Technology has always had a significant impact on the way companies do business. With the increasing use of artificial intelligence (“A.I.”), no task is exempt from a robotic upgrade. In fact, a growing number of companies are utilizing A.I. to screen potential employees through, among other processes, the video interview. As the New Year approaches, it is important that Illinois employers familiarize themselves with changes in the law surrounding A.I. in hiring. Specifically, beginning January 1, 2020, employers using A.I. to screen applicant video interviews for Illinois-based employment will be subject to the Artificial Intelligence Video Interview Act (the “Act”).

But What Is A.I. Video Interview Screening?

 Most A.I. screening of video interviews involves applicants recording themselves answering a series of interview questions. Like HAL, the conflicted computer in 2001: A Space Odyssey, more sophisticated A.I. even has the ability to simulate “natural” human conversation with which interviewees interact. The video interview is then analyzed using “deep learning,” which is essentially an algorithm that evaluates several data points such as facial expressions, word choice, body language, vocal tone, etc. By the end of the analysis, the A.I. generates an applicant score based on the collected data points and, in some instances, provides a recommendation on whether the applicant is a good fit for the position sought.

So How Does The Act Regulate A.I. Video Interview Screening?

Here is what we know about the Act signed into law by Governor J.B. Pritzker (D) on August 8, 2019:

Requirements:

• Employers must
  

When one employer purchases the assets of another and intends to employ some or all of the seller’s employees, it is very common for the asset purchase agreement to require the seller to disclose certain personnel information regarding those employees.  Often this disclosure includes such items as name, title, hire date, current salary, and other compensation and benefit information.  However, such provisions may violate state and local bans on salary history inquiries.

To date, fourteen states and Puerto Rico have prohibited or restricted private sector employers from seeking information about a prospective employee’s past compensation.  In some of those states, employers are permitted to ask about compensation history only at a certain point in the hiring process.  But in most, employers are never allowed to seek this information.  Many local governments have also enacted their own bans.

Colorado’s new statute is typical.  Effective January 1, 2021, it will be unlawful for employers to “seek the wage rate history of a prospective employee or rely on the wage rate history of a prospective employee to determine a wage rate.”  The statute defines “wage rate” broadly to mean (a) for hourly employees, the hourly rate plus the value per hour of all other compensation and benefits received, and (b) for salaried employees, the total of all compensation and benefits received.  Given the remedial purpose of the statute – to eliminate pay gaps based on gender and race – it is likely that courts will construe the statute broadly in favor of employees

The DOJ has indicated that it intends to prosecute companies that have entered into no-poaching agreements, an activity that has previously only been subject to civil enforcement. No-poaching agreements are arrangements between companies to not solicit or hire each other’s employees. Companies engaged in this conduct do not have to compete for customers to be susceptible to government scrutiny; they only need to compete for the same employees.

Our Antitrust practice group has recently written a client alert on this topic. Click here to read the full alert.

On February 1, 2018, Kansas City, Missouri joined the ranks of more than 150 cities and counties to enact a “ban the box” ordinance, aimed at equalizing the chances to gain employment by those previously convicted of a crime.  Effective June 9, 2018, the ordinance expands Kansas City’s 2013 ordinance that applied only to city employees.  The new ordinance, “Criminal Records in Employment,” found at Section 38-104, applies to most employers employing six or more in Kansas City.  It excludes employers that are prohibited by a local, state, or federal law or regulation from considering applicants with a criminal record.

Under the ordinance, employers are banned from inquiring into an applicant’s criminal history until after the applicant has been interviewed, i.e., employers can no longer ask about criminal convictions on an employment application.  Criminal history is defined in the ordinance to include felony and misdemeanor convictions, guilty and no contest pleas, and records of arrest.  After an applicant is interviewed and considered qualified for the position, but before an offer is extended, an employer may ask about his or her criminal history.  However, the ordinance prohibits an employer from basing a hiring decision on this factor alone.

The Kansas City, Missouri Human Relations Department (the “Department”) will enforce the ordinance.  If the Department finds a violation occurred and conciliation is not reached, the Department can prosecute the employer in municipal court.  Penalties for violating the ordinance include a loss of business license for up to 30 days on the first

The formation of a new government in Germany has not yet been completed however since February 7, 2018, the coalition agreement has been signed. Such political guidelines were consistently implemented during the last legislative periods.

The changes affect fixed-term contracts which require no objective grounds for limitation. The maximum permissible duration of such fixed-term contracts will be reduced from 24 to 18 months. While previously a three-time extension of these contracts was allowed, this should now be possible only once within those 18 months.

The permitted number of such fixed-term employment contracts will also be limited. Employers with more than 75 employees should only be allowed a maximum of 2.5 percent of the workforce for non-material fixed-term contracts. Exceeding the quota leads to the ineffectiveness of any further fixed-term employment contract, and to permanent employment contracts.

Fixed-term contracts with objective grounds for limitation, in practice used if the employee has been previously employed or the maximum duration of fixed-term employment contracts as per above has expired, are also affected by the new regulations. If the employee previously had an indefinite, or one or more fixed-term employment contracts with a total duration of five years or more with the same employer, a renewed time limit is prohibited – even if there are recognized objective grounds for the limitation. An important point to note is: The maximum period of five years, also includes periods during which the employee was lent to the employer by other companies.

The announced changes to the law

Internships are often a great way for students and young people to get their foot in the door and land their first job. But employers must ask themselves: is your unpaid intern actually an intern, or is the “intern” really an employee entitled to wages? Last week, the Department of Labor (“DOL”) aimed to provide clarity and flexibility when it revised its guidance for determining whether an unpaid intern is an “employee” who must be paid under the federal Fair Labor Standards Act (“FLSA”).

