“Hiring Hazard” – NY City Employers May Soon Be Prohibited From Asking Applicants About Salary Histories

This post was written by Barbara E. Hoey and Allison Gottlieb and originally posted on Kelley Drye’s Labor Days blog.

On April 5, 2017, the New York City Council approved a bill which – once signed by the Mayor (a virtual certainty) – will prohibit private employers in the City from asking about, relying on, or verifying a job applicant’s salary history. Proponents of the bill argue that this will help to close the wage gap for women.

This bill follows an executive order signed by Mayor DeBlasio in November 2016, which prohibits New York City agencies from inquiring about the pay histories of job applicants for city positions.

Closing the wage gap is a laudable goal, but this bill will clearly make hiring more difficult.  Indeed, when combined with other City laws that prohibit background checks (the Fair Chance Act) and asking about “employment status” – one begins to wonder – what can a prospective employer ask a job applicant?

It is also notable that this bill amends the New York City Human Rights Law, and thus creates a new claim for any disgruntled applicant to now file, which can be pursued at the City Commission on Human Rights, or directly in court. As with other New York City Human Rights Law violations, an employer found to have violated this law could be liable for compensatory damages, punitive damages, and attorneys’ fees and costs. Additionally, if an employer is found to be acting “willfully” or “maliciously,” it may be slapped with a civil penalty of up to $250,000.

Thus, this is an area where employers will need to tread very carefully.

The Bill

The bill prohibits employers from “inquiring about” an applicant’s salary throughout the entire employment process, including when making an offer of employment or during contract negotiations.

The bill even prohibits employers from searching publicly available records to obtain an applicant’s salary history.

So, how do you legally hire and how do you understand an applicant’s salary expectations?  You need to look carefully at the exceptions which the law creates:

(1) An employer may consider an employee’s salary history if the applicant makes a voluntary and willing disclosure.

(2) An employer may discuss salary, benefits and other compensation expectations with the employee as long as the employer does not inquire about salary history.

(3) Further, the definition of “salary history” does not include any “objective measure” of the applicant’s productivity, such as revenue, sales, or other production reports.

The bill also excludes: (1) employers acting pursuant to a law authorizing the disclosure or verification of salary history for employment purposes, (2) current employees applying for internal promotions or transfers, or (3) public employee positions for which compensation is determined pursuant to procedures established by collective bargaining.

So, what do you do?

This is not a law – yet – and will not be a law until 6 months after it is signed by the mayor.  So, you have some time to get ready for it.

Here are some ideas:

  • Review – Start by reviewing your applications, background check documents, and hiring procedures to remove any questions explicitly seeking information about an applicant’s salary history.  This includes a review of any information you may request via online portals.
  • Train – It is essential to inform not just Recruiting and those in HR, but everyone who gets involved in the interview process, to refrain from directly questioning applicants about their salary histories.
  • Inform contractors and vendors – You need to communicate this information to third parties or outside vendors who participate in the hiring process, such as placement firms, temp agencies and recruiters.
  • Look at your online presence – if you are posting on job sites like Monster, etc, make sure there are no requests for salary information on those sites.

The overall takeaway is that while the new law does make it unlawful to request salary information, there are lawful ways that you can talk about salaries during the interview process, just as long as you do not demand or “prompt” the disclosure of the applicant’s salary.  You can explain the salary you are offering and ask if that is acceptable.  If an applicant discloses that it is lower than a current salary that is a voluntary disclosure.

The trick will, of course, be “proving” that disclosure was “voluntary,” especially if you decide not to hire that applicant.  It may be a good idea to ask any applicant who does volunteer salary information to sign a form acknowledging the disclosure was voluntary.  There is nothing in the bill that precludes such a ‘waiver’ form, and it would protect the company from claims or provide a clear defense to a claim.  This would have to be handled carefully to make sure that an applicant does not feel they are under duress.

The Mayor is expected to sign the bill soon. Once signed, the bill will become effective 180 days later.

The Incipient Storm of Stymied Standard Shortcuts for OSHA?

In September 2016, the U.S. Circuit Court of Appeals for the District of Columbia decided that a 2015 OSHA interpretation letter regarding the scope of the Process Safety Management (“PSM”) exemption for the agricultural retailers, was a standard subject to “notice and comment” requirements. So, what does this mean for OSHA?

