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Posts Tagged ‘Salary’

City of Cincinnati Joins Growing Number of States and Local Governments To Adopt Salary History Ban

Posted on: April 1st, 2019

By: Bill Buechner, Jr.

On March 13, 2019, the City of Cincinnati, Ohio adopted an ordinance prohibiting employers within the City of Cincinnati with 15 or more employees from inquiring about an applicant’s salary history (current or prior wage, benefits or other compensation) either on an application or during an interview. The ordinance also prohibits employers from relying on the salary history of an applicant in deciding whether to offer employment to an applicant or to determine the salary, benefits or other compensation for the applicant during the hiring process. The ordinance does not apply to any unit of local, state, or federal government except for the City of Cincinnati. The ordinance becomes effective in March 2020.

The City of Cincinnati’s adoption of its salary history ban is just the latest in an emerging trend of states and local governments prohibiting inquiries into the salary history of applicants. Since the beginning of 2019 alone, bans on inquiries into an applicant’s salary history have either been adopted or taken effect in Connecticut, Hawaii, Illinois, Michigan, the City of Atlanta and now the City of Cincinnati. A total of 11 states, Puerto Rico and 12 local governments have adopted some version of a ban on inquiries into an applicant’s salary history. Some bans apply only to city or state departments or agencies (New York, New Jersey, Illinois, Michigan, Pennsylvania, Atlanta, Chicago, Louisville, New Orleans, Kansas City and Pittsburgh), whereas other bans apply to public and private employers alike (California, Connecticut, Hawaii, Massachusetts, Oregon, Vermont, Puerto Rico, San Francisco, New York City, Philadelphia, Albany County NY, Suffolk County NY and Westchester County NY). Some bans prohibit not only inquiries into salary history, but also reliance on any salary information inadvertently obtained (including information voluntarily provided by the applicant), whereas other bans only prohibit inquiries into salary history. Some bans have been adopted via statute, ordinance or resolution, whereas other bans have been adopted via an executive order. The purpose of these bans is to eliminate the cycle of pay discrimination on the basis of sex that may be perpetuated by employers’ reliance on an applicant’s salary history either in making hiring decisions or pay decisions for new hires.

Bucking the trend outlined above, Michigan and Wisconsin passed statutes that went into effect in 2018 prohibiting local governments from adopting salary history bans. Also, a federal judge issued an injunction in 2018 enjoining enforcement of Philadelphia’s ban on inquiries into the salary history of applicants on First Amendment grounds. That decision, however, upheld Philadelphia’s prohibition against employers relying on an applicant’s salary history information in making hiring and pay decisions.

Each salary history ban has its own nuances and exceptions. Accordingly, employers with operations in a jurisdiction that has adopted a salary history ban in some form should consult with their employment counsel concerning what conduct is prohibited and modify their application, interviewing, hiring and pay practices as needed. Employers with operations in multiple jurisdictions (some of which may have a salary history ban) should consider whether it is prudent to follow one set of rules in jurisdictions that have adopted a salary history ban and another set of rules in jurisdictions that have not, or whether it makes more sense to adopt a uniform practice throughout the organization not to inquire about or rely on an applicant’s salary history in making hiring and pay decisions.

If you have any questions or would like more information, please contact Bill Buechner at [email protected].

Department of Labor Unveils Its Long-Awaited Proposed Overtime Rule

Posted on: March 11th, 2019

By: Brad Adler

On March 7, 2019, the U.S. Department of Labor (DOL) released its long-awaited proposed rule that would revise the white collar overtime exemption regulations.  In its proposed rule, the DOL proposed raising the minimum annual salary for exempt status from $23,360 to $35,308 (an increase in the weekly rate from $455 to $679).  This is a significantly smaller increase than the increase that had been adopted by the DOL in 2016 ($47,476 per year) while President Obama was in office.  Of course, a court blocked that increase from taking effect.

Like the 2016 final rule, the DOL’s new proposal would allow employers to satisfy up to 10% of the $35,308 minimum salary requirement by the payment of nondiscretionary bonuses, incentives and commissions.  Notably, however, while the 2016 rule required that the bonuses be paid at least quarterly, the new proposal contemplates that they can be paid annually (or more frequently if desired).  Specifically, employers would have one catch-up period at the end of a 52-week period to make up any shortfall in the employee’s salary to bring it up to the required minimum.

As a result of this proposed provision, the employer could pay the employee a guaranteed minimum salary of $611.10 per week (90% of the weekly salary) and, if bonus and incentive compensation do not bring the person up to the minimum salary level by the end of the year, the employer would have one chance to make up the difference.

In addition to increasing the minimum salary, the DOL also proposed increasing the minimum annual compensation to qualify for the FLSA’s “highly compensated employee” exemption, from $100,000 to $147,414 (of which, at least $679 per week must be paid on a guaranteed salary or fee basis).

The public will have 60 days to submit comments on the proposed rule, but the rule ultimately is expected to take effect on January 1, 2020.

If you have any questions or would like more information, please contact Brad Adler at [email protected].

