Employment Law This Week®: Pay Data Collection, Strengthening Worker Protections, NJ's "Wage Theft" Legislation

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This Employment Law This Week^® Monthly Rundown discusses the most important developments for employers heading into September 2019. The episode includes:

1. DOJ Appeals Ruling on Pay Data Collection

There has been more pushback around EEO-1 federal pay data collection. On August 16, the Department of Justice appealed a district court’s ruling that reinstated the Obama-era pay data collection rule. This appeal comes just before the September 30 collection deadline, but the briefing schedule in this appeal extends beyond September 30, so there is little chance of resolution before the Equal Employment Opportunity Commission’s (EEOC’s) reporting deadline. Commissioner Victoria Lipnic has said that “nothing will stop” an employer’s obligation to submit the data on time. The appeal raises significant questions about whether and how the data will be used.

“The Justice Department claims that the court erred in two ways. One, that it found that the plaintiffs below had standing to bring the suit, and, second, that the court erred in directing, specifically, EEOC in how to do the data collection. We’re recommending to clients to continue to prepare for the filing, but to hold for a bit until the end of September—prior to the deadline—but hold until we have a little bit more clarity from the court about what direction this could go. The interesting thing about this data collection exercise has been about pay equity more generally. What is the purpose in conducting a pay equity audit? The purpose of doing an audit, under privilege, we would recommend, is to find out what’s going on in your own comp system. Not to say that you’re being discriminatory in any way, shape, or form, but to really understand what’s going on. Every time you hire someone or terminate someone, you change the pay scales or the pay direction that your organization is in. So, looking at it routinely is a good practice. It’s a good business tool to manage your workforce.” —Robert O’Hara, Member of the Firm, Epstein Becker Green

Update:  On September 11, 2019, the EEOC stated that it would not seek to collect Component 2 in future years. The agency noted cost burdens on employers far outweighed the unproven utility of the data. However, the EEOC’s decision on future collection has no bearing on the current collection due September 30, 2019, as we discussed in our video and podcast stories this month.

2. State Legislation Strengthens Worker Protections

More worker protections are coming online in states across the country. New York passed new legislation that prohibits discrimination based on religious facial hair or clothing, or other religious attire. The new law comes as part of a package of legislation that increases worker protections in harassment and discrimination claims and settlements. This expands upon last year’s groundbreaking sexual harassment legislation. In Illinois, Governor J.B. Pritzker signed similar comprehensive legislation that, among other things, limits arbitration agreements and non-disclosure clauses, mandates sexual harassment training, and extends job-protected leave to victims of gender violence. The Illinois legislation goes into effect January 1, 2020.

3. New Jersey Enacts Sweeping “Wage Theft” Legislation

New Jersey has enacted sweeping new legislation that includes heavy penalties for the failure to pay wages. New Jersey employers could now face triple damages for wage claims, and even for typical contract claims. And the new law also extends the statute of limitations for minimum wage and overtime claims.

“The law became effective immediately upon signing on August 6. Whether it will be retroactive is an issue that’s likely to be decided by the court. However, the New Jersey Department of Labor appears to have taken the position that it is retroactive. Among the things that employers should do now are—one, make doubly sure that all your employees and independent contractors are properly classified. Two, ensure that your non-exempt employees record every minute of their time. Three, review your employment agreements, including your commission plans and bonus plans and executive agreements, to make sure there are no ambiguities. And, where possible, include that payment is dependent on employer discretion. And four, don’t forget about your handbook. Make sure your contract disclaimer is airtight.” — Maxine Neuhauser, Member of the Firm, Epstein Becker Green

Click here for more information: news/new-jersey-enacts-sweeping-wage-theft-law/

Stay tuned for further developments that may affect your business.

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This Employment Law This Week®episode was also featured in “EEOC’s Pay Data Requirement Deadline Looms Despite Court Appeal,”on TLNT, a resource for news, analysis and opinion on the business of HR for human resource and talent management leaders and professionals.