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As we head into 2023, all eyes are on salary and pay range requirements in US job postings — where these laws apply, what they require, and when they come into effect.

In this latest video, our Labor & Employment lawyers explain what employers need to know about US laws requiring salary and pay range disclosures in job postings including important differences from location to location, questions and concerns, and practical takeaways.

While the trend has continued, the landscape has drastically changed since we shared our May 2022 video, The Proliferation of Pay Transparency Laws. Consider this your update!

Click here to watch the video.

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The New York City Department of Consumer and Worker Protection (DCWP) has granted New York City employers a happy holiday, indeed. The Department just announced it will delay the enforcement of its automated employment decision tools law (Local Law 144 of 2021) until April 15, 2023, and is planning a second public hearing due to the high volume of public comments.

Why is this good news for New York City employers?

Until the announcement, New York City employers who use artificial intelligence in employment decision-making were faced with new requirements beginning January 1, 2023–including a prohibition against using automated employment decision tools (AEDTs) unless they took a number of specific steps prior to doing so, not the least of which would be conducting a bias audit of their AEDTs. (See our prior video chat Artificial Intelligence in Recruitment and Hiring: Checking Your Blind Spots, where we discussed Local Law 144 and other recent AI laws employers should be aware of.)

Specifically, Local Law 144 requires employers to: (1) subject AEDTs to a bias audit within one year of its use; (2) ensure that the results of such audits are publicly available; (3) provide particular notices to job candidates regarding the employer’s use of these tools; and (4) allow candidates or employees to potentially request alternative evaluation processes as an accommodation.

What are AEDTs?

Good question. The DCWP proposed rules on September 23, 2022 that would clarify what an AEDT is (as well as expand upon Local Law 144 and regulate the use of AEDTs). Under the proposed rules, an AEDT likely includes any computerized tool or algorithm-based software program used to identify, select, evaluate, or recruit candidates for any employment position.

It may include data-driven tools used to review résumés, rank applicants, “chat” with applicants, assess employee performance and productivity, monitor field-based or remote employees, or determine compensation and promotions. The proposed rules exclude from the definition “analytical tools that translate or transcribe existing text,” e.g., convert a resume from a PDF or transcribe a video or audio interview.

What’s required for the bias audit?

The proposed rules set forth the minimum requirements for a bias audit of an AEDT, which include: (1) calculating the “selection rate” for each race/ethnicity and sex category that is required to be reported to the Equal Employment Opportunity Commission pursuant to the EEO 1 Component report; and (2) calculating the “impact ratio” for each such category. The proposed rules define “selection rate” as the “rate at which individuals in a category are either selected to move forward in the hiring process or assigned a classification by an AEDT,” and “impact ratio” as either: (1) the selection rate for a category divided by the selection rate of the most selected category; or (2) the average score of all individuals in a category divided by the average score of individuals in the highest scoring category.

In addition, the proposed rules indicate that an intersectional analysis (an analysis of the impact rate for ethnicity and sex combined, in addition to each protected category independently) must be conducted.

However, with a delayed enforcement date and the likelihood of a second public hearing, the current proposed rules may be revised. Employers should keep close watch and check back here for developments.

What should New York City employers do now?

There are some steps employers should consider to get a head-start on the enforcement of Local Law 144. Employers using AEDTs within New York City should:

  • Review Local Law 144 and the current proposed rules;
  • Assess what categories of automated tools and technologies the employer uses in its workplace decision-making schemes, and work with counsel to determine how the law applies;
  • Ensure that required notices are effectively provided and that the employer will be able to comply with independent bias audit requirements;
  • Review the employer’s practices regarding data retention; and
  • Work with third-party vendors to ensure their compliance with the new law, as necessary, and make any desired updates to service agreements.

For help preparing for enforcement of Local Law 144 or any of your other employment needs, contact your Baker McKenzie employment attorney.

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The new year always brings new challenges for employers, but California employers in particular face a world of change in 2023.

In our 75-minute “quick hits” format, we help you track what California employers need to keep top-of-mind for 2023 and provide practical takeaways to help you navigate the new landscape.

This webinar helps to keep California in-house counsel up to speed on the top employment law developments of 2022 and to prepare them for what’s on the horizon for 2023.

