Equal Pay: The Rate of Pay

Equal Pay: The Rate of Pay

How do you measure equal pay?  Is it the employee’s base salary?  Or is it the employee’s total compensation?

A recent Fourth Circuit case, Sempowich v. Tactile Systems Technology, Inc., answered this question. In Sempowich, a female employee and her male peer were both paid a base salary and also earned commission income based on sales. The male employee was paid a higher base salary in 2015, 2016, and 2017 (even though he had less seniority and lower performance review scores). However, Ms. Sempowich’s total earnings in 2016 and 2017 were more than the male employee’s because she received more in sales commissions.

When she sued, the district court used her “total wages” as the metric for determining wage discrimination under the Equal Pay Act. Because Ms. Sempowich had earned more in total wages in those two years, the court dismissed her Equal Pay Act claim.

Ms. Sempowich appealed and argued that the proper measurement was the “rate” at which her employer paid her—the base salary.

The Fourth Circuit agreed—based on the text of the Equal Pay Act. The statute says an employer may not “discriminate … between employees on the basis of sex by paying wages to employees … at a rate less than the rate at which he pays wages to employees of the opposite sex.” 

This statutory language says nothing about “total wages.” Instead, it focuses on the wage rate. Here, Ms. Sempowich’s base salary was lower than her male peer’s base salary. So, she was paid at a rate lower than her male peer. Because of that, the Fourth Circuit found that the district court erred in dismissing her claim.

To drive home this conclusion, the Fourth Circuit used a hypothetical to demonstrate why total pay cannot be the proper point of comparison. Assume a company pays a woman $10 per hour and a man $20 per hour. If total wages is the measure of pay, the company would not violate the Equal Pay Act if the woman earned more than the male employee—even though she would have to work twice as many hours to do so. A woman should not have to work twice as many hours to make the same money.

That makes sense. A company cannot say it pays its employees equally if one employee has to work twice as many hours to make the same money. Likewise, that a female employee earned more in commissions than her male peer should not mean that her employer did not discriminate against her by paying her a base salary lower than her male peer.

This seems to be a common-sense conclusion. Unfortunately, it was not to a district judge in North Carolina. Fortunately, the Fourth Circuit caught and fixed this error.

Pay issues can be tricky, but the rate of pay is the starting point for any pay discrimination analysis—not total pay. It is good to have clarity on that point.

 

 

The Chicken or the Egg?

The Chicken or the Egg?

One of the most frustrating things right now for job seekers is that employers are screaming they cannot find enough employees.  Yet, thousands of well-qualified people remain unable to find a job. 

Why?

The reasons are many, including biases. For example, age discrimination is real.  During the pandemic, it has gotten worse as many older employees lost jobs, and they have found it very difficult to replace the lost jobs. 

Another stubborn (and less publicized) bias is the bias against the unemployed. 

One common saying is that it is always easier to find a new job while you have a job.  Sadly, that is true.  Many companies screen out people who have been unemployed for six months or more for unknown reasons.  There is no good reason to screen out the entire unemployed out of work for six months just automatically.  That reflects all kinds of bias.  For example, it screens out people who have taken time out of the workforce to raise a family. It screens out people who may need to take time off for a serious health condition or care for family members with a serious health condition.  As those people try to go back to work, they hit the brick wall of bias against the unemployed.

A new area getting a lot of attention right now is artificial intelligence in the hiring process.  Most job search boards and many large companies use artificial intelligence and algorithms to help screen the job applications they receive.

While AI is undoubtedly a helpful tool for companies to use in screening applicants, it can create many problems.  Applicants have to figure out the “magic” word that will cause the AI to catch their resume or job application.  If an applicant does not use just the right word to trigger a hit, a human will never see that application.

Because the AI is programmed to look for certain experience levels, it does not catch the strong applicants out there who do not have the perfect match in terms of experience sought but could still be excellent employees if given a chance and a bit of training. Intangible skills don’t necessarily translate well to AI.

Unfortunately, research shows that bias can permeate the algorithms used by those AI tools.  This may cause discrimination against all kinds of protected groups.  For example, years ago, Amazon had to scrap a recruiting tool it had designed to screen resumes for top talent.  When it tried to use the tool, it found the AI screened out qualified women because the algorithm was based on ten years of patterns in resumes submitted to the company.  Because most of those resumes came from men (due to the pattern of male dominance in the tech industry), the system did not rate candidates in a gender-neutral way and had to be tossed.

