In This Issue
- COVID-19 Resources for Employers
- Important Update: I-9 Compliance Flexibility Expires August 31, 2021
- EEOC Issues New Guidance on Sexual Orientation and Gender Identity Discrimination
- Emerging Trend in State Pay Transparency Laws
- The Immigration Civil War: Differences Between the States on E-Verify and Worker Protection
- As Colorado and Virginia Follow California’s Lead in Enacting Data Privacy Laws, Employers Must Start Planning to Address an Inevitable Trend
- Did Your Business Pay Break Premiums AND Bonuses? California Has A Penalty For That, Too
COVID-19 Resources for Employers
Many businesses have resumed operations and continue facing big challenges as the legislation surrounding COVID-19 continues to evolve. AlphaStaff remains dedicated to providing you with timely information and expert advice to navigate this tumultuous time. Please see the resources below provided by some of our trusted legal partners to help you navigate the novel employment-related issues you encounter in your operations.
- Same Old Situation for Employers? Top 10 Takeaways as OSHA Updates COVID-19 Workplace Guidance
- Mandatory Vaccines or Mandatory Testing? A “Soft Approach”
- Can You Ask Applicants About Their Vaccine Status? 3 Options for Employers
- Health Plan Premium Surcharges For Those Not Vaccinated for COVID-19?
- Mask On? Mask Off? Mask On? What Employers Need to Know About The New CDC Guidance
Important Update: I-9 Compliance Flexibility Expires August 31, 2021
On May 26, 2021, U.S. Immigration and Customs Enforcement (ICE) announced an extension of the flexibilities in rules related to Form I-9 compliance initially granted last year. The temporary rule, set to expire August 31, 2021, allows employers that have employees working exclusively in a remote setting due to COVID-19-related precautions to be temporarily exempt from Form I-9’s physical inspection requirements. Additionally, this same exemption applies to employers and workplaces that are operating fully remotely. Under the temporary rules, employers were allowed to virtually inspect Form I-9 documents. However, after August 31st, absent another extension, employers will be required to resume physical inspection of all Form I-9 identity and work authorization documents provided by new hires. Additionally, for all existing employees who were onboarded using remote verification, they must report to their employer or their employer’s designated authorized representative within three business days for in-person verification of documents. Once the documents have been physically inspected, the employer should add “documents physically examined” with the date of inspection to the Section 2 additional information field on Form I-9, or to section 3 as appropriate. ICE has clarified that subsequent Form I-9 audits will use the “in-person completed date” as a starting point for employees initially verified remotely. For more information, please visit this link.
EEOC Issues New Guidance on Sexual Orientation and Gender Identity Discrimination
By: Joseph Nelson, with Jackson Lewis
The Equal Employment Opportunity Commission (EEOC) observed LGBTQ+ Pride Month and the one-year anniversary of the landmark Bostock v. Clayton County Supreme Court decision by announcing new resources to aid employers in understanding the EEOC’s position regarding sexual orientation and gender identity discrimination. These resources include a new landing page and a new technical assistance document. These new resources, according to the EEOC, will “help educate employees, applicants and employers about rights of all employees, including lesbian, gay, bisexual and transgender workers, to be free from sexual orientation and gender identity discrimination in employment.” What are the five biggest takeaways from this new guidance for employers?
Brief Overview of the Bostock v. Clayton County Decision
In order to appreciate the EEOC’s new guidance documents, it is helpful to understand the significance of last year’s Bostock v. Clayton County decision, which held that firing individuals because of their sexual orientation or transgender status violates Title VII’s prohibition of discrimination on the basis of sex. This decision resulted from three cases: Altitude Express Inc. v. Zarda and Bostock v. Clayton County, in which gay men were fired because of their sexual orientation; and R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment and Opportunity Commission, where a transgender woman was fired because of her gender identity.
The Supreme Court consolidated these cases and issued a single opinion, addressing “whether an employer can fire somebody simply for being homosexual or transgender.” The Court’s conclusion was clear: “An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undistinguishable role in the decision, exactly what Title VII forbids.” However, the Court noted that its decision did not address various religious liberty issues, such as the First Amendment, the Religious Freedom Restoration Act, and exemptions provided to religious employers by Title VII.
