The U.S. Department of Labor (DOL) was extremely busy with its announcements on August 28, 2018. Along with issuing 6 opinion letters, a directive, and launching a new web page (all of which I previously wrote about), it also announced the creation of not one, but two new websites, as well as the new Office of Compliance Initiatives. The new websites, worker.gov and employer.gov provide one location for information for federal worker protections (worker.gov) and information for employers about their responsibilities for federal worker protections (employer.gov).

The employer.gov website provides information regarding pay and benefits; workplace safety and health; small business resources; required posters; nondiscrimination; federal contractor requirements; and veteran and service member employment. It has frequently asked employer questions as well. In theory, the Office of Compliance Initiatives will work to promote greater understanding of federal labor laws and regulations, and will work with enforcement agencies to ensure compliance with the law.

What does that mean for the average employer? I have no idea. It seems to me to be yet another pair of government websites designed to provide consolidated information and links. But as always, nothing is as easy as it seems, and thus, it’s just one more set of data to review. In any event, Minnesota employers should also keep in mind that our laws cannot be ignored and so just because something is allowed under federal law, does not necessarily mean it is under state law. Thus, while this may be handy from a federal perspective, don’t forget about the Minnesota Department of Labor and Industry agency regulations and our Minnesota state wage and hour laws.

For those of you who are federal contractors, and have had the pleasure of being audited by the U.D. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP), you know how close to the vest the OFCCP has historically kept their formulas, pay analysis groupings theories, and statistical modeling theories/backup, making early settlement frustrating if not impossible. Effective August 24, 2018, the DOL issued a new directive, DIR 2018-05, that outlines their procedures for conducting their compliance evaluation (audit) with the priority of eliminating pay discrimination. I am encouraged by this directive, insofar as the OFCCP appears to be taking measures to improve transparency and working more on correcting true pay disparities versus paying a game of “gotcha”.

DIR 2018-05 notably nods to this history, stating that upon review “OFCCP is concerned that contractors lack the clear guidance Directive 307 [2013] intended to give”. The OFCCP hopes the new directive will allow federal contractors to better conduct meaningful self-audits to proactively identify and address any pay disparity issues. I’d bore you all to death if I set forth a summary of the directive, but wanted to at least point out what the directive contains (the link to DIR 2018-15 is above).

The directive explains how it uses statistical and other evidence to evaluate pay practices, as well as data requests via a Scheduling Letter, which is used to request data such as the employers Affirmative Action Program (AAP). The directive further notes how it determines its similarly-situated analysis groupings by developing pay analysis groupings (PAGs) that mirror a contractor’s compensation system (this has been a fight for contractors in the past). Finally, the directive discusses how the OFCCP applies statistical methodology and modeling in a desk audit and during the compliance evaluation, which control variables are used and how, and how it will facilitate transparency, consistency, and resolution through conciliation.

Many laws governing employment contain anti-retaliation prohibitions. Indeed, many claims, demands and lawsuits are accompanied by retaliation allegations. For example, the Minneapolis and St. Paul paid sick leave ordinances both make it unlawful for an employer to take adverse employment actions against an employee for requesting to use earned paid sick leave hours.  The Equal Pay Act similarly disallows retaliation for asserting discrimination under that Act.

On June 12, 2018, in Brazil v. Arkansas Dep’t of Human Servs., the Eighth Circuit dismissed an employee’s retaliation claim, since the employee had changed jobs with the employer after commencing the suit, and was thus, not subjected to the adverse employment action that caused her to sue in the first place. The employee alleged her employer retaliated against her after she had filed a lawsuit against it for violation of her civil rights by subjecting her to manual labor and fewer opportunities for promotion. The employee asked the court to require the employer to transfer her to a “suitable position under the direction of different supervisors.” However, since filing the retaliation claim, the employee had transferred to new division with different supervisors. Thus, the court found the employee had already received what she sought in her lawsuit. Further, the court held that, “a speculative possibility of future harm is not enough to preserve a live case or controversy” necessary for a lawsuit. The lesson here is that an intervening event in a current employee’s employment may aid in cutting off a retaliation claim (similar to re-hiring someone who was wrongfully terminated).

When is the last time you seriously worked on updating your job descriptions…with input from the hiring manager for that job? On May 11, 2018, the Eighth Circuit Court of Appeals (this includes Minnesota), in Faidley v. United Parcel Service of America, Inc., held that the employer, United Parcel Service (UPS), was not required to accommodate an employee’s request to work no more than 8 hours a day, because an essential function of his job position was working overtime. Faidley had been working for UPS roughly 25 years, when a back injury began causing him problems while working shifts longer than 8-hours. Faidley’s doctor issued a permanent work restriction, limiting him to working no more than 8-hours a day. Faidley then requested an accommodation with UPS for his current position (package driver). UPS denied the accommodation request, determining that working overtime was an essential function of the package driver position.

