Equal Pay for Equal Work: Updates to Washington’s Equal Pay Act
Presented By: Presented By: Kathleen Kline Thomas Vogliano (206) 247-7014 (206) 247-7013 [email protected] [email protected]
fisherphillips.com Overview of Presentation
• Legal context . Federal and other state EPAs, anti-discrimination statutes • WA Equal Pay Act . Key language, defenses, remedies • Steps for employers . Revise policies, training, privileged pay audit
fisherphillips.com 2 Existing Protections Under Federal Law
• The Equal Pay Act of 1963 • Men and women must be given “equal pay for equal work in the same establishment” • Jobs must be “substantially equal” in terms of skill effort, responsibility, working conditions, and location. • Strict liability (no need to prove intent) • Affirmative defenses: . Seniority, . Merit, . Quantity or quality of production, or . Any factor other than sex
fisherphillips.com 3 Pay Equity: State and Local Laws
Gender Specific
Gender/Other Prot.
Salary History Inquiry Ban
fisherphillips.com Interactive Map at: https://www.fisherphillips.com/equity Washington Pay Equity
.State Equal Pay Act is updated and expanded . HB 1506 . Effective June 7, 2018 . Expands federal EPA protections .Washington Law Against Discrimination . Unfair employment practice to discriminate in compensation, promotions, or other terms and conditions of employment because of sex
fisherphillips.com 5 Washington Pay Equity – Key Language
Prohibits discrimination in any way in providing compensation based on gender between similarly employed employees of the employer.
Prohibits an employer from limiting or depriving an employee, on the basis of gender, of career advancement opportunities that would otherwise be available. **No showing of intent is required
fisherphillips.com 6 What’s included in compensation?
• “Discretionary and nondiscretionary wages and benefits” • Likely this will be viewed broadly, similar to the federal Equal Pay Act to include all forms of remuneration . Commissions . Bonuses . Profit sharing . Deferred compensation . Paid time off . Expense accounts . Car and gas allowances . Retirement plans . Insurance . Other benefits
fisherphillips.com 7 What does similarly employed mean?
. Who is considered “similarly employed” will be based on the skill, effort, and responsibility for the position . Not restricted to job titles or official job descriptions . What matters is what work the employee actually performs . Minor or occasional differences in responsibilities will not prevent certain jobs from being comparable . Skill: experience, training, education, ability to perform the job . Effort: amount of physical or mental exertion needed to perform a job
fisherphillips.com 8 What does similarly employed mean?
. Responsibility: degree of discretion or accountability involved, duties regularly required to perform, amount of supervision received, whether employee supervises others, degree employee is involved in decision making . Comparing wage rates for employees in all of the employer’s operations or facilities . Not limited to employees who work within a specific geographic area or region
fisherphillips.com 9 What are career advancement opportunities? • Requirement that employer “shall not limit or deprive” employees from “career advancement opportunities” on the basis of gender. • Statute does not define this phrase but includes two examples: . Failing to announce or provide access to career advancement opportunities . Failing to provide training that is under the employer’s control
fisherphillips.com 10 What are lawful justifications for pay disparities?
. Based in good faith on bona fide factors that are: . (i) consistent with business necessity; . (ii) not based on or derived from a gender-based differential; and . (iii) account for the entire differential • More than one factor may account for the differential
fisherphillips.com 11 What are lawful justifications for pay disparities? • Examples of “bona fide factors”: Education, training, or experience; A seniority system; A merit system; A system that measures earnings by quantity or quality of production; A bona fide regional difference in compensation levels. A differential in compensation based in good faith on a local government ordinance providing for a minimum wage different from state law **Justifications for disparities in career advancement opportunities are the same except that defenses based on regional compensation differences or minimum wage ordinance do not apply
fisherphillips.com 12 Can salary history justify a current pay disparity? No! . Under the WA statute, an individual’s previous wage or salary history is not a valid defense for disparity in pay • Laws in other states barring employers from inquiring into salary history • Recent case trends
fisherphillips.com 13 Can salary history justify a current pay disparity? (Federal Equal Pay Act) Rizo v. Yovino, No. 16-15372, en banc, (9th Cir. 4/9/18) • The federal Equal Pay Act provides that an employer can justify a difference in compensation if it can prove it relied on: (i) a seniority system, (ii) a merit system, (iii)a system that measures earnings by quantity or quality of production, or (iv)a differential based on any factor other than sex. • Rizo analyzed the last “catch-all” factor
fisherphillips.com 14 Can salary history justify a current pay disparity? (Federal Equal Pay Act) • Rizo (math consultant) was paid less than her male counterparts • County’s salary setting process relied on employee’s prior salary history . County added 5% to the employee’s previous salary, and then place individual on corresponding salary scale . Held: employers cannot rely on prior salary history to justify a wage differential under the EPA • The “any factor other than sex” affirmative defense must be “limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance.” fisherphillips.com 15 Can employers restrict discussions about wages? No! • Cannot retaliate against an employee for: . Inquiring about, disclosing, comparing, or otherwise discussing the employee’s wages or the wages of another employee; . Asking the employer to provide a reason for the employee’s wages or lack of opportunity for advancement; or . Aiding or encouraging another employee to exercise the employee’s rights • Cannot require nondisclosure of wages as condition of employment
fisherphillips.com 16 What are the remedies available to employees?
