On January 23, 2017, Philadelphia Mayor Jim Kenney signed the Wage Equity Bill into law. The new law, influenced by the Massachusetts pay equity law, makes it unlawful for Philadelphia employers and employment agencies to ask about an applicant’s wage and benefit history or to rely on such applicant’s wage history to determine future wages. The law also prevents employers from retaliating against any candidate who fails to respond to any wage inquiry. The law takes effect on May 23, 2017, and aims to address historic wage gaps which affect women and minorities, by prohibiting employers from basing compensation on a candidate’s wages at a previous employer, given the historical pay inequities between men and women and minorities. In its “finding” sections, the new law provides statistical examples of wage disparities and encourages employers to set salary offers based on the job responsibilities of the position sought, rather than prior wages. Nothing in the law prohibits an applicant from disclosing voluntarily his or her compensation history. And, employers may still ask a candidate about his/her compensation expectations. The law also requires employers to post fair practices notices, which will be made available by the Commission. Employers should carefully review their employment applications and related documents to ensure compliance by May 23, 2017. For answers to...
Category: Wage and Hour
With the final overtime rule for the “white collar” exempt employee minimum salary level issued by the United States Department of Labor (the “DOL”) on hold, the New York State Department of Labor’s proposed overtime rules may take precedence for New York employers. As we previously communicated, the DOL’s new overtime rule – which substantially increases the minimum salary that employers must pay to certain classes of employees to avoid the overtime pay requirements of the federal Fair Labor Standards Act (“the FLSA”) – was scheduled to take effect December 1, 2016, but was placed on hold by a preliminary injunction issued by a Texas federal district court. New York State has now taken matters into its own hands independent of the now-suspended federal rule change.
On November 22, 2016, in Nevada v. United States Department of Labor, et al., a judge in the United States District Court for the Eastern District of Texas issued a nationwide preliminary injunction enjoining the United States Department of Labor (“DOL”) from implementing and enforcing the Fair Labor Standards Act (“the FLSA”) final overtime rule that would otherwise become effective on December 1, 2016.
On October 27, 2016, The New York City Council unanimously passed a local law, the Freelance Isn’t Free Act, aimed to enhance protections for freelancers and purportedly to prevent wage theft. Under the law, freelancers include individuals (and organizations having no more than one person) retained as an independent contractor to provide services in exchange for payment. The law, however, excludes from coverage sales representatives (as defined in section 191 of the New York Labor Law), persons engaged in the practice of law under the contract at issue (and who are members in good standing of a bar and not under any restrictions with respect to the practice of law), and licensed medical professionals. The law does not apply to the United States government, New York City, and New York State (and their respective offices, departments, agencies, authorities, etc.) any local government, municipality, or county, along with any foreign government.
Earlier this month, Massachusetts became the latest state to pass expansive pay equity legislation to combat the gender wage gap, surpassing even the rigorous new requirements passed by New York and California in late 2015. Notably, Massachusetts is the first state to ban employers from requesting salary history as part of the interview or employment application process. The legislation, which passed unanimously and was signed into law by Governor Charlie Baker, will go into effect on January 1, 2018. To prepare for its implementation, employers with employees in Massachusetts should begin to adjust their hiring process and compensation policies, and consider conducting a self-evaluation of their pay practices to take advantage of Massachusetts’ law’s affirmative defense.
The United States Department of Labor (“the DOL”) has finally issued the long-awaited rules dramatically increasing the minimum salary level for the overtime-exempt classifications under the Fair Labor Standards Act (“the FLSA”). The new rules also incorporate mechanisms to adjust this salary level in the future. The effect of future adjustments will require an employer to pay wage increases unrelated to the employer’s financial condition or employee performance. The new rules will have the greatest impact on those employees currently classified as exempt but who will not meet the new minimum salary threshold. These rules go into effect December 1, 2016, a date later than DOL originally communicated, which gives employers an opportunity to conduct a self-analysis to prepare for these changes.
With summer around the corner, it is a good time for a refresher on legal implications when hiring interns. Specifically, when must interns be paid and what other legal protections do interns have? Wage and Hour Issues – As has been widely publicized in recent years, a number of companies who utilize unpaid interns have found themselves the object of lawsuits. It is thus important for companies to make an informed decision on the compensation issue before the hiring process begins.
Senate and House Republicans pushed back on the DOL’s proposed final rule on the “white-collar” overtime exemptions by proposing a new bill, the Protecting Workplace Advancement and Opportunity Act, seeking to invalidate the DOL rule. Under current regulations, employees must satisfy certain tests regarding the job duties they perform and be paid at least $23,660 per year, on a salary basis to be considered exempt under the FLSA’s “white-collar exemptions.” The DOL’s proposed final rule, however, seeks to more than double the minimum salary level from $23,660 to $50,440 per year and provides for automatic annual increases to the minimum salary threshold. Although the proposed final DOL rule does not include any specific changes to the “job duties” component of the exemptions, such changes may be included in the final rule.
EEOC to Collect Wage and Hour Data Based on Race, Ethnicity, and Gender in Effort to Aid Enforcement of Laws Requiring Pay Equity
The United States Equal Employment Opportunity Commission (“EEOC”) has proposed a change to the EEO-1 Report, the standard form used to collect workforce profiles from certain private industry employers and federal contractors. In its current iteration, the form annually requires employers to categorize their workforces based on gender, race, ethnicity, and job category, using data collected from one pay period occurring in July, August, or September of the reporting year. The amended form would require further categorization of employees based on W-2 earnings and hours worked.
The U.S. Department of Labor (“DOL”), Wage and Hour Division (“WHD”) recently issued an Administrator’s Interpretation (“Interpretation”) on joint employer liability under the Fair Labor Standards, Act, 29 U.S.C. § 1801 et seq. and the Migrant Seasonal Agricultural Worker Protection Act, 29 U.S.C. § 201 et seq., that provides additional guidance to employers but also may demonstrate the DOL’s increased efforts to focus on joint employer liability for wage and hour compliance. According to the WHD, the workplace increasingly involves use of outsourcing, shared employees, integrated employers, and other forms of co-dependent business models. The WHD seeks to ensure compliance with wage and hour laws for entities that rely upon such alternative workforces. While the Interpretation is not binding upon the courts and constitutes guidance for employers, it lists factors extrapolated from court decisions, other DOL guidance, and related sources that should be considered where an employer utilizes alternative labor sources or has sister or related entities that share common operations or are interdependent.