Employment and Labor Insider - Legalese Is Not Spoken Here

Is your company an EEOC target?

I've written before about the Strategic Enforcement Plan of the Equal Employment Opportunity Commission, which was officially adopted last December, and the Commission's priorities. Last week, EEOC Commissioner Victoria Lipnic spoke about the Plan in more detail at legal compliance symposium.

Commissioner Lipnic is a Republican who used to head the Employment Standards Administration of the U.S. Department of Labor under former President George W. Bush. In that position, she was over the Wage and Hour Division and the Office of Federal Contract Compliance Programs, among other agencies.

As one might expect from a Republican commissioner, Ms. Lipnic appeared to be somewhat less than 100 percent "on board" with the EEOC's current agenda. She reportedly expressed skepticism that use of credit histories in hiring created a disparate impact on women and minority applicants and said that she thought the EEOC should focus more on helping employers to comply with the law and less on litigation.

Victoria Lipnic: Not a team player?

Anyway, here are five ways, according to Ms. Lipnic, that your company could become an EEOC target:

1. You use credit or criminal histories to screen new hires. Although Kaplan's recently cleaned the EEOC's clock in a credit history case, other employers can't necessarily count on doing as well. (In case you're feeling really cocky, please note that in the last couple of weeks, the EEOC has had some multi-million dollar wins. Read it and weep.) The EEOC is unfavorably disposed to the use of these screening devices. As stated above, Ms. Lipnic is skeptical about whether use of credit histories creates a disparate impact. On the other hand, criminal background checks have been demonstrated to have a disparate impact on African-American and Hispanic men. If you use credit or criminal background information in hiring, make sure that (a) the information is relevant to the position applied for and that you can prove it, and (b) you make an individualized analysis of each person who has a credit/criminal problem rather than flatly refusing to hire in all cases.

The EEOC's clock after Kaplan's cleaned it. (And still a little shaky from the experience.)

And, I hope this goes without saying, but you should never use arrests as a basis for declining employment -- convictions and pleas only.

2. You automatically terminate employees when they reach the end of their medical leaves of absence -- no ifs, ands, or buts. I've harped on this a number of times. The EEOC's position is that when an employee reaches the end of his or her allowable medical leaves, the employer should make a good-faith attempt to bring the employee back to work, with or without reasonable accommodations, before cutting the cord.

3. You won't accommodate individuals with disabilities (duh!) or pregnant women who have pregnancy-related limitations. The EEOC is looking askance at employers who will not make "accommodations" for pregnant employees but instead either fire them (hopefully not!) or force them to take medical leaves of absence. This is an unsettled area of the law -- generally, pregnancy is considered a "temporary disability" and so the courts have required employers to treat pregnant women the same as other employees with temporary disabilities. Of course, now that the EEOC has indicated non-permanent conditions may be "disabilities" within the meaning of the ADA, it's possible that a nine-month limitation would be considered a real ADA disability. At least, that's the EEOC's story, and they're sticking to it. 

Gratuitous Cinco de Mayo picture. These women do not appear to have any medical restrictions.

4. You run afoul of an "emerging issue." A big one for the EEOC right now is transgender discrimination. Discrimination against a transgendered individual isn't an ADA issue because the ADA specifically excludes "transsexuals" (the terminology that was being used in 1990, when the ADA was enacted). But it can be a form of sex discrimination, in violation of Title VII.

5. You have pay disparities based on race or sex. If you read this blog, you know I am a skeptic when it comes to the gender pay gap. But what I think doesn't matter. Ms. Lipnic says the EEOC will be on the lookout for equal pay cases to pursue.

I hope everyone knows the "equal pay drill" by now:

* analyze your comp yourself before the government does it for you.

* correct any disparities you may find that don't have good explanations.

* if you do have good explanations for disparities, be sure they are documented so you can prove it.

6. You don't respect your elders, and 50 is the new 40. Although the Age Discrimination in Employment Act protects individuals age 40 and older, Ms. Lipnic said that the EEOC is going to target employers who discriminate against employees 50 and older. In my opinion, this is a great strategy -- after all, age discrimination against people in their 40's is fairly rare. (Unless you're a fashion model, athlete, or TV anchorwoman.)