Since the Bostock decision, the EEOC and other courts have interpreted Bostock’s holding to prohibit all forms of harassment and discrimination when done on the basis of sexual orientation and gender identity.
EEOC’s Guidance, Summarized
The new EEOC landing page consolidates information concerning sexual orientation and gender identity discrimination and provides links to updated fact sheets regarding recent EEOC litigation. The technical assistance document explains the significance of the Bostock decision and reiterates the EEOC’s position on Title VII rights and responsibilities regarding discrimination based on sexual orientation and gender identity. For example, according to the document, employers cannot:
- Discriminate against individuals based on sexual orientation or gender identity with respect to terms, conditions, or privileges of employment, including hiring, firing, furloughs, reductions in force, promotions, demotions, discipline, training, work assignments, pay, overtime, other compensation, or fringe benefits.
- Create or tolerate harassment based on sexual orientation or gender identity, including harassment by customers or clients. This may include intentionally and repeatedly using the wrong name and pronouns to refer to a transgender employee.
- Use customer preference to fire, refuse to hire, or assign work.
- Discriminate because an individual does not conform to a sex-based stereotype about feminine or masculine behavior (whether or not an employer knows the individual’s sexual orientation or gender identity).
- Require a transgender employee to dress or use a bathroom in accordance with the employee’s sex assigned at birth. However, employers may have separate bathrooms, locker rooms, and showers for men and women, or may have unisex or single-use bathrooms, locker rooms, and showers.
- Retaliate against any employee for opposing employment discrimination that the employee reasonably believes is unlawful; filing an EEOC charge or complaint; or participating in any investigation, hearing, or other proceeding connected to Title VII enforcement.
The document likewise notes that employers cannot discriminate, create, or tolerate harassment against straight or cisgender (someone whose gender identity corresponds with the sex assigned at birth) individuals.
The EEOC also addressed the tension between protections for private employers and employees with sincerely held religious beliefs and LGBTQ+ employees and applicants by noting, “Courts and the EEOC consider and apply, on a case by case basis, any religious defenses to discrimination claims, under Title VII and other applicable laws.”
What Does This Mean for Employers? 5 Biggest Takeaways
As a federal law, Title VII prohibitions on discrimination based on sexual orientation or gender identity extend nationwide regardless of state or local laws. The EEOC guidance clarified a few specific recurring questions regarding protections for LGBTQ+ employees, offering five key takeaways for employers:
- An employer covered by Title VII is not permitted to fire, refuse to hire, segregate, or take assignments away from someone (or discriminate in any other way) because customers or clients would prefer to work with people who have a different sexual orientation or gender identity.
- Whether or not an employer knows an employee’s sexual orientation or gender identity, employers are not permitted to discriminate against an employee because that employee does not conform to sex-based stereotypes about traditional feminine or masculine behavior.
- Prohibiting a transgender person from dressing or presenting consistent with that person’s gender identity would constitute sex discrimination.
- If an employer has separate bathrooms, locker rooms, or showers for men and women, all men (including transgender men) should be allowed to use the men’s facilities and all women (including transgender women) should be allowed to use the women’s facilities. However, it should be noted that this stance is a controversial hot button issue that is still developing, especially given the fact that the Supreme Court expressly left this issue unaddressed in Bostock, stating: “Under Title VII, too, we do not purport to address bathrooms, locker rooms, or anything else of the kind.”
- Intentionally and repeatedly using the wrong name and pronouns to refer to a transgender employee could contribute to an unlawful hostile work environment.
This new guidance makes clear that any discrimination based on sexual orientation or gender identity is prohibited under Title VII. Thus, employers should update their policies and practices to comply with the EEOC’s position.
Should you have questions about compliance matters in this area, you should contact your Fisher Phillips lawyer or the author of this Insight. To ensure you stay up to speed with the latest developments, make sure you are subscribed to Fisher Phillips’ Insight System to get the most up-to-date information.