A company can run tests on the algorithms it uses in job screening to search for bias, but many companies do not do that.  However, it sounds like it would be smart for companies to do so.

One of the next waves of litigation will be the challenge of such biased tools in hiring.  Smart companies will make sure their AI can—and has—passed the tests against bias before that wave hits.

Though AI can save time, it’s clear it can never replace the human touch.  Humans are so much more than words on a piece of paper screened electronically.  Sometimes it takes a little time and effort—and luck—to find the perfect person for the role.  I’d like to see all candidates get a fair chance at jobs with eliminating bias—particularly the bias against the unemployed.  What a great world that would be.

Employment and the Computer Fraud and Abuse Act

Employment and the Computer Fraud and Abuse Act

If you are lucky, you will go through your entire life without knowing what the Computer Fraud and Abuse Act (“CFAA”) is or how it applies to employment law.

In recent years, the issue of what types of claims exist against an employee who left (or got fired from) a job and either took or retained company documents or electronically stored information of their former employer has become quite a hot-button issue. Some aggressive employers sued former employees under the CFAA if they learned that an employee still possessed confidential information obtained from a company computer. They argued that the employee accessed a company computer without authorization to obtain information violated the CFAA.

The CFAA creates a civil remedy where a party can sue for damages if a person intentionally accessed a computer without authority and obtained data from that computer that caused a loss. Besides civil damages and attorneys’ fees, this statute also has criminal penalties.

Companies would sue a former employee who had obtained data from a company computer system while employed but who then kept that data to assist the employee in his or her lawsuit. The companies argue that the use of the information was not authorized and violated the CFAA. The companies then sue for damages and attorney’s fees. Because the statute authorized statutory penalties and attorneys’ fees, a violation could subject the former employee to a large liability.

Earlier this year, however, the Supreme Court finally ruled on a criminal case involving the CFAA. However, this opinion impacts employment law. The issue in Van Buren v. United States was whether a police officer violated the CFAA to log into a law-enforcement database. The police officer used valid credentials to log into the database, but he did so for non-law enforcement purposes. He violated his department’s policies. But did he violate the CFAA?

According to the Supreme Court, no. The CFAA makes it illegal for a person to obtain information from a computer system without authorization. However, the CFAA does not make it illegal for someone—who may have improper motives—to access a computer system to obtain information otherwise available to that person. So, if you are authorized to access a computer system, you do not violate the CFAA when you do so—even if you are doing it for an improper reason.

In the employment context, this ruling removes a weapon from a company’s arsenal. A company can no longer sue an employee for allegedly violating the CFAA if the employee legally obtained company information by accessing a computer system while the employee still had the authorization to do so.

Now, if the employee accesses parts of the computer system that the employee does not have the authorization to access, then the answer is different. The employee could face CFAA liability for that. However, if an employee gets information from a computer system while the employee has authority to access that system, then the employee no longer faces the risk of a CFAA claim.

Again, in a perfect world, few employees will ever know what the CFAA is and how it might affect their employment. However, this ruling protects employees who gather information while working for a company that might support a future claim against the company. So long as the employee had the authority to access the computer system, the employee should not be accused of violating the CFAA.

This Supreme Court ruling takes one possible risk off of employees who want to sue a former employer.  

Fix the Problem The First Time

Fix the Problem The First Time

When you know about a pay disparity, fix it before you get told by a court to fix it.

Too often, a company knows of pay disparities between male and female employees.  Yet, the company does not fix the pay disparities—usually arguing there is no money in the budget.

However, years of costly litigation to address pay discrimination may not be in the company’s budget either.

A recent Sixth Circuit case demonstrates the risk that a company takes in refusing to fix pay disparities.  In Briggs v. University of Cincinnati, 11 F.4th  498 (6th Cir. 2021), Lee Briggs, an African American male, was a Compensation Analyst.  The University later hired a Caucasian female as a Compensation Analyst.  Despite having no prior compensation experience, she was paid over $9,000 more than Briggs.

The Director of Compensation knew of the pay disparity but did not immediately correct it for budget reasons.

However, the Director of Compensation later asked the Chief Human Resources Officer for an equity adjustment to Briggs’ pay.  The CHRO’s response was only “we’ll see.”  In a follow-up meeting, she told him, “I’ll think about it.” Over two years later, nothing had been done to close the pay gap.