Unpaid internships have been the focus of some legal uncertainty over the past several years. The source of that uncertainty may be the FLSA’s simplistic definition of “employee” as “an individual employed by an employer.” The Supreme Court has yet to fully address the difference between unpaid interns and paid employees, but in 1947, the Court recognized that unpaid trainees should not be treated as employees for purposes of the FLSA. In Walling v. Portland Terminal Co., 330 U.S. 148 (1947), the Court relied on several factors in determining that certain railroad trainees were not “employees,” including that the trainees did not displace any regular employees, their work did not expedite the employer’s business, they did not expect to receive any compensation, and they would not necessarily be hired after completing training.

Despite the obvious changes in the workforce since 1947, the DOL and federal courts have continued to rely on the reasoning in Portland Terminal ever since. For example, in 2010, under the Obama

Beginning October 31, 2017, employers in New York City will be prohibited from asking job applicants about their previous salary. The legislation is aimed at breaking the cycle of wage inequality affecting women and people of color by requiring employers to base compensation on the applicant’s qualifications, not previous salary.

Which businesses are covered by the law?

Any employer which employs at least one employee in New York City is covered.

What type of job applicants are protected by the law?

All new hires, regardless of whether they are applying for full-time, part-time, or internship positions are covered.  The law does not apply to an employer’s current employees applying for an internal transfer or promotion in the same company.

What is the employer banned from doing?

No Inquiry: Employers may not ask candidates about their salary history (previous salary, benefits, and other types of compensation) at any time in the hiring process.  Employers also may not search for this information on publicly available records nor obtain it from former employers.

No Reliance: Employers cannot rely on the salary history of the applicant at any stage in the employment process, including negotiating the contract.

What is the employer permitted to discuss?

Employers are still permitted to:

• Ask about objective measures of the applicant’s productivity (e.g. revenue, sales, profits generated, etc.);
• Ask what the applicant’s compensation expectations are for the position;
• Discuss any unvested or deferred compensation that the applicant would forfeit by resigning from his or her current job;
  

Recently, on October 14, 2017, Governor Jerry Brown signed Assembly Bill 1008 (“AB 1008”), which adds Government Code Section 12952 into state law.  Among other things, this new provision makes it an unlawful employment practice under the Fair Employment and Housing Act (“FEHA”) for a private employer with five (5) or more employees to inquire about or consider a job applicant’s conviction history prior to a conditional offer of employment.  This “ban-the-box” legislation is the latest in a series of initiatives nationwide to ban private employers from inquiring about convictions on an application for employment.   California joins five other states, including Connecticut, Illinois, New Jersey, Oregon, and Vermont, in banning private employers’ inquiries regarding convictions prior to a conditional offer of employment.  AB 1008 becomes effective January 1, 2018.

Only Post-Offer Consideration of a Conviction or Specified Arrests is Permissible.  Most dramatically, employers may not ask an applicant about any conviction on an application for employment, or during any other phase of screening prior to an offer.  Further, while an employer can still perform a criminal background check after an offer of employment is made, employers are required to conduct an “individualized assessment” of whether the applicant’s conviction has a “direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.”  The employer must consider the factors that the U.S. Equal Employment Opportunity Commission laid out in its own guidance in 2012 regarding the use of convictions, specifically:

(1) the nature and gravity

Many employers base an employee’s pay on his or her past salary.  Applicants are typically asked, either on the application or during an interview, how much they made in their previous job(s).  Critics of this practice believe using salary history to set current salary is discriminatory and prohibits women and minorities, frequently paid less than their white male counterparts, from overcoming pay disparity.

In April 2017, in Rizo v. Yovino, the 9th Circuit Court of Appeals held that salary history is a valid justification for paying a female employee less than her male counterpart, so long as the employer’s use of the salary history was reasonable and accomplished a business purpose.  Several states and municipalities, perhaps in response to Rizo, have enacted and/or proposed legislation prohibiting the practice of asking applicants about their salary history.  Other states and municipalities previously banned this practice.

In June 2017, both Delaware and Oregon passed statutes prohibiting an employer from asking an applicant his or her past salary, either on the application or during the interview.  They join Massachusetts, New York City, San Francisco, and Puerto Rico, with similar bans.  California, Mississippi, Pennsylvania, and New Jersey have also proposed similar bans.  Philadelphia passed a pay history ban, which its Chamber of Commerce sought to enjoin on the grounds that the ban would cause employers to struggle to establish wages and attract top talent.  The Eastern District of Pennsylvania dismissed the Chamber’s injunction for lack of standing.

As the equal pay debate continues, the states

Part One of this series focused on several of the federal and local filings and registrations that new employers will need to make in preparation for their first hires. In Part Two, we dove into drafting job descriptions and their use in determining whether a position should be classified as exempt or non-exempt under federal and local wage and hour laws. In Part Three, the final post in this three-part series, we’re examining the specifics involved in extending an employment offer. Whether it’s your first time or your twenty-first time, making a job offer is exciting−you’ve finally found your ideal candidate and are looking forward to a bright future together!  But the start of the employment relationship also starts the clock on a number of employer obligations and opportunities.

For example, certain states require employers to provide their employees with written notice of certain job-specific information at the time of hire.  This information can include notice of the employee’s rate of compensation (both regular and overtime, where appropriate), notice of the employer’s proper legal name, notice of the appropriate pay days, and notice of any commission plans in which the employee may participate.  Most of these notice obligations are typically codified in the appropriate state Wage Theft Prevention Act.

Additionally, in most states the signing of a covenant not to compete at the inception of the employment relationship will provide sufficient consideration to support such an agreement.  In contrast, in many states, continued employment (i.e. signing such a