California was one of the leading states to tackle pay discrimination by banning inquiries into salary history. California Labor Code Section 432.2, which went into effect on January 1, 2018, prohibits public and private employers from seeking or relying upon the salary history of applicants for employment. But some of the law’s terms were undefined and some of the provisions were unclear, so after Section 432.2 went into effect, employers had questions about how to remain compliant with the law when hiring new employees.
The new year brings new laws for California employers to grapple with. Below we highlight the most significant new employment laws affecting California employers as of January 1, 2018. Companies based in California or with operations in California are encouraged to review their policies and procedures in light of these developments.
Equal pay issues continue to be a focus for new state legislation and of the private plaintiff’s bar. Partner Emily Burkhardt Vicente and Counsel Christy Kiely discuss how employers can best position themselves to defend against claims of compensation discrimination. View the 5-minute video here.
Gender Pay Transparency Act Vetoed. On Sunday, October 15, California Governor Jerry Brown vetoed the California Gender Pay Gap Transparency Act, AB 1209, a proposed law that would have required (1) large employers in California to collect and disclose data on how they’re paying men and women differently, and (2) the California Secretary of State to publicly post the data on a state government website. The proposal – previously deemed a “job killer” by the California Chamber of Commerce, and characterized as the “public shaming of California employers” bill by many – was strongly opposed by the business community. The Governor expressed concern about the proposal’s ambiguous language and expressed concern that the ambiguity “could be exploited to encourage more litigation than pay equity.” Continue Reading California Governor Vetoes and Approves Pay Equity Bills
One month into 2017 and new pay equity laws already are springing up. Philadelphia is now the first city to prohibit employers from using pay history information in making employment decisions. New York Governor Andrew Cuomo has issued executive orders mandating that: (1) agreements entered into by the state require contractors to report their employees’ pay information; and (2) state agencies can no longer use candidates’ current or prior pay in making employment decisions. Likewise, the Mayor of New Orleans has now issued an executive order prohibiting city departments from asking job applicants about salary history and requesting a study of pay disparity among city employees.
In response to a presidential memorandum directing the Department of Labor (“DOL”) to collect summary compensation data from federal contractors and subcontractors to combat pay discrimination, the DOL’s Office of Federal Contract Compliance Programs (“OFCCP”) recently proposed a rule calling on certain federal contractors to submit reports on employee compensation. The rule, published in the Federal Register on August 8, requires covered contractors to annually submit an “Equal Pay Report.” Covered federal contractors and subcontractors are those who:
- File EEO-1 reports;
- Have more than 100 employees; and
- Hold federal contracts or subcontracts worth $50,000 or more for at least 30 days.
On April 8, 2014, in recognition of National Equal Pay Day, President Obama continued to advance his wage equality agenda by focusing on wage transparency through Executive Order on Non-Retaliation for Disclosure of Compensation Information (“Executive Order”) and a Presidential Memorandum entitled “Advancing Pay Equality Through Compensation Data Collection” (“Presidential Memorandum”).