"Don't hate me because I'm over 50!"

Anyway, back to the EEOC. I know that none of you would dream of discriminating against an employee because of age. But do be sure that you have well-documented reasons for taking action against an older employee and that you are treating that older employee the way you would any "similarly situated" younger person. Also, be even-handed in making hiring and promotion decisions. 

AND, IN OTHER NEWS . . .

Way to go, Marissa Mayer! I have given Yahoo CEO Marissa Mayer a lot of grief over her decision to eliminate telecommuting for employees while having a nursery built next door to her office. Well, it was announced this week that Ms. Mayer is doubling the amount of paid maternity leave for Yahoo moms from 8 weeks to 16 weeks. (Dads get 8 weeks of paid leave.) I still wish she would restore telecommuting (not that anyone asked me), but this is a really nice new benefit.

Model Lanisha Cole settles her sexual harassment lawsuit against The Price Is Right for an undisclosed amount. This came after the court threw out a $7.8 million verdict in her favor. Don't worry, TPIR lawsuit followers -- I'm sure there are plenty more to come!

Are male-dominated workplaces discouraging to mothers?

This is kind of creepy . . . but how else do you get a 15 percent raise any more? A real estate agency in New York offered pay increases of 15 percent to any employee who got a tattoo of the firm logo. The tattoo can go -- er -- anywhere, and 40 employees have said yes so far.

Oh, that Michael Bloomberg. Mayor Bloomberg strikes again. He initiated a bike-sharing program to encourage New Yorkers to become more fit. But no one weighing 260 lbs. or more is eligible to participate because of fear that they'll damage the bikes. Kind of defeats the purpose of a bike-share program designed to promote physical fitness, doesn't it?

¡Feliz Cinco de Mayo!*

*DISCLAIMER: Cinco de Mayo is Sunday, not today.

Image credits: Wikimedia Commons. Painting is Portrait of an Old Man by Niccolo Cassana (1659-1714).

My post last week on why the "gender pay gap" is mostly bogus generated a great discussion in the comment box. In the hopes of keeping it going, this week I'd like to talk about some of the discrimination or quasi-discrimination issues we do occasionally find.

That nasty remaining five percent or so* that can't be explained by personal choice.

*Completely unscientific percentage.

If your pay audit uncovers one of these issues, you ought to be thinking about fixing it:

The Lilly Ledbetter Effect. Lilly Ledbetter says she received relatively poor performance reviews in the 1980's because she was a woman. Whether she is correct or not, I am sure that her employer, Goodyear, would have had a tough time disproving this* because she didn't sue until after she had retired, and any records were probably long gone by that time.**

*Yes, I know the burden of proof in a discrimination case in court is on the employee, but as a practical matter it's on you, the employer. And if you're a federal contractor, you know that the Office of Federal Contract Compliance Programs will not give you the benefit of the doubt. If they find a disparity, you will have to prove to their satisfaction that it's not a result of discrimination.

**This is a reason why employers should not destroy records, but that's a topic for another blog post.

But, anyway, let's take Ms. Ledbetter's word for it. So, she got lousy reviews only because she was a woman in a man's world, and pay increases were based on performance ratings. Just for the sake of argument, let's say Goodyear gave a 5 percent increase to everybody who got "Exceeds Expectations," and 3 percent to everybody who got "Meets Expectations." And just for the sake of argument, let's say Ms. Ledbetter deserved an "Exceeds" rating in 1982 but got only a "Meets" because her male chauvinist pig of a boss thought women were good for only one thing. And I don't mean making tires. Meanwhile, Ms. Ledbetter's male counterpart, Joe, got "Exceeds" in 1982 even though he had exactly the same performance as Lilly, just because he was a man.

"Women can't do no work. Dey ain't as smart as us guys is!"

Let's say the male chauvinist pig boss retires in 1983, and from that point on, Lilly begins reporting to Alan Alda, who gives her the performance ratings she really deserves every year after that. Which means that she and Joe BOTH get "Exceeds" in every year until Lilly retires, many years later.