Keeping A Watchful Eye On The FLSA Storm (And Hurricane Florence Too)

Posted on: September 14th, 2018

By: Brad Adler & Koty Newman

Hurricane season has arrived.  So, what are employers to do if they would like to keep their offices open, but employees do not want to work during the storm in the areas affected by the hurricane?

  1. What Are The Rules On Payment Of Exempt Employees’ Salaries?

Generally, if salaried exempt employees perform any work during the workweek, they must be paid their full salary for that workweek, regardless of the number of hours or days that the employee worked.  Thus, if a salaried exempt employee performs any work during the workweek and decides to evacuate the day or days that the hurricane makes landfall, that employee generally still must be paid his or her full salary for that workweek.

There are exceptions to the general rule, particularly if the employer’s office remains open and the exempt employee misses an entire day, but it is important to talk with your legal counsel before deducting from the employee’s salary in such a situation.

  1. What Are The Rules On Payment Of Non-Exempt Employees?

Generally, hourly employees need only be paid for the hours that they actually work.  Thus, if an hourly employee calls out or decides to skip the day that a hurricane comes to town, the employer does not have to pay the hourly employee for that day.

  1. How Does PTO Come Into Play For Absences Associated With A Hurricane?

If an employee misses work because of a hurricane, the employee can utilize PTO so the absence is paid.  Even if an employee who misses work because of a hurricane doesn’t want to use PTO, an employer can force the use of PTO.  That is particularly significant in dealing with an exempt employee who misses a part of a day.  For instance, if an exempt employee leaves work after working 2 hours, an employer can require the employee to utilize 6 hours of PTO for the remaining hours missed that day.

  1. Can An Employer In North Carolina Require Its Employees To Work Through A Hurricane And Can It Fire An Employee Who Fails To Come Into Work?

Unless there is a federal evacuation order, the legality of requiring an employee to show up to work depends on the state law that applies to the situation.

In North Carolina, aside from the impact on morale, we think it creates a legal risk for an employer to terminate an employee for failing to appear at work if that employee is under an evacuation order in response to an oncoming hurricane.  Although North Carolina is an at-will employment state, an employer may not terminate an employee in North Carolina for a reason that contravenes public policy.  See Coman v. Thomas Mfg. Co., 325 N.C. 172, 175 (1989).  The Court in Coman stated that it is the public policy of North Carolina “that the safety of persons and property on or near the public highways be protected.”  Id. at 176.

In fact, Coman proceeded to state that:

[w]here the public policy providing for the safety of the traveling public is involved, we find it is in the best interest of the state on behalf of its citizens to encourage employees to refrain from violating that public policy at the demand of their employers.  Providing employees with a remedy should they be discharged for refusing to violate this public policy supplies that encouragement.

Id. Thus, because requiring employees to show up to work during a hurricane while an evacuation order is in effect could necessarily involve them driving unsafely on the roads, depending on the situation, an employer could be subject to a wrongful termination suit for terminating employees who refuse to appear at work during the hurricane.  Although the plaintiff in Coman was a truck driver, the case still provides a basis for a disgruntled employee to sue his/her employer if the employer chooses to terminate the employee for his/her absence at work during an evacuation order.

Moreover, apart from the safety of the roads, in dealing specifically with mandatory evacuation orders, the power of counties, municipalities, and the governor to issue voluntary and mandatory evacuation orders appears in North Carolina General Statutes §§ 166A-19.30 and 166A-19.31.  The refusal to obey a mandatory evacuation order is a Class 2 misdemeanor in North Carolina.  See N.C.G.S. § 14-288.20A.  Consequently, requiring an employee to come in to work when that employee is under a mandatory evacuation order is requiring the employee to break the law as it appears in the North Carolina General Statutes, and, thus, very likely violate public policy.

If you have any questions or would like more information, please contact Brad Adler at [email protected] or Koty Newman at [email protected].

Do You Like Piña Coladas? What Questions Can An Employer Ask in Light of Recent Bans on Requests for Salary History Information?

Posted on: October 31st, 2017

By: Laura S. Flynn

Massachusetts, Delaware, Oregon, California, New York City, Philadelphia and San Francisco have passed laws banning employers from asking applicants about their salary history. The intent behind the legislation is to discourage perpetuation of the gender wage gap. Many employers are unclear as to what they are allowed to ask potential employees.

Generally, an employer can ask an applicant about their expectations in regard to salary, benefits, bonuses and/or commission structures. An employer can inform the applicant of the anticipated salary range for the position. While an employer cannot ask about prior W-2s or earned commissions, they can ask about gross sales or revenue. In California, employers are allowed to ask about any financial benefits an applicant would have to forego in order to take the new job, such as unvested equity or a future bonus. An employer can also ask about competing or counter-offers. In addition to inquiring about skills and prior level of responsibility, the questions asked of an applicant should seek information relating to objective indicators of work productivity. For example, an applicant for a legal position could be asked about her billable hours, her average billable rate, number of trials, and information regarding her client base. The salary history bans may prevent employers from hiring employees at below market rates. However, the anticipated decrease in pay disparities will likely result in an overall economic gain for employers, as the discovery of pay disparities by employees negatively impacts morale, can cause productive employees to leave, and can subject an employer to charges of gender discrimination.

If you have any questions or would like more information, please contact Laura Flynn at [email protected].