In a good reminder that men too can bring an Equal Pay Act claim, Briggs filed a Charge of Discrimination and sued under the Equal Pay Act and Title VII.     

The University defended its pay disparity for several reasons, including (1) the female demanded the higher salary as a condition of accepting the job and (2) that the female’s performance reviews were higher.

The Sixth Circuit made short shrift of the salary demand argument. It said:  “No authority supports the concept that an employee’s prior salary or demand for a specific salary is sufficient in isolation to justify a wage differential.  Such a rule would simply perpetuate existing sex-based pay disparities and undercut the purpose of the Act—to require that those doing the same work receive the same pay.”

As for the higher performance reviews, the court said the employer had to show it actually used the performance review scores in setting the pay.  Here, it did not. 

That argument was further undercut by the Director of Compensation testifying he knew there was a pay gap when he hired the female and hoped to close it when the budget permitted.

What is the moral of this story?  When you see a pay disparity, find the money to fix it.  Here, the $9,000 salary increase would have been far cheaper for the University than years of litigation. Plus the fact that litigation of this kind gets the attention of other employees and may lead to additional pay discrimination claims.

The Sixth Circuit reversed the grant of summary judgment and remanded Briggs’s case for trial. So the University is in for more expensive litigation.

Do the right thing the first time.  Fix the problem when you discover it.  The University of Cincinnati did not, and it is paying far more in litigations costs for that mistake than it would have taken to fix the pay disparity.

Stay tuned.

Get The Shot Or Get Fired?

Get The Shot Or Get Fired?

President Biden issued an Executive Order compelling companies with more than 100 employees to require all employees to be vaccinated or provide proof of weekly negative COVID-19 tests. This also applies to smaller companies that are federal contractors. 

While this order creates many legal questions for companies, the most pressing decision employees must make is whether to get the shot or be fired. 

Though there are exceptions to a vaccine mandate, most employees likely do not fit within either of the exceptions. The two main exceptions deal with ADA disability accommodations and accommodations for sincerely held religious beliefs. 

 ADA Issues

 If a disability prevents you from getting the vaccine, you may request to be excused from getting the vaccine as a “reasonable accommodation” under the ADA. 

 However, be prepared to prove that you do have a medical condition that will prevent you from getting it.  Expect your employer to verify that you really do have a disability that will prevent you from getting the vaccine. 

 A company is not going to just take your word for it. Nor should it.  Because going unvaccinated can put others in danger, a company is well within its rights to request medical information to verify that you do have a disability when it considers your ADA reasonable accommodation request. That proof will need to be more than just saying, “my doctor said I should not get it.”

 Sincerely-Held Religious Beliefs

 Some employees request an exemption from the mandatory vaccine requirement because a sincerely held religious belief prevents the employee from receiving the vaccine. 

 Generally, this is a small part of the workforce population.  However, in recent weeks, it has expanded rapidly, with many websites starting to pop up offering “advice” to employees on how to seek this accommodation or even selling pastoral “notes” to employees.

 If you ask for a religious accommodation, know that you must show that you have a sincerely held religious belief. Be prepared to identify the specific religion.  Be prepared to explain why this sincerely held religious belief requires accommodation.

Companies are already wise to employees who “suddenly” claim to hold sincerely held religious beliefs that prevent them from getting the vaccine.

One popular request for an accommodation addresses that the vaccine was developed (in part) using fetal stem cells. Many employees claim that fact prevents them from getting vaccinated.

One employer is pushing back. It requires its employees to verify and attest that they do not take any medication or vaccine developed with the use of fetal stem cells.  This includes very popular and commonly used medicines such as Tylenol, Pepto-Bismal, Aspirin, Ibuprofen, Ex-Lax, Benadryl, and Claritin. That company wants to know how committed the employees are to the sincerely held religious belief.  If the employee takes any of those medications, an argument can be made that the employee is not necessarily all that committed to the belief.

If you intend to ask your company for religious accommodation, be prepared for questions about your request.  

If it makes you mad to provide evidence of a disability or a sincerely held religious belief, think about why your employer is asking for it.  Remember, companies owe a duty to their other employees and customers to provide a safe environment. 

If you don’t want to do support your accommodation request, you may walk with your feet. You do not have to continue to work for a company that requires you to be vaccinated.  You can quit. 

If you don’t want to quit, please remember that your company is trying to balance its duties owed to other employees and customers.  It is going to take all of us working together to get through this pandemic.  Do your part to keep everyone safe.