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Caroline Burnett is a Knowledge Lawyer in Baker McKenzie’s North America Employment & Compensation Group. Caroline is passionate about analyzing trends in US and global employment law and developing innovative solutions to help multinationals stay ahead of the curve. Prior to joining Baker McKenzie in 2016, she had a broad employment law practice at a full-service, national firm. Caroline holds a J.D. from the University of San Francisco School of Law (2008) and a B.A. from Brown University (2002).

We may be on the verge of pay equity and transparency requirements for federal contractors and subcontractors. On January 30, 2024 the Federal Acquisition Regulatory Council (FAR Council) issued proposed rulemaking that would, if finalized in its current form, require a significant change in recruiting and hiring practices for some contractors.

The FAR Council’s rule would:

  1. Require covered contractors to implement new compensation disclosure requirements in job announcements for certain positions, and
  2. Prohibit covered contractors from requesting or considering applicants’ compensation history when making employment decisions.

The public has until April 1, 2024 to submit comments. We will be tracking this proposed rule as it continues to develop. 

This is just the most recent development in the nationwide wave of state (e.g. California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, New Jersey, New York, Ohio, Rhode Island and Washington) and local (e.g. Cincinnati, Jersey City, New York City and others) pay transparency regulation our team has chronicled on our blog–see our most recent update on the District of Columbia’s new legislation here. Recently, there has also been litigation in various jurisdictions (e.g. Washington and New York City) seeking to enforce pay transparency regulations that are already on the books. 

Potentially broad application

In its current form, the proposed rule would have broad application, covering both prime contractors and subcontractors performing a government contract or subcontract within the United States (including its outlying areas). The FAR Council states that it contemplated limiting application of the requirements to certain contracts but ultimately did not go that way since “[t]he benefits of the pay equity and transparency requirements in this proposed rule are equally impactful in commercial and noncommercial settings as well as to large or small dollar contracts.”

The proposal defines “work on or in connection with the [government] contract” as “work called for by the contract or work activities necessary to the performance of the contract but not specifically called for by the contract.” The Council “encourages” contractors to apply its provisions “to other positions, including to the recruitment and hiring for any position that the Contractor reasonably believes could eventually perform work on or in connection with the contract.”

Both requirements apply only to “applicants,” defined as a “prospective employee or current employee applying for a position to perform work on or in connection with the [government] contract.”Continue Reading Federal Contractors May Soon Be Required To Disclose Salary Ranges in Job Postings, And Prohibited From Seeking Applicant Salary History

We are pleased to share a recent SHRM article, “EEOC General Counsel: Anti-Discrimination Damages Caps Are Too Low,” with insights from our own JT Charron. Million-dollar jury verdicts in equal employment opportunity cases sometimes mask large cuts in final judgment due to federal caps on compensatory and punitive damages. Karla Gilbride, the EEOC’s general

The US Supreme Court’s SFFA decision ending affirmative action in higher education continues to have ramifications for corporate America. Attacks to workplace DEI are gaining momentum with targeted challenges from a variety of angles, not the least of which are those coming from conservative advocacy groups filing lawsuits, requesting agency investigations and pursuing other complaints. Just last week, as many prepared to watch Taylor Swift’s boyfriend perform in the Super Bowl, America First Legal (a nonprofit founded by a former adviser to Donald Trump) filed an EEOC complaint against the NFL challenging the Rooney Rule, a widely used hiring practice that emanated in the NFL and is followed across corporate America. For in-house counsel, this just further emphasizes the need to continue to diligently monitor the changing DEI landscape for signals warranting targeted audits or adjustments to workplace DEI programming.

When should in-house counsel take action? Let’s start to answer that question by looking at where we are now and the escalation of events in the past 7 months.

Timeline of Recent Material Attacks on Workplace ID&E

July 2023 | Letter to Employers from 13 State AGs

Thirteen attorneys general used SFFA to support their opposition to corporate DEI programs (see letter to Fortune 100 CEOs here). In response, attorneys general from other states wrote to the same CEOs stating that SFFA “does not prohibit, or even impose new limits on, the ability of private employers to pursue diversity, equity, and inclusion.”Continue Reading Is The Risk Calculus Related To Workplace DEI Shifting For US Employers This Election Year?

Special thanks to co-authors Thomas Asmar, Victor Flores, Denise Glagau, Christopher Guldberg, Jen Kirk, Maura Ann McBreen, Lindsay Minnis, Kela Shang, Aimee Soodan and Brian Wydajewski.

As many readers likely know, last fall California doubled-down on the state’s hostility to noncompete agreements. Assembly Bill 1076 codified the landmark 2008 Edward v. Arthur Andersen decision that invalidated all employment noncompetes, including narrowly tailored ones, unless they satisfy a statutory exception.
   
AB 1076 also added new Business & Professions Code §16600.1, requiring California employers to notify current (and certain former) employees that any noncompete agreement or clause to which they may be subject is void (unless it falls within one of the limited statutory exceptions).