Well, this landmark decision will allow for some exploration into questions of agency interpretation regarding standards and employers can now challenge OSHA interpretations if they do not follow the traditional rulemaking steps. Historically, OSHA issued letters of interpretation in response to questions from employers or unions seeking clarification, but in recent years the agency has used these guidance and interpretation letters to side-step the Occupational Safety and Health Act (“OSH Act”) rulemaking processes that are costly and time consuming procedures and evidentiary requirements. Employers complained mightily about OSHA’s use of interpretations that looked and felt like new regulatory requirements and they didn’t like how these new requirement would suddenly appear on OSHA’s website with no notice or opportunity to comment. So, big win for OSHA-regulated employers. Although some employers probably will wish this handy regulatory shortcut remained available for President Trump and his deregulatory agenda.

Seventh Circuit Rules Title VII Bars Sexual Orientation

This post was written by Janine N. Fletcher and Matthew C. Luzadder and originally posted on Kelley Drye’s Labor Days blog.

On April 4, 2017, the Seventh Circuit became the first federal appellate court in the country to extend the protections afford by the Civil Rights Act of 1964 to discrimination on the basis of sexual orientation.  The 8-3 decision came after they held a rare en banc hearing on Kimberly Hively’s case (Hively v. Ivy Tech Community College).

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Trump Administration Clamping Down on Regulatory Activity with Controversial “One-In, Two-Out” Order

The Trump Administration has made an effort to clamp down on regulatory activity by his executive branch, issuing an executive order directing agencies to repeal two regulations for each one rule they issue (“one-in, two-out”) and instructing that any new regulations finalized this year must have an incremental cost of zero.[1]  President Trump seeks to rein in the regulatory process in order to reduce the burden of rules on businesses.

However, the executive order has already been challenged. On February 8th in the U.S. District Court for the District of Columbia, the Natural Resources Defense Council, the Communications Workers of America, and Public Citizen filed a joint complaint, seeking to prohibit implementation of the order and the White House Office of Management and Budget’s (“OMB”) February 3rd guidance on the policy. In the complaint, the plaintiffs argue that these regulation-restricting provisions clash with the Occupational Safety and Health (“OSH”) Act’s mandate to craft standards based on threats to worker safety. Additionally, the complaint argues that the executive order and guidance are “arbitrary and capricious” due to their focus on rules’ costs and not on their benefits to Americans. The plaintiffs claim that the “one-in, two-out” requirement will lead to a noticeable increase in the number of rules withdrawn from OMB consideration, since compliance with a new regulation is more expensive than the year-to-year costs of complying with current policy.

[1] Exec. Order, Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs, available at https://www.whitehouse.gov/the-press-office/2017/01/30/presidential-executive-order-reducing-regulation-and-controlling.

Employers Earn an Important Victory in “Union Walk-around” Lawsuit

On Friday, February 3, a federal judge in Texas denied (in part) a motion to dismiss a lawsuit challenging an OSHA Standard Interpretation Letter (known as the “Fairfax Memo”) that contains policies for safety walk-arounds.  The Fairfax Memo permits employees to designate third parties as their representatives in OSHA worksite inspections.  NFIB argued that the memo authorizes union recruiters to enter workplaces against employer’s wishes, and is illegal because it violates the Administrative Procedures Act (“APA”) and exceeds OSHA’s statutory authority.

The OSH Act gives OSHA the right to inspect workplaces, and also gives an employee the right to have a representative present at a workplace inspection. 29 U.S.C. § 657(e).  Shortly after passage of the Act, OSHA promulgated through notice and comment a rule interpreting the Act’s employee representative provision.  29 C.F.R. § 1903.8(c); see 36 Fed. Reg. 17,851 (Sept. 4, 1971). 

While 29 C.F.R. § 1903.8(c) requires that the employee representative be an employee of the employer, it also permits a third party who is not an employee of the employer, “such as an industrial hygienist or a safety engineer,” to participate in the inspection if, in the judgment of the Compliance Safety and Health Officer, it is “reasonably necessary” to the conduct of an effective and thorough physical inspection of the workplace.

In February 2013, then-Deputy Assistant Labor Secretary Richard Fairfax issued the memo in response to an inquiry from a union official about whether a worker at a workplace without a collective bargaining agreement could authorize a person affiliated with a union or community organization to act as a representative.  The memo concluded that the worker could authorize a person affiliated with a union or a community organization to act as his representative based this on an interpretation of the “reasonably necessary” standard for permitting third parties at walkarounds.  According to the memo, a nonemployee representative is a reasonably necessary third party when he “will make a positive contribution” to an effective inspection.  Continue Reading

Standard for Workplace Violence in the Healthcare and Social Service Industry?