In Faidley, overtime was determined to be an essential function of the employee’s job due to the unpredictable nature of workloads and weather, combined with the adverse effects UPS would suffer if packages were not delivered on time or other drivers had to be sent to finish a person’s delivery because that individual could only work 8 hours. Further, the job description and collective bargaining agreement with the union indicated that working overtime was a requirement for the package driver position. Based on this evidence, the Court agreed that working overtime was an essential function of a package driver, and UPS’s denial of an accommodation was not in violation of the American’s with Disabilities Act.

Thus, when presented with requests to accommodate an employee’s restricted hours due to a disability, keep in mind that you have a much better chance of having it affirmed (if sued) if you have documentation to support your position. The key here is that employers should make sure that this information is explicitly written in the job description and any collective bargaining agreement. Further, employers should be able to articulate objective reasons as to why the overtime is an essential function of the job. In other words, it may be time to dust off your job descriptions and look at them. Make sure they are current (jobs morph over time), and accurately reflect the job duties and essential functions. Be as specific and accurate (and reasonable) as possible. For example: work overtime up to 20 hours per week; lift up to 50 pounds; stand up to 10 hours, etc. The job description must reflect the job to be useful – do not try to be “Minnesota nice” with it and use as a recruiting tool. If 20 hours of overtime is essential, state it. This doesn’t mean you have a lost cause if you don’t specifically have it in there, but it sure will make the defense a lot stronger (and our job a lot easier!).

In Minnesota, it is still lawful to ask job applicants about their pay and benefit history.  However, a number of states and cities are moving toward banning such practice. Thus, Minnesota employers with other locations should be mindful of these changing laws. The idea is that by doing so, the gender and minority job gap will eventually be equalized. As of today, the following locations (that I am aware of) have banned private employers from asking a job applicant about certain compensation history:

  • California. Effective January 1, 2018, per Assembly Bill 168, employers cannot ask salary history information, including compensation and benefits; however, applicants may volunteer the information.  Also note – “An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.”
  • Delaware. Effective December 2017, per House Bill 1, employers cannot seek  compensation (wages and benefits) history from an applicant or former employer, except after an offer has been made, for the sole purpose of confirming the applicant’s compensation history.
  • Massachusetts. Effective July 1, 2018, per S.2119, employers cannot seek the wage or salary history of a prospective employee. Note, this act has a lot more employer restrictions with respect to pay equity.
  • New York City. Effective October 31, 2017, per NYC Law, employers cannot solicit questions about current or prior earnings or benefits, search public records to find that information, or rely on current or prior earnings or benefits to set compensation.
  • Oregon. Effective January 1, 2019, per House Bill 2005, employers cannot screen job applicants based on current or past compensation (wages, salary, bonuses, fringe benefits and equity-based compensation), or determine compensation for a position based on current or past compensation for a prospective employee (except in the case of an internal transfer).
  • Philadelphia. Effective May 23, 2017, Philadelphia Code 9-1131 prohibits employers from relying on an applicant’s salary history when setting salaries.  While the law attempted to make inquiries into wage history unlawful, when challenged, the U.S. District Court for the Eastern District of Pennsylvania ordered that while employers cannot be prohibited from asking an applicant’s wage history, they can still prohibit reliance on salary history.
  • Puerto Rico. Effective March 8, 2018, per Puerto Rico Act No. 16-2017, employers may not ask an applicant or former employer of the current salary or wage history of the applicant.
  • San Francisco. Effective July 1, 2018, per the Consideration of Salary History Ordinance (also known as the Parity in Pay Ordinance), employers cannot consider the current or past salary of an applicant in determining whether to hire an applicant, and at what salary.  In addition, employers must post a salary history poster at the workplace.
  • Vermont. Effective July 1, 2018, per H294, employers cannot inquire or seek information regarding a prospective employee’s current or past compensation.

Keep in mind the above is just a quick overview; if any one of these applies to your business, you should familiarize yourself with the actual applicable law (most linked above). I suspect that the equal pay laws above are the start of a growing trend, and that if no federal law is passed in the next few years, state and local laws will continue. Until then, employers with locations in multiple states need to be sure to keep current on pending legislation and ordinances.

clickAs a result of President Obama’s White House Summit on Worker Voice, on October 28, 2016, the U.S. Department of Labor’s Wage and Hour Blog announced its new beta website – Worker.gov. This website is, according to the DOL, designed to provide “easy-to-access” solutions for employees who need answers “fast”. The DOL admits that “Even the best government websites can be difficult to navigate” – true, true. That being said, it makes it only about 4 clicks for a worker to file a claim electronically.

