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Pay Equity Matters: Mind the Gap

In light of the federal court’s recent decision in National Women's Law Center, et al., v. Office of Management and Budget, et al., the new due date for EEO-1 filers to submit pay/hours worked data (now known as “Component 2” data) for calendar years 2017 and 2018 is September 30, 2019. The details were discussed in our May 3 Legal Alert. This post is a part of a two-part series, covering when the EEO-1 is due, who is subject to the EEO-1 reporting requirements, and what happens if the EEO-1 report is not filed. A following post will get into the details of compiling and submitting pay data and best practices.

Maine has recently joined the growing number of states that have passed laws prohibiting employers from requiring new or prospective employees to provide information regarding their prior salary or compensation. On April 12, Maine’s first female Governor Janet Mills signed into law “An Act Regarding Pay Equality.” The new law, which will go into effect on September 17, 2019—90 days after Maine ends its current legislative section—seeks to end wage inequality by prohibiting employers from taking salary history into account when setting compensation for new employees. Maine is the latest state in New England to pass legislation imposing this prohibition, following Massachusetts and Connecticut.

In a case that has been very closely watched by the higher education community, Spencer v. Virginia State University, the Fourth Circuit Court of Appeals recently upheld the dismissal of a wage discrimination case by a female professor who claimed she was paid less than male professors.

In a court filing yesterday, the EEOC suggested that employers have until September 30, 2019, to turn over pay data as part of their revised EEO-1 reporting obligations. It is uncertain yet as to whether the plaintiffs challenging the government’s actions will go along with this plan, and, more importantly, whether the federal court who resurrected the pay data reporting requirement will be on board with this suggested timeframe.

Cincinnati City Council has passed Ordinance No. 0083-2019 barring employers from asking applicants for their salary history.

An Oregon federal court just shot down Nike Inc.’s request to dismiss a pay equity class action claim fronted by four current and former Nike executives. In her February 26 ruling, a federal magistrate judge recommended that the case should proceed, as it adequately presented allegations that the company employed systemic practices that damaged all female employees. The ruling presents a stark reminder to all employers of the dangers of pay gaps while reinforcing the need to engage in critical compensation self-audits (with your counsel’s assistance).

The House Committee on Education and Labor just voted in favor of the Paycheck Fairness Act (H.R. 7, S.270), which, if ultimately enacted, would amend federal wage and hour law “to provide more effective remedies to victims of discrimination in the payment of wages on the basis of sex, and for other reasons.” The Paycheck Fairness Act, or PFA, notes that the Equal Pay Act (EPA) “has not worked as Congress originally intended,” and concludes that “improvements and modifications to the law are necessary to ensure that the Act provides effective protection to those subject to pay discrimination on the basis of sex.”

For all of the progressive legal advances in the area of pay equity we have seen across the country in recent years, a new report just released by an economic thinktank suggests that the wage gap is not only still present, but that is actually worsening as we head into a new year. The Economic Policy Institute's February 20 report, “State of Working America Wages 2018,” forebodingly notes that wage inequality “marches on”— and doesn't seem to be letting up. What do employers need to know about this latest information?

The first lawsuit filed under the Massachusetts Equal Pay Act (MEPA)—a claim against the Boston Symphony Orchestra (BSO)—was settled last week pursuant to the terms of a confidential agreement between the parties.

New Jersey employers can breathe a sigh of relief knowing that a federal court has just pronounced that the Diane B. Allen Equal Pay Act, which went into effect on July 1, 2018, is not retroactive. This gives you some additional time to comply with the dictates of the law—the most sweeping equal pay statute enacted in the country—without the fear that employees will succeed in federal lawsuits alleging non-compliance with the law’s equal pay mandates prior to its enactment. While there is a chance that a state court might view things differently, this decision is a positive development.

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