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Holiday pay; non-party access to court documents

September 20, 2019

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Our September update considers recent key developments in UK employment law, including a case on calculating holiday pay for irregular workers and a Supreme Court decision on non-party access to court documents. We also outline other points of note, including developments relating to non-disclosure agreements and gender pay gap reporting.

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Preparation and Training Critical as Illinois Employers Face New Legal Landscape

Illinois employers must begin preparing now for the host of new legal requirements impacting the workplace beginning in 2020.  With legal changes on topics ranging from hiring practices and pay equity to drug testing and severance agreements, employers should not only review and revise their policies, practices and expectations, but also ensure that their Human Resources and management personnel receive training to ensure compliance.

Amendments to the Illinois Human Rights Act (“IHRA”)

Under new amendments to the IHRA, more employers are now subject to the IHRA, more protections are now provided to employees (and others), sexual harassment training is now a requirement, and employers now have reporting obligations to the Illinois Department of Human Rights (“IDHR”) regarding adverse judgments, administrative rulings, and settlements.  Specifically:

  • Beginning July 1, 2020, rather than applying only to employers with 15 or more employees, the IHRA applies to all employers with one or more employees in Illinois during 20 or more calendar weeks. Newly covered employers should ensure that HR personnel and managers are aware of the areas in which the IHRA is broader than federal anti-discrimination laws, including but not limited to: (1) pregnancy accommodation requirements; (2) prohibition of discrimination based on sexual orientation, gender identity, military status, marital status, and order-of-protection status; and (3) the potential for individual liability of harassers.
  • Beginning January 1, 2020, the scope of protection provided by the IHRA will expand. HR personnel and managers must be aware of the new protections so that they appropriately recognize and respond to concerns. 

Colorado Employers Face New Employment Laws

With Colorado’s return to one-party control, Colorado employers face a spate of new employment laws. Employers in Colorado should review their practices, policies, and procedures to ensure that they are in compliance with these new laws.

Colorado Chance to Compete Act—“Ban the Box” Legislation: Under the new law, an employer may not state in an advertisement or application that a person with a criminal history may not apply to the position. The employer also may not inquire about or require the disclosure of an applicant’s criminal history in an initial application. The law takes effect on September 1, 2019, for employers with 11 or more employees, and September 1, 2021 for employers with fewer than 11 employees.

Equal Pay for Equal Work Act: The law prohibits an employer from discriminating between employees on the basis of sex by paying an employee of one sex a wage rate less than the rate paid to an employee of a different sex for substantially similar work, regardless of job title. The law also prohibits an employer from seeking or relying on a prospective employee’s wage rate history to determine a wage rate. Finally, employers may not prohibit employees from discussing their wage rates. The law takes effect January 1, 2021.

Criminal Penalties for Wage Violations:  Employers who willfully refuse to pay a wage claim or falsely deny the validity of a wage claim over $2,000 may be liable for felony theft. The penalty for theft ranges from $50 to $1,000,000 depending upon the

French Gender Equality Index

In order to fight against gender inequalities at work, French law no. 2018-771 adopted on 5 September 2018 introduces an obligation for employers to achieve the principle of equal remuneration between women and men (as opposed to a best efforts obligation). To do so, companies with 50+ employees will be required to calculate an “equal pay index”, based on gender equality indicators. They must then publish their results on their website and remedy inequalities in the event of insufficient results. They must also disclose the result to their personnel representatives and to the French labor authorities.

The gender equality indicators that must be taken into account are:

– the gender pay gap, calculated according to the average pay of women as compared to men, by age group and equivalent job category;

– the difference in the rate of individual salary increases between women and men;

– the percentage of employees who were granted an increase in the year following their return from maternity leave, if increases were granted during the period during which the leave was taken;

– the number of employees of the under-represented sex among the ten employees with the highest remuneration.

In addition, companies that have 250+ employees must take into account a fifth indicator: the gap in promotion rates between women and men.

Points will be granted for each indicator depending on the results achieved. The results are then aggregated in order to obtain an overall result ranging from 0 to 100 points. French Decree n°

Pay Equity Shareholder Proposals

Scrutiny of the gender pay gap in the U.S. and abroad has intensified in recent years and shows no sign of diminishing in the short term.

In the U.K., both private and public sector employers with at least 250 employees are now required to publish gender pay data. This is an annual obligation to publish details including the organization’s overall gender pay gap, the percentages of male and female employees across four quartiles and the gender pay gap in relation to bonuses. The deadline for the first reports was April 4, 2018, for private sector employers and March 30, 2018, for public sector employers.

Meanwhile, in the U.S., the Equal Employment Opportunity Commission continues to identify pay discrimination enforcement actions among its strategic priorities, and a number of states (e.g., California, Delaware, Oregon, etc.) have recently enacted more stringent laws aimed at achieving pay equality in the workplace.  Alongside these legislative and enforcement efforts to curb pay discrimination, activist shareholder firms have begun pressuring public companies in the U.S. to address the gender pay gap by making shareholder proposals that, if passed, would require targeted companies to disclose pay information describing their female employees’ pay as a percentile of male employees’ compensation.

Activist firms, such as Arjuna Capital and Trillium Asset Management, have targeted numerous companies with shareholder proposals that would require disclosure of gender pay data in annual 14-A proxy statements. Overwhelmingly, these proposals have either failed (by a significant margin) or, increasingly, have been withdrawn before a formal

OFCCP Issues New Compensation Directive

The OFCCP’s recent Directive, issued on August 24, 2018, signals a move towards greater transparency in the compensation review process for contractors.  With this new Directive, the OFCCP has rescinded former Obama-era guidance on compensation review, for a more open and transparent process.  The OFCCP sent out 750 corporate scheduling announcement letters to contractors on September 7, 2018, so compliance reviews may be imminent for a number of employers.

Highlights

Pay Analysis Groupings

The Directive sets out the OFCCP’s procedures for grouping similarly-situated employees for statistical compensation analysis.  The OFCCP explains that it analyzes compensation for similarly-situated employees by:

  • developing pay analysis groupings (PAGs); and
  • statistically controlling for further structural differences within the PAGs and individual employee characteristics, such as tenure, prior experience, education and grade level.

In a significant change, the OFCCP will use the contractor’s compensation hierarchy and job structure to run its analysis, provided that:

  • the structure is reasonable,
  • the OFCCP can verify the structure as reflected in the contractor’s compensation policies, and
  • the groupings are of sufficient size to conduct a meaningful statistical analysis.

If the contractor does not provide information about its compensation system, the OFCCP will as a default use either EEO-1 or AAP job groups.  The OFCCP will “control further for sub-job groupings, functions, units, or titles,” as well as “tenure, full-time status” and other factors as appropriate.

Statistical Methodology and Modeling

The Directive provides an overview of the OFCCP’s methodology for statistical analysis of compensation data during the

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