The Equal Employment Opportunity Commission has outlined six priorities in its new Strategic Enforcement Plan, and employers may need to revisit their HR policies to avoid litigation.
"The EEOC is taking the view that they have limited funds, so they're going to try to be more strategic and more integrated between offices and almost have a national law enforcement sort of model so they can deploy their resources more effectively," says Barry Hartstein, a shareholder in the Chicago office of law firm Littler Mendelson, and co-chair of its hiring and background check practice.
The agency has a renewed and heightened focus on "systemic issues," says Hartstein, which is anything "that could be viewed as a pattern or practice or a policy that applies to a broad group of employees in a company that is viewed as discriminatory in nature."
He cautions that employers need to tread carefully. "The EEOC has stated in no uncertain terms that they're going to be aggressive in this area in their investigation efforts, in the type of information they're asking for, and so employers need to take care in this area right now," he says. "Even a simple individual charge, where an employer may think it's no big deal, could have far more significant implications, particularly if it deals with a policy-related issue the EEOC determines may be broad-based and discriminatory in nature."
Hartstein offers insight on the six priority areas identified by the EEOC:
1. Hiring and recruiting
While there was an enormous amount of play last year on criminal background checks and screening tools that may block people out of the hiring process, the EEOC's focus is really more broad-based than that, notes Hartstein. "It could be any other sort of screening tool or any policies by a company that may be viewed as discriminatory in nature," he says.
For example, "right now there are lawsuits by the EEOC involving credit, based on credit history, as well as class actions based on criminal history." Employers should also anticipate that any pre-employment testing or other employment screening practices will be closely scrutinized to determine whether they improperly screen out minorities or those covered under the Americans with Disabilities Act.
Hartstein acknowledges this is not a new area for the EEOC, but the agency has "been bringing more and more large sexual harassment cases against companies. If you have patterns of harassment, you can expect them to be bringing major lawsuits," he says, adding that it's not just sexual harassment employers need to be aware of. The largest EEOC settlement last year was for $11 million and involved a claim of racial harassment.
3. Emerging and developing issues
Under this priority, the EEOC will focus on "ADA issues of reasonable accommodation, qualification standards, undue hardship - all related to disability," says Hartstein. As well, pregnancy and LGBT discrimination issues fall under this umbrella.
4. Equal pay
When President Obama was elected in 2009, his first big piece of legislation was the Lilly Ledbetter Fair Pay Act, "so, clearly, equal pay is something that's important to this administration," says Hartstein. "We're going to see more cooperative efforts not just among [EEOC] offices but between [other government] agencies." For example, "right now, if you're a government contractor, equal pay is a very significant focus when they are audited by the Department of Labor. We're starting to see more sharing of information between the agencies."
5. Immigrant and vulnerable workers' rights
Farm work has been highlighted, where "individuals are brought in under unfavorable conditions or harassing conditions," says Hartstein. The EEOC is interested in protecting the rights of "what they view as highly underpaid workers. They're vulnerable workers; they don't understand their rights or may not necessarily be aware of their rights."
6. Preserving access to the legal system
This priority involves "looking at things like employer agreements and releases and waivers to ensure those are not necessarily broad," says Hartstein. "As an example, one area the EEOC has identified is if employers have in release agreements this notion that you have no right to be rehired at any future date. Some EEOC offices have expressed that they feel that's retaliatory in nature. The employer community takes strong exception to that, and we'll probably see some litigation on that."
Agencies remain aggressive about pay equity enforcement
Although the Lilly Ledbetter Fair Pay Act now is four years old and the Paycheck Fairness Act has been reintroduced in Congress, a wide pay gap still exists nationally. While PFA legislation has little chance of passing the Republican-controlled House, according to Jones Day partner Alison B. Marshall, she warned employers to remain vigilant about pay equity.
"The administrative agencies are not sitting back; they're pressing ahead," Marshall said recently in Washington, D.C., at the Society for Human Resource Management's 2013 Employment Law & Legislative Conference. Despite congressional inaction on fair pay, she said federal officials at the Office of Federal Contract Compliance Programs and Equal Employment Opportunity Commission are "looking at these bills that are introduced, and [are incorporating] pieces of them" into compliance regulations.
The agencies are beefing up pay equity enforcement, in many cases being proactive about guidance and regulations and not waiting for new laws. No charge needs to be filed before the EEOC launches an investigation into fair pay, Marshall warned. In addition, the agency, as part of President Obama's task force on the issue, already is implementing pilot projects to audit employers near New York, Chicago and Phoenix.
"They're [saying to employers], 'We'd like to come and meet with you about your compensation practices,'" Marshall said, adding that the EEOC has investigative authority regarding employers' compensation practices, and officials are well within their bounds to issue a request for information. "If you fail to produce it," she said, "they can go the subpoena route."
Obeying the Equal Pay Act - a 1963 amendment to the Fair Labor Standards Act prohibiting employers from gender discrimination when paying wages - is not necessarily the same thing as obeying Title VII, which prohibits employment discrimination more broadly, Marshall said. Compliance in both areas requires constant vigilance, as disparities may exist across geographic locations or between contractors and employees, she noted.
The most important compliance practice employers can conduct is launching pay equity studies, comparing internal findings against market data, according to Marshall. She also recommends reviewing manager training under the compensation system. "Anything that would affect that compensation," is a factor, Marshall said, including opportunities for work that can lead to higher pay.
Beware counteroffers used to retain high-valued workers, for instance, that could create a bad comparator for a lawsuit.
-by Tristan Lejeune
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