In short, the website, which is in beta and therefore undergoing constant changes, is designed to provide employees with an easy way to determine whether their rights are being violated, then provides them with a simple click to file a claim against an employer. Partnering with the NLRB, EEOC, and DOJ, the DOL wants the website to provide “critical information” to employees about their rights, who may not know whether they have a “FLSA” or “FMLA” problem, but an “unfairness-on-the job problem”. Employees answer a “few simple questions” and voila! The website will supposedly provide the relevant information, expanding in the weeks and months to come, and “learning” from the workers that use it about what kind of information is being sought – and the site will supposedly begin to feature that information prominently for similar workers.

The beta site provides a drop down, under which five job titles are currently available – day laborer; office worker; nail salon worker; restaurant worker; and construction worker. From there, it takes to you a “Tell Us what happened. We can help.” screen with several options such as – “You have the right to be treated equally.”, “You have the right to engage with others to improve wages and working conditions”, “You have the right to a safe and healthy work environment”, and “You have the right to be paid.”  From there, the employee can chose what happened (i.e. suggestions – all are in the negative – such as “I was not paid for work I performed”) , and then be taken to a “File a Claim” screen.

What does this mean for employers? I have to believe we will see an increase in filed complaints, as that is the whole purpose of the website – to make it easy for employees to complain about unfair work treatment – and provide a simple click to do so.

interview-1018333_1920Minnesota employers with a location in Massachusetts should take note that Massachusetts passed a new Pay Equity Act yesterday, which, among other things, makes it unlawful to ask applicants about their salary history effective January 1, 2018. Specifically, the Pay Equity Act provides:

“(c) It shall be an unlawful practice for an employer to:

(1) require, as a condition of employment, that an employee refrain from inquiring about, discussing or disclosing information about either the employee’s own wages, including benefits or other compensation, or about any other employee’s wages;

(2) screen job applicants based on their wage, including benefits or other compensation or salary histories, including by requiring that an applicant’s prior wages, including benefits or other compensation or salary history satisfy minimum or maximum criteria; or request or require as a condition of being interviewed, or as a condition of continuing to be considered for an offer of employment, that an applicant disclose prior wages or salary history;

(3) seek the salary history of any prospective employee from any current or former employer; provided, however, that a prospective employee may provide written authorization to a prospective employer to confirm prior wages, including benefits or other compensation or salary history only after any offer of employment with compensation has been made to the prospective employee…”

I won’t go much beyond that, as this won’t apply to many Minnesota employers,  but if it does apply to your business, you can find the full text here. I would not be surprised if we see something like this down the pipeline here in Minnesota in the future.

Dollars 2As I wrote about in April, on February 1, 2016, the EEOC proposed revisions to add wage and hour information to employers’ yearly EEO-1 report.  The EEO-1 report is required by the EEOC, pursuant to its authority in Title VII of the Civil Rights Act of 1964 (Title VII), and requests submission of information aimed at detecting discriminatory practices.

The proposed revision is the recommendation of a 2010 Equal Pay Task Force between the EEOC, DOL and President Obama’s National Equal Pay Task Force. The EEO-1 survey is used by the EEOC and the OFCCP (Office of Federal Contract Compliance Programs) to analyze and enforce non-discriminatory employment (such as a contractor who hires no minorities). According to the EEOC, this information will enable it to compute and compare pay between men/women and various races and ethnicity to find potential discriminatory pay practices.

Following the closing of the April 1 comment period, the EEOC has since revised its proposal, as summarized below.  The comment period for the new revisions closes August 15, 2016.

Who Needs To Complete An EEO-1 Report?

The EE0-1 survey must be filled out by all employers subject to Title VII with 100 or more employees (this includes corporate enterprises and/or shared ownership) and federal contractors / first-tier subcontractors subject to Executive Order 11246 (government contract over $10,000) with 50 or more employees and a prime contract or first-tier subcontract of $50,000 or more. Employers with 50-99 employees would not need to report this new additional pay and hours worked data (now called “Component 2” of the EEO-1) , just the current information such as race, gender, etc. (“Component 1”).