"I love all women. And I don't mean that in an inappropriate way."

Not only will Lilly never catch up with Joe, but also the gap in their pay will widen over time, even though they received exactly the same percentage pay increase every year from 1983 forward.

If you review your compensation and find an unexplained pay disparity involving long-term employees, you should investigate whether it's a result of the "Lilly Ledbetter Effect" -- the lingering effects of a long-past discriminatory decision. If so, then go ahead and make an adjustment to catch her up. Don't wait for her to sue you, or (more likely) for an audit by the OFCCP.

Be sure to visit Stephanie Thomas's The Proactive Employer Blog for this month's Employment Law Blog Carnival, Spring Is In Bloom Edition! Stephanie, thank you for hosting!

The "Retro Career Choice" Effect. This is similar to the Lilly Ledbetter Effect, except that it's technically not a "discrimination" issue. However, it is a fairness issue that creates the appearance of discrimination.

In this scenario, you have a long-term female employee (let's call her Flo) in a supervisory or management position who is paid less than her male counterparts with similar time in the position. Flo has been a great employee, and you don't have any male chauvinist pigs working for you, so you know that she's been rated fairly her entire career.

Flo is on the right.

When you look back at the beginning of her employment, you see that Flo started out as a machine operator and worked her way up to supervisor 20 years ago. Her male counterparts started out as skilled mechanics before working their way up to supervisor 20 years ago. Flo and the boys all got a 10 percent pay increase when they were promoted to supervisor 20 years ago.

OK, Robin - we see where you're going with this. So why not give everybody a "flat" pay increase when they get promoted?

Glad you asked! The reason you use a percentage rather than a "flat" increase is that you want to make sure employees don't lose money when they're promoted from an hourly position with overtime into a management position without overtime. The only way to guarantee this (apart from giving everybody, like, a $100,000 pay increase when they're promoted to supervisor) is to base the employee's supervisor pay on his or her prior hourly pay.

Oh, OK. Thanks. Now, back to our story. Flo freely chose the machine operator job (contrast with "The Channel Effect" below), but the machine operator job didn't pay as much as the mechanic job, so when Flo was promoted and got her 10 percent increase, she got less real money than the guys did. And her future raises would have been a percentage of each year's salary. Which means that, even if Flo and the guys got exactly the same percentage increases every year after their promotions, as with Lilly Ledbetter, the pay gap would continue to widen, and after 20 years Flo would be earning significantly less than her male counterparts. Even though she is every bit as good a supervisor as they are, and even though your company has treated her in a completely non-discriminatory manner.

Doesn't seem right, does it? So, even though this is technically not discrimination, we do normally suggest that employers give their "Flo's" an adjustment to bring them into line with their counterparts.

The Channel Effect. Thanks to commenter Randy Martinez for bringing this up last week in connection with sales positions. Anyone with eyes to see and ears to hear knows that women (statistically speaking, of course) tend to choose certain jobs and that men (statistically speaking, of course) tend to choose other jobs. If these choices are truly voluntary, then there is nothing wrong with it -- whatever the government or the National Organization for Women may tell you.

"Oh, yeah?"

But occasionally the employer will take it upon itself to "guide" women into certain jobs and "guide" men into different jobs that pay more money.

In recent history, supermarkets have been accused of channeling women into cashier positions and men into meat department positions, which pay a lot more because they involve things like cleaning fish guts and cutting cows up into steaks. (I'm not saying supermarkets actually channel -- only that they've been accused of it.)

The OFCCP is onto channeling, and has announced that it will be on the lookout for it during compensation audits.

If you're "channeling" based on assumptions, stereotypes, or even past experience, about what men and women prefer to do or are better at, then stop it! Right now! This is sex discrimination, and it is illegal.

Then, once you've stopped, figure out a way to offer the "male" jobs to your female employees. Many will prefer to stay where they are, but those who prefer the "male" jobs ought to have the opportunity. Once you find out who those women are, consider whether you also need to make some pay adjustments.