Among other topics, we discuss:

  • What’s hot right now, including best practices for meeting your obligations under California’s salary and pay range disclosure law (SB 1162), and salary and pay range disclosure trends across the US
  • What employers should know about the landscape of California arbitration agreements, including updates on AB 51 and the Viking River Cruises v. Moriana case
  • How employers can prepare for the California Privacy Rights Act (CPRA) amendments to the California Consumer Privacy Act (CCPA)

Apply our Annual California Employer Update Takeaways Checklist to help your organization’s leadership prepare for some of the most important employment law developments in 2023.

Click here to view the webinar recording.

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In our latest Global Immigration and Mobility video chat, Melissa Allchin provides a year-end review of essential immigration and mobility updates for employers. Melissa highlights equal pay transparency laws and the impact on an employer’s obligations under existing immigration law, COVID-related travel considerations, immigration compliance considerations employers should keep top-of-mind with respect to remote or hybrid work, and the impact on employees’ immigration status when employers restructure or conduct reductions in force.

This video chat is part of our Annual California Employer Update webinar, “Reflecting on 2022 and Strategizing for 2023.” To view the full program click here.

Click here to watch the video.

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Studies show that as many as 98% of CEOs are anticipating a global recession in the next 12-18 months, which means that companies have already started focusing on cutting costs and redistributing resources to best position themselves to survive. One of the largest cost centers on any company’s balance sheet is its workforce. As such, layoffs or other reductions-in-force (RIF) have already started to hit, and will likely continue. What’s different this time around? Because of the ups and downs in the market, and phenomena like the “great resignation” and remote work on a scale never seen before, there is a greater likelihood that more employers will find themselves potentially triggering the Worker Adjustment and Retraining Notification Act of 1988 (WARN Act) (and analogous state laws, known as state “mini-WARN acts”) statutes. These statutes impose notice and information obligations, which can be tricky to keep track of, and carry potentially heavy penalties for noncompliance.

What to do?  Employers who see a layoff on the horizon — and even those who may have already undertaken layoffs — should revisit the requirements of WARN (and state mini-WARNs) now, and keep the following “WARN-ings” and practice tips in mind as they work with counsel.

What is WARN and what WARN-ings should companies watch out for?

In short, WARN requires employers to give advanced notice to affected employees in the event of a covered mass layoff or plant closing. Under the federal WARN, employers must provide 60 days’ notice of termination to the impacted employees, union representatives (if applicable), and certain government authorities. Under some state mini-WARN acts, 90 days’ notice is required.

Which employers are covered?

Under the federal WARN Act, covered employers are employers with:

  • 100 or more employees, excluding part-time employees and those with less than 6 months of service in the last 12 months, or
  • 100 or more employees, including part-time employees, who collectively work more than 4,000 hours per week, excluding overtime.

WARN-ing: State mini-WARN acts often have lower thresholds for covered employers.

When is notice required?

Under WARN, covered employers need to provide notice if a triggering event–a “mass layoff” or “plant closing”–occurs.

Mass layoff: A mass layoff is a reduction in force that (i) does not result from a plant closing, and (ii) results in an employment loss at the single site of employment during any 30-day period for:

  • at least 50-499 covered employees if they represent at least 33% of the total active workforce, or
  • 500 or more covered employees.

Plant closing: A plant closing is the permanent or temporary shutdown of a single place of employment or one or more facilities/operating units resulting in an employment loss during a 30-day period for 50 or more covered employees.

How should employers calculate the time frame to determine when WARN notice is required?

WARN always requires aggregating the employment losses that occur over a 30-day period.

WARN also requires aggregation of the employment losses that occur over a 90-day period that did not, on their own, trigger WARN notice, unless the employer can show that the layoffs were the result of separate and distinct causes and are not an attempt to evade WARN.

WARN-ing: Therefore, employers should look ahead and behind 90 days and add up layoffs that have occurred and any planned layoffs to determine whether separate layoffs may trigger notice requirements under WARN.

Continue Reading Employer WARN-ing: Layoffs Could Trigger WARN Notice Requirements this Time Around

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As we wind up 2022 and head into 2023, all eyes are on salary and pay range requirements in job postings. Where these laws apply, what they require, and when they go into effect has been top-of-mind for US employers in 2022.