The push for pay equity has moved beyond prohibiting pay discrimination and into requiring employers encourage pay transparency for applicants and employees.
At the federal level, the National Labor Relations Act can protect discussions involving compensation as concerted activity. For federal contractors, OFCCP prohibits policies that discourage pay transparency. Many states have followed suit — and done even more.
Some states even require affirmative disclosure of pay ranges. For example, if an applicant asks (after an interview), employers in California must disclose the pay range for the position. Maryland, Rhode Island, and Washington also require employers to disclose the pay range to applicants upon request. Washington also requires that employers provide the salary range to employees who are changing roles, if they request it. And Rhode Island entitles employees to pay range disclosures upon hire, when changing jobs, and if they ask for it.
Nevada requires employers to provide the wage or salary range to applicants who have completed an interview—even without a request. But employees still must request the range to require transparency.
Connecticut now requires employers to provide the salary range to applicants (1) upon request and (2) by the time it extends an offer of compensation (if the applicant did not request it). It also requires disclosure to employees on hire, when changing roles, and when the employee requests it.
Perhaps Colorado has the most burdensome requirements. There, an employer with even one employee in Colorado that is recruiting for a job in Colorado (or that is remote) must include (1) the wage rate or range for the role, (2) a general description of other compensation available for the role, and (3) a general description of benefits for the role in the job posting.
Setting a new mark, Colorado also requires “opportunity transparency.” Employers with at least one Colorado employee must also provide written notice to its Colorado employees of any “promotional opportunity” — including any hire, change in job title, or material change in job duties, opportunities, or responsibilities — before it decides who will get that new job. It includes in-line promotions. Even employees who are not qualified for the job must receive notice of the opportunity. And if the role is in Colorado or is remote the notice must include the same pay and benefits disclosures that job postings require.
Since Colorado began enforcing its novel transparency requirements, employers have been struggling with how to comply. Should Colorado’s “outlier” law drive changes to company-wide practices? Is Colorado even an outlier, or will others follow suit?
So far, the answer appears to be “yes” and “no.” Maryland, Nevada, Connecticut, and Rhode Island enacted their pay transparency requirements after Colorado. They require pay disclosures, but do not mirror the Colorado approach.
But bills under consideration in Massachusetts (H 1950 / S 1208) would require employers to provide the pay scale for a particular employment position to an applicant (after interview) or an employee (currently employed in that position), upon request. The bills include nothing on “opportunity transparency.”
And in New York, bills (S 5598A/A 6529A) would require employers to disclose the compensation range, job description (if it exists), and a general description of other compensation and benefits for the role “upon issuing an employment opportunity for internal or public viewing.” This seems to require pay and benefits disclosures in job postings — like Colorado. But unlike Colorado, the New York bills do not propose an “opportunity transparency” requirement.
Synthesizing the varied approaches among the states, the trend seems to require pay disclosures. At a minimum, new laws require disclosure upon request. But there may be an emerging trend toward proactive disclosure to applicants and employees—see Colorado and New York. “Opportunity transparency,” however, seems to be farther than most states are currently prepared to go.
If you have any questions, please reach out to a Jackson Lewis attorney.
As Colorado and Virginia Follow California’s Lead in Enacting Data Privacy Laws, Employers Must Start Planning to Address an
By: Elisa Nadeau, with Littler
In Ferra v. Loews Hollywood Hotel, LLC, the California Supreme Court rejected the longstanding view that meal and rest break premiums are paid at the employee’s base rate, rather than at the more complicated regular rate of pay used to calculate overtime premiums. The court found that the phrase from the rest break requirements (“regular rate of compensation”) is synonymous and interchangeable with the phrases used in the overtime context (“regular rate of pay” and the more general, “regular rate”). The court refused to hold the decision was prospective only, leaving the door open for the decision to be applied retroactively. Thus, California employers will need to examine their meal and rest break procedures and nondiscretionary incentive pay practices to avoid noncompliance.