• Administrative and judicial enforcement Complaint with Department of Labor & Industries Citation and fine Actual damages Statutory damages = greater of actual damages or $5,000 Interest of 1%/month on all compensation owed Costs of the L&I investigation Civil penalty (for each affected employee) Up to $500 for first violation; $1,000 for repeat violation Any other appropriate relief
fisherphillips.com 17 What are the remedies available to employees?
• Private right of action Actual damages Statutory damages = greater of actual damages or $5,000 Interest of 1%/month on all compensation owed Costs and reasonable attorneys' fees Reinstatement and injunctive relief Any wages and interest owed are calculated from four years before the civil action was instituted
fisherphillips.com 18 What about litigation?
• Avalanche of litigation in the area of pay equity under federal and state laws • High profile lawsuits against technology companies, law firms, pharmaceutical companies, and retail chains • Potential for collective and class actions • Multi-million dollar settlements • #TimesUp movement suggests more on the horizon
fisherphillips.com 19 What steps should employers take?
Review documents and conduct training . Update applications and hiring documents to eliminate questions seeking salary history information – okay to ask for salary expectations . Update handbooks, policies, and hiring documents to eliminate any prohibitions against employees discussing pay and confidentiality provisions aimed at compensation . Train employees and recruiters involved in the hiring process about prohibitions against seeking salary history and the changing pay equity laws more broadly
fisherphillips.com 20 What steps should employers take?
Correct systemic problems . Consider implementing standard pay ranges or guidelines for each position or classification . Create or update job descriptions . Review or create compensation policies and procedures – including checks and balances – and train managers on implementation . Communicate with employees about pay increases and their eligibility
fisherphillips.com 21 What steps should employers take?
Correct systemic problems . Assess the performance evaluation process and its role in pay decisions – standardize the process . Train decision-makers: . How to make proper pay decisions that comply with organizational policies and the applicable law . Appropriate factors to consider when making pay decisions . How to apply guidelines and exercise discretion properly . How to document the bases for decisions . Consider conducting a privileged pay audit
fisherphillips.com 22 Goals of a Pay Audit
. Identify potential pay disparities among employees performing comparable work . Determine whether there are lawful explanations for those disparities and/or take steps to correct the disparities as appropriate . Identify and correct weaknesses in the organization’s systems to protect against claims of pay disparity going forward . Take advantage of the affirmative defenses
fisherphillips.com 23 Anatomy of a Pay Audit
Step 1: Gather Relevant Data . Name/employee ID . Supervisor . Protected categories . Performance ratings . Primary work location . Highest level of education . Work type (full-time, part-time, temporary, . Special licences, certifications, etc. etc.) . Pay type (salary, hourly, etc.) . Exempt/non-exempt status . Annualized salary or hourly rate . Date(s) of hire . Shift differential . Job title . Bonus eligibility . Job code/grade/band . Date in most recent job code/grade/band . Eligible benefit plans/programs . Division/department/business unit . Bonus paid . Job function/family . Hours worked/type (regular, OT, etc.) . Total compensation
fisherphillips.com 24 Anatomy of a Pay Audit
Step 2: Identify comparable jobs Step 3: Calculate whether members of a protected class are paid equally as those outside of the protected class Step 4: Assess whether differences in pay are justified under the law Step 5: Remediate any unjustified pay differentials
fisherphillips.com 25 Anatomy of a Pay Audit
Step 6: Adjust pay practices . Attempt to determine the reason(s) for unjustified disparities . Remedy practices and policies causing unjustified disparities . Remove salary history questions from hiring documents . Update policies and other employment documents to remove restrictions on discussing wages . Train hiring personnel and those making compensation decisions
fisherphillips.com 26 Additional Resources
https://www.fisherphillips.com/services-pay-equity
https://www.fisherphillips.com/pay-equity-blog/ https://www.fisherphillips.com/equity
fisherphillips.com 27 Questions?
fisherphillips.com Thank you!
Presented By: Presented By: Kathleen Kline Thomas Vogliano (206) 247-7014 (206) 247-7013 [email protected] [email protected]
www.fisherphillips.com/services-pay-equity
fisherphillips.com