Gender pay gap and pay equity are big discussion topics for companies around the world as more and more countries enact laws intended to close the gender pay gap and as case law develops involving discrimination claims related to pay equity. Beyond strictly legal obligations, many companies also face shareholder and employee pressure for increased transparency around diversity and gender pay.
Join us at 3:00 pm Thursday, January 24 for our California Employment & Compensation Update in our new Los Angeles office. A range of topics will be covered during our program which will begin with a panel discussion addressing emerging trends in advancing corporate Diversity & Inclusion goals, followed by your choice of updates on California employment law issues or on global share plan developments. After the program, we invite everyone to join for cocktails and hors d’oeuvres at Javier’s Century City.
Hope to see you there!
If you have employee headcount in Canada, be sure to catch up on the top 10 developments from 2018 . . .
- Legalization of recreational marijuana. Across Canada, the legalization of recreational cannabis has had a significant impact on employers, requiring them to implement changes to their workplace policies and procedures. The legalization of recreational marijuana has placed a spotlight on issues resulting from current technological limitations of testing for “current impairment”, and has required employers to adapt to the idea of a controlled substance that is legal for both recreational and medicinal use.
- Ontario introduces, and largely reverses, major workplace legislation reforms. Ontario’s Bill 148, the Fair Workplaces, Better Jobs Act, 2017,introduced a wide range of changes to workplace legislation, including increases to minimum wage, paid vacation, and protected leave time, as well as new “equal pay for equal work” requirements. A majority of these changes came into force in 2018. However, on November 21, 2018, the new provincial government reversed most of these changes under Bill 47, the Making Ontario Open For Business Act, 2018.
- Alberta implements major reforms to workplace legislation. The Alberta legislature passed comprehensive amendments to its workplace legislation, most of which took effect on January 1, 2018. These changes were enacted through Bill 17, the Fair and Family-friendly Workplaces Act; and Bill 30, An Act to Protect the Health and Well-being of Working Albertans, including enhanced leave and vacation entitlements, the implementation of a new administrative penalty system under the Employment Standards Code, the expansion of “card-based certification” for new unions, and other changes to legislation regarding occupational health and safety and workers’ compensation.
- Major changes to Quebec’s workplace legislation. In 2018, the National Assembly of Quebec made significant changes to the province’s workplace legislation under Bill 176, An Act to amend the Act respecting labour standards and other legislative provisions mainly to facilitate family–work balance. Changes include expanded leave entitlements, the inclusion of “sexual harassment” as a form of psychological harassment, the prohibition of any distinction based solely on hiring date in relation to pension plans or other employment benefits, and changes to directors and officers liability.
- British Columbia initiates workplace legislation reform. In June of 2018, BC’s Employment Standards Act Reform Project Committee issued recommendations for amendments to British Columbia’s Employment Standards Act, including enacting the right to refuse overtime in circumstances where overtime would conflict with certain family commitments, changes to overtime averaging requirements, and enhanced leave entitlements. On October 25, 2018, the BC government released the report of the Labour Relations Code Review Panel, recommending several amendments to the Labour Relations Code, including shortening the time between the filing of an application for certification and the certification vote, expanding remedial certifications, and expanding the statutory freeze period. It is very likely that these recommendations will give rise to substantial changes to BC’s workplace legislation in 2019.
- Ontario’s Pay Transparency Act, passed and put on hold. On May 7, 2018, Ontario’s former provincial government enacted Bill 3, An Act respecting transparency of pay in employment. The Pay Transparency Act was set to take effect on January 1, 2019, requiring Ontario employers to publish a salary rate or range in all publicly advertised job postings, prohibiting employers from asking candidates about their past compensation, and eventually requiring employers to post pay transparency reports online. However, Ontario’s new provincial government passed legislation on December 6, 2018, effectively placing the Pay Transparency Act on hold. It is likely that the Pay Transparency Act will be significantly amended or repealed by the new Ontario government in 2019.
- Ontario’s Police Record Checks Reform Act. As of November 1, 2018, Ontario legislation established three standard types of police records checks in Ontario, and set a procedural framework for executing the checks. This legislation is helpful in reducing the likelihood that unnecessary information will be disclosed to employers during the police record check process, and will reduce the confusion that has resulted from having different police record check processes administered in different regions across Ontario.
- Asset purchasers free to offer employment on new terms. On August 2, the Supreme Court of Canada refused leave to appeal the decision in Krishnamoorthy v Olympus Canada Inc, 2017 ONCA 873. In that case, the Ontario Court of Appeal ruled that, when a business’ assets are sold (as opposed to its shares), and the purchaser offers new employment to that business’s employees under different terms and conditions, the resulting employment contracts are generally enforceable, assuming they comply with employment standards legislation. In other words, new offers of employment in the context of an asset sale are fundamentally distinct from new offers of employment in the context of a share purchase, where the enforceability of amendments are often unenforceable for lack of “fresh consideration”.