In 2001, as a disincentive to perceived meal and rest break avoidance, the California Legislature and the Industrial Welfare Commission introduced a penalty for the failure to provide recovery periods, i.e., meal and rest breaks. The penalty is “an additional hour of pay at the employee’s regular rate of compensation.” Since then, employers have generally paid premiums at the employees’ base hourly rate. Over the last ten years or so, a handful of federal courts considered employees’ arguments that the break premiums should be calculated at the overtime regular rate, but almost always disagreed, usually relying on the break penalty law’s use of the phrase “regular rate of compensation” in contrast to “regular rate of pay” consistently used in wage orders and Labor Code section 510(a) when prescribing overtime pay.
Enter the plaintiff, a bartender at the defendant hotel from 2012 to 2014, who argued she should have been paid meal and rest break premiums at a rate that included her quarterly bonuses. The Los Angeles Superior Court and the Second District Court of Appeal rejected her theory, but the California Supreme Court granted review.
While California’s wage orders repeatedly use the phrase “regular rate of pay” when describing overtime obligations, the same document only uses the phrase “regular rate of compensation” when describing meal and rest break premiums. This is the distinction relied upon by employers and federal courts in finding that break premiums are paid at the base hourly rate and not the overtime regular rate. However, the court pointed out that the defendant failed to identify any difference in the meaning between the two phrases. Nor could the court find any purpose for the distinction in the legislative history and the history behind the language in the wage orders. The court observed that federal law had long defined “regular rate” in the context of overtime to include nondiscretionary incentive pay and that California had adopted that interpretation decades ago. California cases construing the overtime law often shorten the phrase to “regular rate” further suggesting that “of pay” does not add significant meaning. The court pointed out that the words “pay” and “compensation” are also used interchangeably in the Labor Code. Ultimately, the court held that regular rate of compensation for meal and rest break premiums has the same meaning, and must be calculated the same way, as the regular rate of pay for the overtime premium.
The defendant argued the court should not apply the holding retroactively because the law had never previously been interpreted to require break premiums be paid at the overtime regular rate and doing so could expose employers to “millions” in liability without warning. The court rejected the argument because the holding articulated a previously unsettled issue of statutory interpretation, which is traditionally not entitled to only prospective application. The court stated, “it is not clear why we should favor the interest of employers in avoiding ‘millions’ in liability over the interest of employees in obtaining the ‘millions’ owed to them under the law.”
Example of Regular Rate Calculation
Employers that have been paying nondiscretionary forms of pay to their non-exempt employees in California are likely familiar with calculating the regular rate for the purposes of overtime.1 In most situations, the regular rate is calculated as the weighted average rate based on the compensation paid to the employee. The rate is calculated on a weekly basis. For example, assume an employee works 55 hours in a workweek (40 regular, 13 overtime and 2 double time). Of those 55 hours, 25 are paid at the employee’s base rate of $20 an hour and the remaining 30 hours are paid at $21 an hour to reflect a $1 shift differential. While the employee’s base rate is $20, the employee’s regular rate for this week is $20.55. (Total compensation for the week is $1,130, divided by 55 total hours worked, results in a weighted average rate of $20.55 per hour.) If the employee is entitled to a meal or rest period premium for this week, that additional hour premium should be paid at the regular rate of $20.55, not the employee’s $20 base rate.
Significantly, the regular rate will also increase if an employee is later paid compensation that was earned over a period of time. For example, if an employee is paid a quarterly bonus, that bonus must be apportioned back over the hours worked during the quarter, resulting in an increased regular rate.2 To the extent the employee was paid any meal/rest premiums during that quarter, the employee should also be paid a “true-up” amount reflecting the increased regular rate resulting from the quarterly bonus payment.
If non-exempt employee populations are also incurring meal and rest break premiums for the same work weeks in which they earn additional forms of pay (e.g., shift differentials, bonuses, commissions, etc.), employers will need to calculate the regular rate with the same method they use for overtime. Employers can also consider eliminating these additional forms of pay to avoid the administrative burden. Employers concerned about exposure for past practices should seek legal counsel.