The "I Have No Flipping Idea" Effect. Finally, you might come across this one. You or your lawyer finds that a female is paid less than similarly situated males. You try to figure out why. You investigate all of the non-discriminatory reasons we discussed in last week's post, and none of those fit. You investigate all of the discriminatory or quasi-discriminatory reasons discussed above, and none of those fit, either. You talk to everybody who has been involved in hiring these people, as well as those involved in giving raises. Nobody has a clue why this woman is making less money.

"Hmm. I have no flippin' idea why Evangeline is making less money."

If you have a pay disparity that you cannot explain, then go ahead and make an adjustment. Your utter lack of an explanation will be held against you.

Next week, I'll conclude this series with a post on preventive steps that employers can take to avoid creating pay disparities in the first place.

Image credits: Wikimedia Commons.

(As the agencies and courts enter their year-end flurry of mischief, I'll be doing quick posts as needed on the latest developments.)

Dum-da-dum-dum!

The Equal Employment Opportunity Commission has adopted essentially the Strategic Enforcement Plan that I posted about earlier this year. The final version has added "equal pay enforcement" to its list of high priorities. Here is the EEOC's press release, and here is the final version of the Plan. The Plan will be in effect from Fiscal Years 2013 through 2016. We'll have to wait and see whether this really translates into more aggressive enforcement against employers.

All this week, while formulating my questions for our presidential and vice presidential candidates, I avoided reading what my fellow bloggers were asking because I wanted *sniff* to maintain my independence. Actually, I was afraid that their questions would be so good, I'd be tempted to "borrow" too much.

Lois Lane and I have to maintain our journalistic integrity.

Last night, I finally took a peek at what my colleagues were asking, and there were indeed some great questions that I wish I'd thought of.

Dan Schwartz, who organized our blogfest (thank you, Dan - this was a great idea!), had multiple questions for each candidate. Dan appears to have shared my concerns about the need for more pay equity legislation and was critical of the progress that has been made thus far on enacting the Employment Non-Discrimination Act. My favorite question of Dan's, though, addressed to Governor Mitt Romney, was whether he really intended to "de-politicize" the National Labor Relations Board and, if so, how.

Jon Hyman took a bipartisan approach, asking President Obama why his administration had done so little to help families, implying that Jon favored expansion of the Family and Medical Leave Act. He also implicitly criticized Governor Romney for waffling on the ENDA. But then he asked Vice President Joe Biden to explain to employers his support for an aggressive NLRB and the Employee Free Choice Act, and he implied that Congressman Paul Ryan wasn't a true fiscal conservative -- notwithstanding Ryan's expressed admiration for Ayn Rand.

Mitt Romney was accused of a lot of waffling this week.

Eric Meyer asked Gov. Romney whether he would repeal the FMLA (yeah, right!) and, like Jon Hyman, criticized Vice President Biden for the administration's failure to do more to enact equal pay legislation.  Yesterday, his question to Congressman Ryan was very similar to the one I had asked -- whether Ryan believes there is any role for unions in today's workplace. Eric went one step further than I did, asking Ryan whether he believed in repealing the National Labor Relations Act altogether.

Donna Ballman of "Screw You Guys, I'm Going Home" and author of Stand Up for Yourself Without Getting Fired was the only plaintiff's lawyer in our group, and she did not disappoint. She was unabashedly partisan, and I'll focus on her questions for the Republican candidates, since adversarial questions are more fun.

She asked Romney whether he still believed that management needed to be more cooperative with labor and forgo some perks so that companies would survive, and then commented, "I'm pretty sure I know the answer, but I'd like to hear him backpedal." She also accused him of waffling on whether the minimum wage should be tied to the Consumer Price Index (a position he had taken as governor of Massachusetts but presumably no longer holds). "This election is of huge importance to employees," she concluded. "You can either vote against your own economic interests and can buy into what Fox is telling you, or you can vote with your wallet. For anyone making under a million a year, the choice is pretty clear."

Here's Donna Ballman going after the GOP. (Just teasing, Donna!)

