James Grasso Discusses Pay Equity Laws

Equal grounds: Employers must do more to promote workplace pay equity

SPECIAL REPORT: LABOR & EMPLOYMENT

Attorney Julie Bastian worked as in-house counsel in the staffing industry for a large part of her career before taking a job over the summer at Horton Law PLLC in Orchard Park.

“Representing clients is a little bit different, but I have a good perspective on it,” she said.

In her new role, she advises clients who are employers on legal requirements and more, such as what they must do to comply with federal and state equal-pay requirements.

“New York has some amendments (this past year pertaining to) gender equality to make sure that employers are treating women as equal as men,” she said. “They also added all of the protected classes to pay requirements rather than protecting just gender.”

That equal-pay requirement took effect Oct. 8. Protected classes include age, disability, gender (and gender identity), marital status, national origin, race, religion and sexual orientation.

Salary history

Another big change becomes official Jan. 6. Employers can no longer request a job applicant’s salary history or retaliate against them if they choose not to share that information.

“Employers need to change their interview process,” said James Grasso, partner at Phillips Lytle LLP.

Applicants may still voluntarily provide the information, however. Grasso said many employers have already removed salary history inquiries from their hiring and onboarding practices, even those who use online systems for job-seekers to submit resumes.

A work-around for employers can be to ask what an applicant’s salary expectations may be, said Rosemary Enright, partner at Barclay Damon LLP.

“It’s all right to say what you are looking for. That’s permissible,” she said. “It’s just (that) you can’t ask what they made in the past.”

By knowing one’s expectations, companies can use that number as a baseline or jumping-off point in negotiations, Enright added.

“You have to start somewhere and it’s hard to know (what someone may be looking for as compensation),” she said.

Federal pay reporting

Following years of political uncertainty, private employers with 100 or more people on staff must comply for at least a short time with pay reporting requirements issued by the U.S. Equal Employment Opportunity Commission.

Qualifying employers must collect and submit compensation data for the specified window via an EEOC form, according to Bastian and Mary Aldridge, associate at Bond Schoeneck & King PLLC.

“Employers had until Sept. 30 to go ahead and present that data not only for 2017 but for 2018, as well, that breaks down additional compensation.” Bastian said. “Not only (did) we have to (submit data regarding) gender and all of the different categories, but now you (had) to (break down data) further into those categories.”

What companies had to submit was essentially an enhanced version of what they annually must compile, Aldridge said.

“It’s a little bit more of a burden on employers because it’s more information they have to gather about their own workforce,” she said. “There’s a sample form to help employers provide that data. … This is information that hasn’t previously been reported and I think this report could provide a better picture (of any nationwide pay disparity). … It could be a risk to employers if their pay-equity statistics are not looking good.”

Grasso said one reason companies pushed back on pay reporting was because they feared it would reveal an existing disparity between men and women that many already suspect. As a result, he said the EEOC will get a snapshot of how that looks from a short period, which in turn will provide fodder for disparity lawsuits.

Enright said that even through it’s past deadline, the EEOC will accept data submissions from employers.

“They’ll (still) happily take it,” she said.

Increased litigation

With the legal changes, attorneys such as Kinsey O’Brien, senior associate at Hodgson Russ LLP, said there may be an increase in equal-pay claims.

“Employers should know that the most common defense to an equal-pay claim remains available even in spite of the changes in the law,” she said. “That defense is that the pay differential is based on legitimate, non-discriminatory reasons such as seniority, merit or other bona fide factors such as education, experience and training.”

By law, workers are still permitted to be paid differently based on those factors, O’Brien said.

Disparities can also still exist if pay is based on a system that measures earnings quality of production or quantity, such as for someone who works in sales, the law says.

Still, employers may find themselves handcuffed in the “bona fide factor” defense.

“(That) factor justifying the pay differential will need to be job-related and consistent with business necessity,” O’Brien said. “Further, a claimant can overcome the defense if he or she can show that the employer’s practices have a disproportionately adverse impact on workers in a particular protected classification.

“This limiting of the defense, coupled with the other changes, may make it easier for claimants to prevail on equal-pay claims.”

In the meantime and before suits come to light, Grasso suggested employers take a look at what they’re doing in terms of pay equity.

“We like to say always be proactive,” he said. “Given the heightened exposure to these suits, we recommend employers take an audit of their pay practices.”