Employment Training, Practices and Procedures

Featured as our top story on Employment Law This Week: Me too At Work – Sexual misconduct in the C-Suite leads to shareholder lawsuits.

Last month on Employment Law This Week, you heard that sexual misconduct allegations would start impacting shareholder value and reputation. Well, now we’ve got a case study in Wynn Resorts. After the Wall Street Journal uncovered multiple sexual misconduct allegations against Casino mogul Steve Wynn, the company’s stock fell nearly 20%. Wynn resigned a week later, but the company’s troubles were far from over. The company’s  stock has lost $3 billion in value. The first shareholder lawsuit was filed the day Wynn resigned, and to date three suits by shareholders claim that Wynn and the Board breached their fiduciary duties to the company and its shareholders. Bill Milani, from Epstein Becker Green, has more.

Watch the segment below and read our recent post.

The United States Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) recently sent 1,000 Corporate Scheduling Announcement Letters (“CSALs”) to 515 federal government contractors. The CSALs provide advance notice that contractor establishments may be audited by the OFCCP during the scheduling cycle, which ends September 30, 2018, to ensure compliance with the contractors’ non-discrimination/affirmative action obligations.

The CSALs were sent on February 1, 2018, to the attention of the Director of Human Resources of the contractor establishments appearing on the FY2018 Scheduling List. Scheduling Letters will be sent to contractor establishments, beginning March 19, 2018, to commence the compliance review process.

According to the OFCCP, the purpose of the CSAL is fourfold:

  • To provide personnel at each establishment with at least 45 days’ advance notice to obtain management support for compliance and self-audit efforts;
  • To encourage contractors to take advantage of compliance assistance offerings;
  • To encourage contractors to focus on self-audit efforts that, if problems are identified and addressed, will save the OFCCP time and resources when doing its review; and
  • To help contractors manage/budget the amount of time required for the review. Contractors receiving CSALs should take advantage of the advance notice to ensure their affirmative action programs are in compliance and that any potential issues have been addressed in advance of the audit.

Contractors subject to a compliance review need to be vigilant in responding to the audit. It appears that the OFCCP continues to take a “deep dive” approach, which includes in-depth, time-consuming reviews of contractors’ hiring, compensation, and other employment data for statistical indicators of possible discrimination.  In recent years, the number of audits conducted by the OFCCP has dropped, while the enforcement approach has expanded.

According to a report by Bloomberg Law, through the third quarter of FY2017, the number of audits closed by the OFCCP was 915, down from 1,700 the prior year; yet the OFCCP collected $23.1 million in settlements in FY2017 – more than double the prior year when it collected $10.5 million. This should certainly get the attention of all federal government contractors.  While the number of audits by the OFCCP has decreased, the costs associated with defending an audit, and the settlement payouts, for contractors have increased.

What Employers Should Do Now

Contractors need to apprise appropriate personnel at each of their facilities to monitor incoming mail for receipt of the CSAL and Scheduling Letter, with forwarding instructions if received.

Contractors that receive a CSAL should take advantage of the advance notice by conducting a self-audit to ensure that their affirmative action programs are in compliance and that any potential issues have been addressed in advance of the audit. Once a Scheduling Letter has been issued, contractors will only have 30 days within which to respond, and the OFCCP has made clear that extensions of time of no more than 15 days will not be given lightly.

Contractors subject to a compliance review need to pay particular attention to their hiring practices and compensation systems. An impact ratio analysis should be performed, examining applicants and hires to determine if there are statistical results pointing to adverse impact and, if so, what the explanation is for the hiring decisions.  A compensation analysis should also be conducted, with explanations provided if significant pay disparities exist.

The list of establishments that receive CSALs is generated by the OFCCP’s neutral-based Federal Contractor Selection System. If contractors have concerns about whether or not they received a CSAL at any of their facilities, they may make inquiry about whether an establishment was mailed a CSAL by e-mailing a written request on company letterhead to the Division of Program Operations at OFCCP-DPO-Scheduling@dol.gov.

Our colleague  at Epstein Becker Green has a post on the Health Employment and Labor blog that will be of interest to our readers in the financial services industry: “New York City Council Passes Bills Establishing Procedures on Flexible Work Schedules and Reasonable Accommodation Requests.”