- Two Ontario Court of Appeal cases give rise to further uncertainty regarding the enforceability of termination clauses. In Amberber v. IBM Canada Ltd., 2018 ONCA 571 and Nemeth v. Hatch Ltd., 2018 ONCA 7, the Ontario Court of Appeal sought to clarify and limit the contractual language threshold for ousting the common law entitlement to reasonable termination notice. These cases will strengthen the employer’s enforceability argument in many cases. However, it continues to be difficult to resolve apparent inconsistencies in the case law, and to predict what will occur in the litigation of each particular case.
- Increased legal scrutiny for benefits plans that make age-based distinctions at age 65. In Talos v. Grand Erie District School Board, 2018 HRTO 680, the Human Rights Tribunal of Ontario concluded that the applicant had been discriminated against on the basis of age as a result of the statutory exception that permitted the elimination of his benefits when he reached the age of 65. The HRTO therefore determined that Mr. Talos’ rights under s. 15(1) of the Charter had been infringed. Furthermore, the HRTO held that, although the financial viability of benefits plans was a pressing and substantial objective, the government’s decision to legislate the statutory exception was not justified because it was not necessary to preserve the financial viability of benefits plans. This case strongly suggests that the statutory exception will be the subject of further litigation, and that benefits plans that make age-based distinctions for employees after reaching the age of 65 will now be subject to serious legal scrutiny.
Many thanks to Jordan Kirkness and Massimo Orsini for this article.
With thanks to Barbara Klementz for authoring this post.
2018 was, without a doubt, another extraordinary year for US employers. The #MeToo movement continues to have a tremendous impact on the workplace. In addition, the thorny issue of how to manage contractor classifications in the gig economy continued to evolve and new DOJ enforcement activity is heightening concerns about no-poaching agreements and other antitrust activity. In 2019, employers will confront a host of new laws in 2019 on topics ranging from sick leave, lactation accommodation, salary history inquiries and much more.
Our 2018/2019 Digest is a fantastic resource to help you navigate the changes ahead and chart your course for 2019.
Click here to download the full Digest.
In the wake of the #HeForShe movement, California recently became the first US state to require companies to put female directors on their corporate boards.
Supporters of the law make a convincing business case for gender diversity, citing rigorous research findings showing companies where women are represented at board or top-management levels are also the companies that perform best financially. Beyond the business case however, there is also a sense that increased representation is critical to discussions and decisions affecting corporate culture and ensuring workplace respect and dignity.
Now is the time to focus on building a strong corporate culture of equality and respect. California is advancing a trend started in Australia and a number of European countries in recognizing the importance of gender-balanced corporate boards. Germany, Italy and the Netherlands all have initiatives in place to boost corporate board representation.
California just became the first state to require companies to put female directors on their boards.
“Given all the special privileges that corporations have enjoyed for so long, it’s high time corporate boards include the people who constitute more than half the ‘persons’ in America,” Governor Jerry Brown wrote in signing Senate Bill 826 into law on September 30. The legislation appears sparked by recent debates around sexual harassment, workplace culture and gender equality, and it comes less than one year after Brown signed the state’s salary history ban.
Since January 1, 2018, California law has prohibited employers from asking applicants about their salary history. Earlier this month, Governor Jerry Brown signed AB 2282 into law to clarify several aspects of the salary history ban.
Originally published by Bloomberg Law.
Pay equity is a hot button issue for employers in the United States for a number of reasons—reputational concerns are triggered with increasing shareholder demands for transparency; activist investor groups are pushing companies, particularly in the financial services and technology industries, to disclose gender pay data; and, in the wake of pay equity in the news, employees are asking more questions about the issue.
Compounding the pressure, the gender pay gap also can impact talent acquisition. A recent Glassdoor survey found that 67% of US employees say they would not apply for jobs at employers where they believe a gender pay gap exists. The impact is magnified when looking at millennials. Approximately 80% of millennials, as noted in the Glassdoor survey, say they would not even apply for a job if they believed the company had a gender pay gap, which drives home the point that focusing on equality is, among other things, essential for a positive employer brand in the US market.
Click here to read on.
On June 20, our partners Bill Dugan and Meredith Kaufman presented to the New York City chapter of the ACC on Minding the (Gender Pay) Gap. Along with two in-house counsel panelists, Meredith and Bill discussed strategies for complying with equal pay protections under state and local laws and narrowing the pay gap.
One clear theme of the panel discussion was that pay equity cannot be viewed in a vacuum. As Meredith explained:
With equal pay protections expanding, it’s a critical time for clients to identify and rectify unjustified pay disparities between men and women. An effective remediation plan may include salary increases, but employers also need to address systemic bias and harassment to root out pay inequality.
Another takeaway was the importance of maintaining the attorney-client privilege when conducting pay audits. Bill noted:
We regularly undertake pay audits, including an in-house analysis of data, for our clients. Conducting these audits under privilege allows us to identify potential exposure and advise on strategies to reduce legal risk, while protecting the analysis from disclosure as much as possible.
For more on how Baker McKenzie is assisting clients with their gender pay and pay equity compliance, please visit our Gender Pay Gap webpage.