Then it was Ryan's turn to face Donna. She raked him over the coals for his comment at the Republican National Convention implicitly blaming Obama for a plant closing in Wisconsin when the plant closing had actually been announced during the end of the Bush Administration and only carried out during the Obama administration. (She also had questions about his support for extending unemployment benefits, his support for Governor Scott Walker of Wisconsin, and of the ENDA.)

In short, it was a lively week, and a good time was had by all. I hope you enjoyed it, too. The first real presidential debate will be next Wednesday at 9 p.m. Eastern on most major TV networks and streamed over the internet. Be sure to tune in and see whether the moderators use any of our questions! I am sure they will.

Photo credits: Wikimedia Commons.

When it comes to the pay gap between men and women, I am a skeptic.

Well, wait a minute. Let me try that again. I'm not skeptical about the existence of the pay gap. I'd be a fool to deny all that cold, hard reality. I just don't think it's usually a result of sex discrimination. Nearly all of the pay gap can be explained by the lifestyle choices that women are more likely to make. Such as the following:

*Until the latest generations of women, entering the workforce later than men.

*Until the latest generations of women, less formal education than men. (For you youngsters who may not know, back in the dark ages, women used to drop out of school to get married. Really!)

*Then and now, interruptions of career to bear and rear children.

*Choosing a "job" instead of a "career" to have more time for family.

*Working fewer hours because of personal/family needs.

*Placing a premium on flexibility rather than money because of personal/family needs.

*Tending to choose cleaner, safer jobs that don't involve heavy lifting, extensive travel, or other "negative" working conditions where the tradeoff may be premium pay.

Now, if you are a female zillionaire CEO or a single mom who is the sole financial support of her family, please don't tell me I'm full of beans. I know there are plenty of women who earn more than their husbands, or even have husbands who stay home and take care of the kids full-time, or don't even have husbands at all. But statistically speaking, women are far more likely to take on most of the "family" responsibility while their husbands focus on being the primary economic support of the family. And, I submit, this explains nearly all of the "gender gap" in pay.

In other words, as I've said before (scroll down to No. 5), I think the "women earn only 81 cents for every dollar that men earn," is a gross exaggeration to the extent that it's used as evidence that rampant sex-based pay discrimination continues to plague our nation.

OK. I hope I have sufficiently disclaimed what is about to follow.

The U.S. Court of Appeals for the Seventh Circuit, which hears appeals from federal courts in Illinois, Indiana, and Wisconsin, reversed summary judgment for an employer in an equal pay case.

Before I talk about the case, let me share what we usually find when we audit pay. I've done my share of "compensation analyses," either in connection with equal pay charges or lawsuits, or audits by the Office of Federal Contract Compliance Programs, or sometimes just because the employer wants to make sure it is paying employees in a fair and equitable manner.

What we usually find is a lot of gaps, frequently correlated with race or sex. To put it more bluntly, what we usually find is that the white guys generally are making the most money. But, as we all know, "correlation is not causation." When we probe, we usually find good, non-discriminatory explanations for almost all of the discrepancies. Maybe Joe was hired with 20 years' relevant experience, while Mary was recently promoted from a lower-level position. Maybe Mary had a five-year interruption a few years ago while her kids were in preschool, and hasn't caught up since her return to the work force. Maybe the gap can be explained by some other reason, like Joe is a hard-working, extremely talented, prince of a fellow, beloved by all, and Mary is a rude, clock-watching, incompetent ninny who doesn't even deserve to work when you really think about it.

However, we also frequently find one or two people whose pay is below where it should be and for whom there is no good explanation. This doesn't necessarily mean that discrimination was the reason. But if you're sued or audited by the government, and a pay gap is discovered that you can't explain, a judge or jury, or the government, is going to assume that the real reason was discrimination.

(The good news is that if you find discrepancies like this on your own, it's pretty easy to fix them by making a pay adjustment.)

Which brings us back to this Seventh Circuit case, which contains some good lessons for employers who want to ensure that they're "clean" from an equal pay standpoint. So, let's make the usual Y-shaped incision and perform an "autopsy" of the case, shall we?

(Continued . . .)

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