Following is an excerpt:

The New York City Council recently passed two bills affecting New York City employers and their employees. The first bill, Int. No. 1399, passed by the Council on December 6, 2017, amends Chapter 12 of title 20 of the City’s administrative code (colloquially known as the “Fair Workweek Law”) to include a new subchapter 6 to protect employees who seek temporary changes to work schedules for personal events.  Int. No. 1399 entitles New York City employees to request temporary schedule changes twice per calendar year, without retaliation, in certain situations, e.g., caregiver emergency, attendance at a legal proceeding involving subsistence benefits, or safe or sick time under the New York City administrative code.  The bill establishes procedures for employees to request temporary work schedule changes and employer responses.  Exempt from the bill are employees: (i) who are covered by a collective bargaining agreement; (ii) who have been employed for fewer than 120 days; (iii) who work less than 80 hours in the city in a calendar year; and (iv) who work in the theater, film, or television industries. …

Read the full post here.

Our colleagues at Epstein Becker Green have released a Take 5 newsletter focused on the financial services industry.  Following are the introduction and links to the stories:

For this edition of the Take 5 for financial services, we focus on a number of very well-publicized issues. The tidal wave of sexual harassment allegations that followed the Harvey Weinstein revelations has drawn the attention of companies, their human resources departments, and employment lawyers. The rule on chief executive officer (“CEO”) pay ratio disclosure, which goes into effect in 2018, is a required focal point that garners significant interest in an industry that is all about money. The hyper-charged political climate has brought social activism and heated political discussions into the workplace with increasing frequency—and with potential employment law implications. A heightened legislative focus on eliminating at least one recognized source of the gender pay gap has resulted in new rules that prohibit very common inquiries about past compensation during the interview process. Finally, data leaks are a mounting threat and cybersecurity is a growing concern throughout an industry that is saturated with the highly sensitive, and sometimes personal, financial information of its clients.

We address these important issues and what financial services employers should know about them:

  1. The Weinstein Effect: #MeToo Allegations in the Financial Services Industry
  2. CEO Pay Ratio: It’s Not Too Late to Calculate!
  3. Managing Employees’ Political and Social Activism in the Workplace
  4. Equal Pay Update: The New York City and California Salary History Inquiry Bans
  5. Insider Threats to Critical Financial Services Technologies and Trade Secrets Are Best Addressed Through a Formalized Vulnerability and Risk Assessment Process

Read the full Take 5 newsletter here and download the PDF.

Our colleague , a Member of the Firm at Epstein Becker Green, has a post on the Technology Employment Law blog that will be of interest to many of our readers in the financial services industry: “Get Ready to Respond to IRS Letter 226J: Employer Shared Responsibility Payment Assessments.”

Following is an excerpt:

In a recent update to the IRS’ Questions and Answers on Employer Shared Responsibility Provisions under the Affordable Care Act, the IRS has advised that it plans to issue Letter 226J informing applicable large employers (ALEs) of their potential liability for an employer shared responsibility payment for the 2015 calendar year, if any, sometime in late 2017.  The IRS plans to issue Letter 226J to an ALE if it determines that, for at least one month in the year, one or more of the ALE’s full-time employees was enrolled in a qualified health plan for which a premium tax credit (PTC) was allowed (and the ALE did not qualify for an affordability safe harbor or other relief for the employee). The IRS will determine whether an employer may be liable for an employer shared responsibility payment, and the amount of the potential payment, based on information reported to the IRS on Forms 1094-C and 1095-C and information about the ALEs full-time employees that were allowed the premium tax credit. …

Read the full post here.

Our colleagues , at Epstein Becker Green, have a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the financial services industry: “New York Paid Family Leave Regulations Finalized: How Do They Compare to Prior Versions?

Following is an excerpt:

On July 19, 2017, the New York State Workers’ Compensation Board (“WCB” or the “Board”) issued its final regulations (“Final Regulations”) for the New York State Paid Family Leave Benefits Law (“PFLBL” or the “Law”). The WCB first published regulations to the PFLBL in February 2017, and then updated those regulations in May (collectively, the “Prior Regulations”).

While the Final Regulations did clarify some outstanding questions, many questions remain, particularly pertaining to the practical logistics of implementing the Law, such as the tax treatment of deductions and benefits, paystub requirements, certain differences between requirements that pertain to self-funding employers and those employers intending to obtain an insurance policy, and what forms and procedures will apply. …

Read the full post here.

On June 14, 2017, Delaware Governor John Carney signed into law a bill that amends Delaware’s Code relating to unlawful employment practices to prohibit employers from (i) engaging in salary-based screening of prospective employees where prior compensation must satisfy certain minimum or maximum criteria or (ii) seeking the compensation history of a prospective employee from the prospective employee or a current or former employer (the “Law”). Under the Law, “compensation” is defined broadly to include wages, benefits, or other compensation.

Similar to the New York City salary history ban, employers are not prohibited from discussing and negotiating salary expectations, so long as employers avoid asking for a prospective employee’s compensation history. Additionally, after an employment offer has been made and accepted, and compensation terms have been extended and accepted, the Law allows for the confirmation of a prospective employee’s compensation history. Any such compensation confirmation must be authorized by the employee in writing.

