in multiple jurisdictions in federal and state courts, and in administrative proceedings before federal agencies. Jennifer has also assisted employers with claims ranging from administrative charges and single plaintiff lawsuits to large wage and hour class actions.
Mario Barrera
Partner
Mario Barrera has over 20 years' experience handling first chair cases and trying those cases to verdict. As a labor and employment partner in Norton Rose Fulbright's San Antonio office, Mario has been involved in individual and
class/collective actions involving race, national origin, religion and gender discrimination; Age discrimination and retaliation cases; Workers compensation retaliation; Misclassification and overtime claims under the Fair Labor Standards Act; Discrimination and retaliation claims under the Americans with Disabilities Act; Discrimination claims under the Family and Medical Leave Act (FMLA); Breach of fiduciary claims under the Employee Retirement Income Security Act (ERISA); Occupational Safety and Health Administration Act (OSHA); Restrictive
Covenants; Employment torts and contractual claims.
A portion of Mario's practice also involves rendering legal advice and opinions on a variety of issues including all facets of discrimination, harassment, retaliation, wage and hour, restrictive covenants, employment agreements, separations, OSHA, ERISA and collective bargaining issues. Mario has conducted both employment
investigations and training seminars for a variety of clients.
Speakers
Shafeeqa Giarratani
Partner
Partner Shafeeqa Giarratani, an Austin native, practices in the employment and labor,
appellate and litigation groups. She represents employers in federal and state court and before administrative agencies and regulatory agencies. She is a strong advocate for her clients and regularly handles litigation matters at both the trial and appellate level, in alternative dispute resolution and before governmental agencies.
Shafeeqa has represented management in civil rights, wrongful discharge, Family and Medical Leave Act, Fair Labor Standards Act, employment tort, defamation, breach of contract, tortious interference and other employment-related charges and litigation. She also regularly advises clients that are federal contractors on affirmative action, legislative and regulatory changes affecting employment matters for federal contractors and Office of Federal Contract Compliance Program (OFCCP) compliance issues, from developing affirmative action plans to representing companies during the audit process. Shafeeqa also performs supervisory training seminars, prepares and reviews
Derek Rollins
Counsel
Derek Rollins is a member of the employment and labor group of Norton Rose Fulbright's Austin office. His practice covers employment litigation, including discrimination, retaliation, and wage and hour issues, as well as labor disputes. Derek represents employers in state and federal courts, as well as proceedings before the Texas Workforce Commission and the Equal Employment Opportunity Commission.
He is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization.
Agenda
•
New EEO-1 Reporting
Requirements
•
Pay Equity Compliance
and Penalties
•
Best Practices for
Compliance
Heightened Emphasis on Pay Equity Compliance
•
Signature issue for Obama Administration (Ledbetter Act, Equal
Pay Task Force, National Equal Pay Day)
•
Election Issue – Gallup Survey found that pay equity was one of
the top six issues rated “extremely or very important” by voters
•
Pay equity was the only one where voters said Democrats were in a
better position to address
•
A solid majority of Republicans or Republican-leaning voters found
closing the pay gap to be a major priority
•
Last webinar discussed increased state legislation
•
New state pay equity laws in California, Massachusetts, Minnesota, and
New York; pending elsewhere
•
Now increased focus from government agencies (EEO-1
Compensation Data Collection & FLSA revised regulations)
New EEO-1 Reporting
Requirements
Current EEO-1 Reporting Requirements
•
Applies to:
•
Private employers with 100+ employees
•
Federal contractors with 50-99 employees
•
Requires employers to list number of individuals
employed by job category, and by race, ethnicity, and
sex
•
Number of reports varies depending upon whether
business is single-establishment or
multi-establishment
•
Data pulled from one pay period in July, August, or
September of current survey year
New EEO-1 Reporting – Requires Inclusion of Pay
•
An expected next step:
•
President’s National Equal Pay Task Force targeted pay discrimination
•
Equal Pay Act largely ineffective
•
National Academy of Sciences study conducted
•
Emphasized data collection and agency collaboration
•
Who would proposed EEO-1 apply to?
•
All employers with 100+ employees
•
But not federal contractors with 50-99 employees
•
Approximately 63 million total employees
•
When does it go into effect?
•
Comment period ends early April 1, 2016
New EEO-1 Reporting Requests Pay Range Data
•
Aggregate data on pay ranges and hours worked
Increased Regulation – EEO-1 Fair Pay Report
•
Any 12 month period between July 1 and September 30
•
Employers will report based on W-2 earnings
•
Total compensation—information to include wages, salaries, and other
compensation, such as commissions, tips, taxable fringe benefits, and
bonuses.