Here’s what employers need to know now as they navigate the patchwork of existing laws and prepare for 2023.

Checklist of states, counties and municipalities requiring salary and pay range disclosures in job postings

  • California is the latest state to require employers to include pay ranges in job postings. (See our blog, here.) California’s newly enacted pay reporting legislation joins the nationwide push for pay transparency in employment and requires California employers with 15 or more employees to include the salary or hourly wage range of positions in job postings (but not bonus, incentive compensation or benefit information). The California law also requires employers with 100 or more employees to provide additional detail in annual pay data reports already mandated under California law effective May 10, 2023. The California law takes effect on January 1, 2023.
  • Colorado requires employers to disclose the pay, or pay range, of a position in the job posting itself, along with a description of incentive compensation (such as bonus, commissions, etc.) and benefits. The compensation posting requirements do not apply to either (1) jobs to be performed entirely outside Colorado, or (2) postings made entirely outside Colorado (i.e., newspaper job postings). The Colorado law took effect January 1, 2021. (For more, see our blog here.)
  • New York State’s legislation is still pending. The proposed legislation will require salary range disclosures in job postings (see our blog here). Business groups have urged Governor Hochul to tweak the bill before signing it to preempt local pay transparency ordinances (with the exception of New York City’s ordinance) to avoid the patchwork of pay equity laws around the state. If the governor signs the bill, it will take effect 270 days after signature.
  • Washington’s amendment to its Equal Pay and Opportunity Act (see our blog, here) will require disclosure of wage, salary and benefit information in job postings. However, it leaves unchanged a prior requirement that employers provide the same information to employees offered new positions or promotions within the company only when requested. The Washington amendments will go into effect on January 1, 2023.
  • New York City’s salary disclosure law and amendment (see our blog here) requires employers to provide the minimum and maximum salary range (but not bonus, incentive compensation or benefit information) that the employer in good faith believes at the time of posting it would pay for an advertised job, promotion or transfer opportunity for any position located within New York City (or that can be performed in New York City in the case of remote roles). As long as the employer has four or more employees with at least one working in New York City, the law applies. The New York City law became effective on November 1, 2022.
  • Westchester County, New York passed its own pay transparency law which requires employers to include the minimum and maximum salaries for jobs that can or will be performed in Westchester County (in whole or in part) in job advertisements, including for remote positions. However, employers are not required to include salary ranges in job postings only generally indicating an employer is accepting applications without referencing particular positions. The Westchester County law became effective on November 6, 2022.
  • Ithaca, New York enacted a law making it an unlawful discriminatory practice for an employment agency, employer, employee or agent to advertise an opportunity for employment-including a job, promotion or transfer opportunity-without stating the minimum and maximum hourly or salary compensation for the position in the advertisement. The law applies to employers with four or more employees and applies to all positions for which the standard work location is in the City of Ithaca. The Ithaca law became effective on September 1, 2022. (For more, see City of Ithaca Pay Transparency Law FAQs).
  • Jersey City, New Jersey’s pay transparency law applies to employers employing five or more employees with a principal place of business in Jersey City. The law requires employers who provide notice of employment opportunities in print or digital media circulating within Jersey City to include a minimum and maximum “good faith” salary or wage range (including benefits) in job advertisements in the City. The Jersey City law became effective on June 15, 2022.

On the horizon

We expect other jurisdictions to follow suit in requiring salary and pay range disclosures in job postings. Legislation was introduced (but did not advance) in legislative sessions in several jurisdictions earlier this year–and could see light of day in 2023. For instance, US House Bill 6850 was introduced early in 2022, and would have required employers to disclose wage or salary ranges and other forms of compensation reasonably expected to be offered in external or internal job postings. Kentucky and Massachusetts also both introduced legislation requiring pay ranges in job postings in their last legislative sessions. In addition, several states already require the disclosure of such information to applicants and/or employees upon request, and other states may follow suit.

Quick guide of additional steps employers should take now to prepare for this trend

As this trend continues, employers should consult with counsel and:

  • Determine which jurisdictions have salary and pay range disclosure laws affecting their company’s job postings–and whether they have to include pay ranges in postings for positions outside of those jurisdictions, including remote positions,
  • Determine what pay range information is required to be included in job postings,
  • Implement best practices for choosing pay ranges for posting, and
  • Plan how to communicate any changes to their workforce.