The proposal would change effective the 2017 reporting cycle for employers with 100 or more employees – they would need to add the pay and related information by March 31, 2018. Note- this is a 6 month extension from September 2017 (which was originally proposed). Thereafter, the EEO-1 report will be due by March 31st of each subsequent year.  Keep in mind, however, the September 30, 2016 deadline and EEO-1 reporting is unchanged!  According, employers would report September 30, 2016 with the old form, and the next report would be due March 31, 2018, with the new data/form.  A sample of the proposed new EEO-1 report can be found here.

What New Data Must Be Reported?

The proposal would require covered employers to provide data on employees’ W-2 earnings and hours worked based on a calendar year basis ending December 31.  This is a significant (positive) change over the EEOC’s first proposal. Employers would use the W-2 Box 1 income figure used for end-of-year tax reporting.  Thereafter, employers will need to aggregate W-2 data in 12 “pay bands” (pay range, for the rest of us) for 10 different job categories: Executive/Senior Level Officials and Managers; First/Mid-Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; and Service Workers).

As for how to report the “hours worked” component for full-time salaried employees, the EEOC now is recommending that for non-exempt employees, actual hours be reported.  For exempt (salaried) employees, an employer would have the option of: (1) reporting actual hours worked; or (2) report 40 hours per week for full-time employees and 20 hours per week for part-time employees multiplied by the number of weeks the individual is employed during the EEO-1 reporting year.

In short, we hurry up and wait again…

In its June 21, 2016, Compliance Tips, the City of Minneapolis Department of Civil Rights Contract Compliance Division offered some tips for how a contractor can demonstrate good faith efforts at meeting the City’s workforce goals.  Given the recent notice of on-site “reviews” that I blogged about earlier, this is no surprise. Contractors should expect the City will also be auditing compliance with the workforce goals, and should be prepared to make this showing. Here’s what advice the City has to offer:

“The City’s workforce goals are 6% female and 32% minority workers on all city construction projects. A contractor must demonstrate a good faith effort to meet these goals. A good faith effort means that a contractor took reasonable steps to employ female and minority workers and cure existing underutilizations in its workforce through Affirmative Action and Equal Employment Opportunity.

A contractor can demonstrate its workforce good faith efforts in the following ways:

  • Provide documentation that it has alerted its subcontractors, unions, and trade organizations of the City’s workforce goals.
  • Use its current Affirmative Action Plan, or create a new one, to develop a female and minority worker recruitment plan
  • Advertise opportunities for employment in minority and women trade publications and at job and recruitment fairs
  • Be diligent in documenting and communicating any and all efforts to CCD so that we are aware of its efforts and can help it meet its goals and are aware of its efforts.

Contractors must be truthful when submitting utilization percentages to CCD.”

Contractors doing business in Minneapolis should be aware that the City will be conducting on-site “reviews” of the general contractor for City projects. Don’t get fooled that this is a friendly visit just because you are called in advance to schedule a time to meet. This “review” is an audit or investigation or whatever you want to call it. It is the City’s way to determine whether you are in compliance with your contract. A violation is a violation. Be sure you have the proper postings, records, and are paying the appropriate prevailing wages. Keep in mind that just because the City’s contractor compliance officers are knocking politely, doesn’t mean they don’t communicate with MnOSHA and other agencies.  Be sure your job site is in compliance with not only City regulations and ordinances, but state and federal as well. Here is the notice that I received from the City on June 21, 2016:

“Contract Compliance Officers (CCOs) will be conducting onsite reviews on construction projects. Developers and Contractors can expect that a CCO will schedule the onsite with the general contractor in advance. During the review, the CCO will tour the job trailer and job site looking for relevant postings (i.e. wage decision and City’s Non-Discrimination Notice).  Then the CCO will interview employees and subcontractors. Specifically, the CCO will be reviewing whether:

  • Women and minority businesses are providing a commercially useful function.
  • Female and minority workers are being utilized and are not experiencing any discriminatory treatment.
  • Employees are being paid prevailing wage
  • Apprentices working on site are utilized within ratio and paid according to their pay scale.

The review will vary in length depending on the size of the project and number of employees interviewed. Afterward, the CCO will produce and share an onsite report with the project contacts.  Then the CCO will work with the general contractor and/or developer to remedy any noncompliance issues. Any questions regarding upcoming onsites can be directed to the CCO assigned to the project or via email at contractcompliance@minneapolismn.gov.”

Note, even the City has acknowledged that you may be found in noncompliance as a result of the “review” – and if that is the case, you will need to “remedy” the “issue”.  This is simply a workplace investigation without a complaint, in order to determine whether you are in compliance with the terms of the contract with the City.  Contractors are highly encouraged to review your practices now and get into compliance if you are not already!