The Law adds to a growing wave of bans on compensation history inquiries. Similar restrictions have been enacted in Massachusetts (eff. July 1, 2018), Oregon (eff. October 9, 2017) and Puerto Rico (eff. March 8, 2018), as well as in New York City (eff. October 31, 2017), Philadelphia, and most recently, San Francisco (eff. July 1, 2018). Philadelphia’s pay history ban was supposed to take effect May 23, 2017, but the City delayed its enforcement in light of a legal challenge by the Chamber of Commerce for Greater Philadelphia. The law is not yet being enforced by the City.

Amid challenges regarding Philadelphia’s upcoming law prohibiting employers from requesting an applicant’s salary history, the City has agreed not to enforce the upcoming law until after the court has finally resolved the injunction request.

The law, which was set to become effective May 23, 2017, has been challenged by the Chamber of Commerce for Greater Philadelphia (the “Chamber”). The Chamber’s lawsuit alleges that the pending law violates the First Amendment by restricting an employer’s speech because, among other reasons, “it is highly speculative whether the [law] will actually ameliorate wage disparities caused by gender discrimination.” It is also alleged that the law violates the Commerce Clause of the U.S. Constitution, the Due Process Clause of the Fourteenth Amendment, and Pennsylvania’s Constitution as well as its “First Class City Home Rule Act” by allegedly attempting to restrict the rights of employers outside of Philadelphia.

On April 19, a judge for the Eastern District of Pennsylvania stayed the effective date of the law, pending the resolution of the Chamber’s motion for a preliminary injunction. Prior to resolving the injunction, the parties will first brief the court on the Chamber’s standing to bring the lawsuit. This issue, regarding whether the Chamber is an appropriate party to bring this lawsuit, will be fully briefed by May 12, 2017, before the law is set to become effective. However, there are several other issues to be resolved as part of the lawsuit. The City’s decision to stay enforcement of the pending law until all issues are resolved is intended to help employers and employees avoid confusion during the pendency of the lawsuit.

Although the City of Philadelphia will not enforce this law in the interim, employers with any operations in Philadelphia should review their interviewing and hiring practices in case the lawsuit is decided in favor of the City. Further, employers in Massachusetts and New York City will also be subject to similar restrictions on inquiring about an applicant’s salary history when those laws go into effect. Massachusetts’ law is scheduled to become effective in July 2018, and New York City’s law will become effective 180 days after Mayor de Blasio signs the law, which may occur as soon as this week.

A new post on the Management Memo blog will be of interest to many of our readers in the financial services industry: “‘A Day Without’ Actions – How Can Employers Prepare?” by our colleagues Steven M. Swirsky and Laura C. Monaco of Epstein Becker Green.

Following is an excerpt:

[T]he same groups that organized the January 21, 2017 Women’s March on Washington – an action participated in by millions of individuals across the county – has called for a “Day Without Women” to be held on Wednesday, March 8, 2017. Organizers are encouraging women to participate by taking the day off from paid and unpaid labor, and by wearing red – which the organizers note “may be a great act of defiance for some uniformed workers.”

Employers should be prepared to address any difficult questions that might arise in connection with the upcoming “Day Without Women” strike: Do I have to give my employees time off to participate in Day Without events? Can I still enforce the company dress code – or do I need to permit employees to wear red? Can I discipline an employee who is “no call, no show” to work that day? Am I required to approve requests for the day off by employees who want to participate? As we explained in our prior blog post, guidance from the National Labor Relations Board’s General Counsel suggests that an employer can rely on its “lawful and neutrally-applied work rules” to make decisions about granting requests for time off, enforcing its dress code, and disciplining employees for attendance rule violations. An employer’s response, however, to a given employee’s request for time off or for an exception to the dress code, may vary widely based upon the individual facts and circumstances of each case. …

Read the full post here.

Our colleagues Brian W. Steinbach and Judah L. Rosenblatt, at Epstein Becker Green, have a post on the Heath Employment and Labor blog that will be of interest to many of our readers in the financial services industry: “Mayor Signs District of Columbia Ban on Most Employment Credit Inquiries.”

Following is an excerpt:

On February 15, 2017, Mayor Muriel Bowser signed the “Fair Credit in Employment Amendment Act of 2016” (“Act”) (D.C. Act A21-0673) previously passed by the D.C. Council. The Act amends the Human Rights Act of 1977 to add “credit information” as a trait protected from discrimination and makes it a discriminatory practice for most employers to directly or indirectly require, request, suggest, or cause an employee (prospective or current) to submit credit information, or use, accept, refer to, or inquire into an employee’s credit information. …

Read the full post here.