•
Includes full-time, part-time and employees who have not
been employed the full reporting year
•
12 pay bands:
•
$62,920 - $80,079;
•
$80,080 - $101,919;
•
$101,920 - $128,959;
•
$128,960 - $163,799;
•
$163,800 - $207,999; and
•
$208,000 and over
•
$19,239 and under
•
$19,240 - $24,439;
•
$24,440 - $30,679;
•
$30,680 - $38,999;
•
$39,000 - $49,919;
•
$49,920 - $62,919;
What Is The Government Going To Do With Your Pay
Data
•
EEOC expects to use pay data during charge
investigations and to conduct studies of industry trends
•
EEOC will work with the OFCCP to “develop a software
tool that will allow their investigators to conduct initial
analysis by looking at W-2 pay distribution within a single
firm or establishment, and by comparing the firm’s or
establishment’s data to aggregate industry or
metropolitan-area data.”
•
Completed a Pilot Study in Sep 2015 using “synthetic data”
•
EEOC proposes that it would share EEO-1 pay reports
submitted by all employers with the OFCCP
Concerns and Criticisms of Proposed Changes
•
Confidentiality: Submitted data is “private” and
supposedly protected from FOIA requests, but not
from litigation
•
Unqualified data: Pay bands do not consider
legally-accepted variables (seniority, level of responsibility,
production, education)
•
Defend yourself: Anticipate “false positives” requiring
defense/explanation from employers
•
Investigation/Audit triggers: Data expected to
establish industry compensation standards, leading to
benchmarks for EEOC investigations and audit
Further Changes to Proposed Regulations?
•
Significant employer/industry resistance
•
EEOC’s notice underestimates burden hours
•
Not enough time to prepare, particularly for employers with
multiple locations
•
Data often meaningless using narrow job groups
•
Overwhelming potential liability
•
Confidentiality of pay data concerns among competing
companies
•
Show Cause letters for categorically defensible situations
•
More comprehensive study recommended
•
Anticipate revision before implementation
Pay Equity Compliance and
Penalties
More focus on Pay Transparency
•
All employers –
National Labor Relations Act
•
Prohibits discrimination or retaliation for concerted
activity, including discussion of pay
•
Applies to employees
•
Federal contractors -
Executive Order 13665
•
Prohibits discrimination or retaliation for inquiring about,
discussing, or disclosing compensation information
•
Applied to applicants and employees (including
supervisors)
•
Contractors must disseminate language informing
employees and applicants about the prohibition
Penalties for Non-Compliant EEO-1 Pay Data
•
Failure to timely provide EEO-1 pay data
•
No penalties or fines, but…
•
Violation/Show Cause letter
•
Best case: you timely provide accurate data
•
EEOC explicitly says that it will use the pay information “to
discern potential pay discrimination”
•
Used to support charges of pay discrimination, initiate
EEOC investigations
Penalties for Pay Discrimination Claims
•
Lilly Ledbetter Fair Pay Act
•
Pay claims can be based on any discriminatory pay
reflected in current paycheck
•
Penalties for pay discrimination claims – Equal Pay
Act and Title VII
•
Back pay
•
Front pay
•
Punitive damages
•
Liquidated damages
•
Attorneys’ fees
•
Injunctive relief
Recent EEOC Wage Settlements
•
EEOC v. Market Burgers, LLC d/b/a Checkers
•
EEOC alleged female shift managers, cashiers, and
sandwich makers made less than male coworkers
•
Wages suppressed by job assignments
•
$100,000 settlement
•
EEOC v. National Railroad Passenger Corp. d/b/a
Amtrak
•
EEOC alleged a single female HR manager for
wage-based discrimination and retaliation
•
Violated the Equal Pay Act and Title VII
Recent OFCCP Settlements
• Savannah River Nuclear Solutions - $234,895
•
57 female and 15 African American engineering employees
•
Paid less than male, white counterparts
• Lahey Clinic - $190,000
•
38 female housekeepers
•
Earning 70 cents less per hour than males
• G&K Services - $265,983
•
59 female laundry workers “steered” to lower paying jobs
than men
•
Given back wages and all offered higher paying positions
• Medtronic, Inc. - $290,000
•
78 Hispanic entry-level employees in Danvers, MA
Preparing for the new EEO-1 Reporting
Requirements
•
The regulations are not final! Submit comments
before the April 1, 2016 deadline
•
Determine what time frame to use for W-2 wages
•
Determine how to annualize compensation
•
Revisit hiring, placement, and promotion standards
What We Recommend to Protect Your Organization
Privileged Pay
Equity Analysis
Review Pay
Practices
Develop Pay
Disclosure Policy
Document,
Document,
Document!