In response to calls from labor groups and unions to develop federal standard that addresses workplace violence in the healthcare and social service sectors, former OSHA chief David Michaels stated during a January 10 meeting that OSHA found that there is ample evidence showing workplace violence is a rampant issue, and that OSHA will work towards establishing a standard. OSHA’s then deputy assistant secretary, Jordan Barab, held an optimistic outlook for the chances of the rule’s development, even in the deregulatory environment of the Trump administration.

In their July 12 petition for a standard, labor groups and unions argued that the OSH Act’s General Duty Clause, an enforcement mechanism requiring companies to maintain safe workplaces, is ineffectual in preventing workplace violence. Bureau of Labor Statistics (“BLS”) data showing an increase in workplace violence during recent years reflects this conclusion, they argued.  The January 10 meeting served as the impetus for OSHA to pursue a standard, and OSHA is currently seeking public comment on a December 7 request for information (“RFI”) that closes on April 6.  Although OSHA officials are uncertain whether the agency can identify the factors that cause violent incidents, labor representatives disagree.

The Obama Administration’s grant of the nursing and labor groups’ petition is seen as a strategic decision on behalf of the Obama Administration to create a legal pathway to sue OSHA should the Trump Administration decline to pursue the standard. In a January 17 interview, Jordan Barab stated that the next step in establishing the workplace violence standard would be to analyze the potential impacts of the rule on small businesses through an advisory committee under the Regulatory Flexibility Act.  Additionally, although the Trump Administration could slow-roll the rule development process for this standard, labor interests have some hope that the ongoing RFI could provide information and momentum for states to pursue their own rules preventing workplace violence.

Labor interests are seeking an OSHA workplace violence standard that contains:

  • Requirements for employers to assess risk factors for workplace violence and to involve workers who treat patients directly.
  • Training and procedure requirements for post-incident care, including workers who provide healthcare in home settings.       Employers would also be required to develop plans that mitigate risks on job sites.
  • Requirements that are enforceable.

That is, if the deregulation-focused Trump Administration moves forward with developing the workplace violence standard.

Ready, Set, Post! Your OSHA Form 300As

Here’s your friendly reminder from your pals at Not Safe For Work: It’s time to post your OSHA Form 300A! The OSHA Form 300A log summarizes job-related injuries and illnesses that occurred during 2016, and most employers are required to post it in a common area where notices to employees are usually displayed. Employers must do so at some point between February 1 and April 30 each year.  Classes of employers that do not have to display the summary log include those with 10 or fewer employees and those in certain low-hazard industries, which are exempt from OSHA recordkeeping and posting requirements.  For more information, please visit OSHA’s Recordkeeping Rule webpage.

Delay Under the Priebus Memo

The Trump Administration has now taken leadership in the executive offices, and with this transfer of power comes the traditional memorandum halting the regulatory actions of the previous Administration. White House Chief of Staff Reince Priebus issued a memorandum directed to agency heads (“the Priebus Memo”), detailing a series of regulatory prohibitions and requirements for already-issued rules that include OSHA’s beryllium rule and EPA’s Risk Management Plan (“RMP”) safety regulation.  Additionally, there are several OSHA rules that have been finalized but that have compliance dates that have yet to occur; these rules could be delayed either by the Priebus Memo or by other Trump Administration actions.  The Priebus Memo specifies that a Trump official must approve regulations prior to an agency official’s submission of a notice or rule to the Federal Register for publication.  Also under the umbrella of this approval requirement are any sort of actions that could lead to a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking.  The Priebus Memo has the effect of slowing or potentially even halting a number of the regulatory initiatives that the Obama Administration attempted to push through in its final weeks.

The Priebus Memo mandates that:

  • Any unpublished regulations already sent to the Federal Register should be withdrawn for Trump Administration review and approval.
  • Agencies are required to postpone by 60 days the effective date for published rules that have not yet taken effect.
  • To delay the effective date for regulations beyond the 60-day period, agencies should consider proposing the rule for notice and comment.
  • Agencies may notify the Director of the Office of Management and Budget (“OMB Director”) if they find that a particular regulation should be excluded from the Trump Administration approval requirement due to “critical health, safety, financial, or national security matters, or for some other reason.” The OMB Director will determine whether an exclusion is appropriate.

The End of Perp Walks?

For the past two weeks, we here at NSFW have been looking to the OSHA website to bring you the latest victims of the agency’s Perp Walks . . . to find that none have been published since January 19. Could the newly entered Trump Administration be the reason why no Perp Walks have been posted?  Is OSHA under an order barring external communication, similar to what Trump has put into place at the Environmental Protection Agency and other departments as the changeover in leadership occurs?  Will Perp Walks continue once Trump, who aims to decrease regulation and assist business, settles into his authority in the executive branch?  Only time will tell, and we’ll be sure to keep you informed.

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