Individualized written notice must be sent by February 14, 2024 or significant penalties may apply.Continue Reading Don’t Miss California’s Noncompete Notice Requirement (Deadline 2/14/24) |Review Equity Award Agreements & Other Employment-Related Contracts ASAP

Combining the views of 600 senior in-house lawyers at multinational companies across four continents with the insights of Baker McKenzie experts in tax, employment and antitrust, the 7th Edition of our Global Disputes Forecast helps in-house counsel see around corners as they prepare for 2024. The forecast includes detailed predictions for disputes involving ESG, cybersecurity

Tracking and complying with federal, state, and local wage and hour requirements has long been top of mind for employer as wage and hour liability continues to be one of the most expense employment law risks. Indeed, in 2022, the 10 largest reported settlements for wage and hour actions totaled $574 million.

Currently, in

DC is the first jurisdiction in 2024 to join the likes of many states (including California, Colorado, Connecticut, DC, Hawaii, Illinois, Maryland, Nevada, New York, Rhode Island and Washington) in requiring pay transparency in job postings. 

On January 12, 2024, Mayor Muriel Bowser signed the Wage Transparency Omnibus Amendment Act of 2023. If the Act survives the 30-day period of review by Congress (as required under the District of Columbia Home Rule Act), it will go into effect June 30, 2024. 

The Act will apply to employers with at least one employee in DC.

New Requirements

Covered employers must provide the minimum and maximum projected hourly or salary pay in all job listings, as well as a description of the position. Employers will also be required to disclose the existence of healthcare benefits to prospective employees before the first interview. Further, in line with several states that have passed salary history ban laws, employers will be prohibited from screening applicants based on their wage history, or seeking the wage history of a candidate from a former employer.  Finally, employers will also be required to post a notice in their workplaces notifying employees of their rights under the Act. This notice must be posted in a conspicuous place, in at least one location where employees congregate.  Continue Reading New Year, New Rules in DC: This January the District of Columbia Joins the Pay Transparency Club

Illinois employers navigated an avalanche of new laws in 2023, with more on the horizon in 2024 (and even 2025). New paid leave obligations for Illinois (and Chicago and Cook County) employers are a significant change, and additional developments expand employer liability in some circumstances where individuals are victims of gender-related violence. There are also new obligations for employers who use temporary employees, and increased protections for striking workers–not to mention a soon-to-be requirement for employers to include pay scale and benefits information in job postings starting January 1, 2025.

Here are key updates that Illinois employers should be aware of for 2024–and beyond.

1. New paid leave laws in Illinois, Chicago and Cook County

Employers in Illinois, Chicago and Cook County have new paid leave obligations for 2024 under three new laws:

  • The Illinois Paid Leave for All Workers Act (PLAWA) (effective January 1, 2024) requires Illinois employers to provide most employees with a minimum of 40 hours of paid leave per year to be used for any reason at allnot just for sick leave.
  • The Cook County Paid Leave Ordinance (effective December 31, 2023, the sunset date of the prior Cook County Earned Sick Leave Ordinance) covers employees who work in Cook County and largely mirrors the PLAWA. The Cook County Commission on Human Rights will begin enforcement of the paid leave Ordinance on February 1, 2024.
  • The Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (effective July 1, 2024) will require covered employers to provide eligible employees 40 hours of paid sick leave and 40 hours of paid leave (the latter usable for any reason) per 12-month accrual period, for a total entitlement of up to 80 hours of PTO per 12-month period.

Importantly, under both the PLAWA and the Cook County Paid Leave Ordinance:

  • Eligible employees earn 1 hour of paid leave for every 40 hours worked, up to a minimum of 40 hours in a 12-month period (with exempt employees presumed to work 40 hours per workweek for accrual purposes, but leave accrues based on their regular workweek if their regular workweek is less than 40 hours)
  • Though unused accrued paid leave from one 12-month period can be carried over to the next, employers can cap the use of paid leave in one 12-month period to 40 hours
  • Frontloading is permitted, and employers who frontload 40 hours at the beginning of the 12-month period are not required to carry over unused accrued paid leave
  • Employers cannot require employees to provide a reason they are using paid leave, or any documentation or certification as proof or in support of paid leave

The Chicago Paid Leave Ordinance diverges from the PLAWA and the Cook County Ordinance in several ways, including:

  • Covered employees will accrue one hour of paid sick leave and one hour of paid leave for every 35 hours worked-five hours less than what is required to accrue an hour of paid leave under the PLAWA or Cook County Ordinance
  • Employees may carryover up to 80 hours of paid sick leave and up to 16 hours of paid leave from one 12-month accrual period to the next
  • Employers may frontload 40 hours of paid sick leave and 40 hours of paid leave on the first day of the 12-month accrual period. Frontloaded paid leave does not carry over from one 12-month period to the next (unless the employer prevents the employee from having meaningful access to their PTO), but up to 80 hours of unused paid sick leave does
  • Employers with more than 50 employees in Chicago are required to pay the employee the monetary equivalent of unused accrued paid leave when an employee separates from the employer or transfers outside of the City of Chicago (see chart below for specifics)
  • Unlike in the PLAWA or Cook County Ordinance, unlimited PTO is specifically addressed in the Chicago Paid Leave Ordinance (so employers with unlimited PTO policies should review the Ordinance closely)

Continue Reading A Legislative Snowstorm: Key 2024 Updates for Illinois Employers Include a Number of New Leave Obligations and More

In late breaking news out of New York, Governor Kathy Hochul has vetoed legislation that would have imposed the most restrictive state-level ban on employee non-competes in the United States. Last June, the New York State Assembly passed S3100, which if signed by Governor Hochul, would have voided any contract restraining anyone from engaging in a