Step 1: Privileged Pay Equity Analysis
Know what your data says
Prepare explanations for defensible,
bona fide differences – even though
new EEO-1 form doesn’t ask
Resolve problems before 2017
Privileged Pay
Equity Analysis
Step 1: Privileged Pay Equity Analysis
•
Involve outside counsel to
maintain privilege
•
Protect data from discovery during
litigation
•
Bolster argument against FOIA
disclosure
•
Formalities are key!
•
Craft engagement letter
•
Define scope of analysis
•
Identify appropriate, narrow control
group
Step 1: Privileged Pay Equity Analysis
•
Key Factors for Analysis
•
Know your job groups
•
Know your legitimate factors affecting pay
•
Think Outside the Box
•
Beyond individual pay decisions, are there
reasons why the defined job groups don’t
make sense for your company?
•
What is a regression analysis?
•
Statistical analysis that groups like employees and takes into account
factors that affect pay
•
Use regression analysis to explain why discrepancies may exist, and
to explain why the EEOC’s analysis is incomplete
Step 1: Privileged Pay Equity Analysis
•
How much is too much for pay inequity?
•
Small pay differences will add up when aggregated
•
“Chance” eliminated by statistics
•
From the proposed rule: “The EEOC’s statistical analysis
techniques are consistent with judicially recognized statistical
standards for identifying meaningful discrepancies.”
•
Courts generally find “two standard deviations” as probative of
discrimination. See Castaneda v. Partida, 430 U.S. 482, 496-97
(1977); Thomas v. Deloitte Consulting LP, No. Civ. A.
3-02-CV-0343, 2004 WL 1960097, *5 (N.D. Tex. Sept. 2, 2004)
Step 1: Proactive Privileged Pay Analysis
•
Pay disparities do not always signal a problem
•
Employers often has a non-discriminatory reason for problematic data
•
The EEO-1 form does not ask for pay decision explanation, but an
investigator will!
•
Internal investigation should include the basis for unexplained data
•
Why not just immediately “fix” the numbers?
•
Legitimate reasons are your best defense
•
“Quick fix” do not address long-term problems
•
“Fixes” can create more problems (e.g., reverse discrimination)
•
Where no explanation exists, consider pay adjustments:
•
Budget for any necessary pay equity adjustments
Step 2: Review Pay Practices
•
Prepare written policies on pay to ensure
consistency
Starting pay
Increases
Promotion
•
Not just how much, but why
•
Periodically review merit increases – at
least once a year
Review
Pay Practices
Step 3: Draft Written Pay Disclosure Policy
•
How the company will handle
requests for pay information
•
Who has access to pay information
•
Zero tolerance for pay request
retaliation
•
Provision for investigating and
resolving pay-related complaints or
inquiries
Develop Written
Pay Disclosure
Step 4: Document, Document, Document!
•
Document pay decisions
•
Create forms for explaining pay
inequity
•
Documentation is dynamic – create
paperwork for promotions and
advancements, not just hire/fire
•
If you don’t have the resources in
place now, create them before 2017!
Strong
Documentation
Don’t wait to address pay inequity.
Disclaimer
Norton Rose Fulbright US LLP, Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP and Norton Rose Fulbright South Africa Inc are separate legal entities and all of them are members of Norton Rose Fulbright Verein, a Swiss verein. Norton Rose Fulbright Verein helps coordinate the activities of the members but does not itself provide legal services to clients.
References to ‘Norton Rose Fulbright’, ‘the law firm’ and ‘legal practice’ are to one or more of the Norton Rose Fulbright members or to one of their respective affiliates (together ‘Norton Rose Fulbright entity/entities’). No individual who is a member, partner, shareholder, director, employee or consultant of, in or to any Norton Rose Fulbright entity (whether or not such individual is described as a ‘partner’) accepts or assumes responsibility, or has any liability, to any person in respect of this communication. Any reference to a partner or director is to a member, employee or consultant with equivalent standing and qualifications of the relevant Norton Rose Fulbright entity.
The purpose of this communication is to provide general information of a legal nature. It does not contain a full analysis of the law nor does it constitute an opinion of any Norton Rose Fulbright entity on the points of law discussed. You must take specific legal advice on any particular matter which concerns you. If you require any advice or further information, please speak to your usual contact at Norton Rose Fulbright.