For help with strategies to address the varying requirements across jurisdictions or any of your other employment needs, contact your Baker McKenzie employment attorney.

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Special thanks to Tony Haque and Hanna Jung.

In our latest Global Immigration and Mobility Video chat, our attorneys discuss the challenges of employee travel during the upcoming holiday season, with a focus on the United Kingdom, Australia, and the wider Asia Pacific region. The 15-minute video covers immigration complications from the state of COVID restrictions, visa appointment backlogs, and the complexity of international remote working.

Click here to watch the video.

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Studies are showing that around 98% of CEOs in the US and across the EU are preparing for a recession in the next 12-18 months.

With inflation increasing the cost of goods and certain services, some companies may find themselves in an immediate economic bind and needing to engage in cost-cutting methods to reorganize and redeploy the company’s resources in a smarter way as they prepare for a possible recession.

In this Quick Chat video, our Labor and Employment lawyers discuss cost-cutting options employers are exploring without staffing layoffs, what we’re seeing that’s different from the beginning of the pandemic, and some important considerations employers should keep in mind if they engage in cost-cutting.

Click here to watch the video.

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In less than two months, on January 1, 2023, the California Consumer Privacy Act (CCPA) as revised by the California Privacy Rights Act (CPRA) will take effect fully in the job applicant and employment context.

And with respect to job applicants and personnel, businesses subject to the CCPA will be required to (i) issue further revised privacy notices, (ii) be ready to respond to data subject requests, (iii) have determined if they sell or share for cross context behavioral advertising personal information about them, and (iv) have determined if they use or disclose sensitive personal information about them outside of specific purposes. If employers sell, share for cross-context behavioral advertising, or use or disclose sensitive personal information outside of limited purposes, numerous additional compliance obligations apply. See also our related previous post: Employers Must Prepare Now for New California Employee Privacy Rights.

 

Here are some key recommendations on what employers should do now:

1. Review contracts with parties to whom you disclose personal information about applicants and personnel. The CCPA prescribes certain types of clauses that have to appear in agreements between parties exchanging personal information, and you will have to include certain data processing clauses if you do not want to be considered to be “selling” (which the CCPA defines to mean disclosing in exchange for monetary or valuable consideration) or “sharing” (which the CCPA defines to mean disclosing for the purposes of cross-context behavioral advertising) personal information and offer related opt-out processes. It is not practical for employers to offer opt-out rights in most scenarios, due to the CCPA’s non -discrimination requirements. The CCPA regulations, which are currently being revised by the California Privacy Protection Agency (latest draft as of this publication is available here), include additional requirements. Businesses should continue to update such contracts with parties it discloses personal information to.

2. Prepare/revise notices at collection and include HR data in your online CCPA Privacy Policy. At collection notices in the employment context have been required under the CCPA since 2020, but new specific disclosure requirements apply from January 1, 2023. Your comprehensive online CCPA privacy policy will also have to reflect your processing of HR data. You should consider updating/preparing a privacy notice at collection that is specific to the CCPA and separate from any privacy notice you might use to address privacy laws in other jurisdictions, since California laws establish increasingly unique requirements and use unique terms that may be difficult to reconcile with those of other jurisdictions (from January 1, 2023, businesses must use specific terms from the CCPA to describe categories of personal information in all notices at collection). At the same time, you have to be mindful of setting or negating privacy expectations. If you issue privacy notices to job applicants and personnel that merely address CCPA disclosure requirements, the recipients of such notices may develop privacy expectations that could later hinder you in conducting investigations or deploying monitoring technologies intended to protect data security, co-workers, trade secrets and compliance objectives.

Continue Reading California Privacy Law Action Items for Employers

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We are pleased to share a recent Bloomberg Law article, “Employers Await High Court Clarity on Attorney-Client Privilege,” with contributions by Michael Brewer. This article discusses the possible implications the US Supreme Court’s upcoming review of whether attorney-client privilege extends to business-related communications may have for employers and their counsel, who routinely exchange information blending legal and business advice.

Click here to view the article.

Originally featured in Bloomberg Law.