As 2018 draws to a close, proactive employers are looking to the New Year and identifying opportunities to stay ahead on compliance issues and exploring ways to avoid exposure from new laws and trending claims. Indeed, between the continued momentum of the #MeToo movement, and new state and local laws, employers have much to consider in 2019. As always, awareness and preparation will make the difference between companies that thrive and grow in this new regulatory environment and those that face set-backs.
Oregon Equal Pay Act Takes Effect
Starting January 1, 2019, Oregon’s updated equal pay legislation takes effect, meaning that applicants and employees will be able to file claims under the new expanded version of the law. Of course, state and national law has long prohibited employers from discriminating against women and minorities on the basis of pay, however the new law adds additional protected classes, rules and penalties.
Of course, employees in the same job, who are performing work of comparable character, may be paid differently, so long as the difference can be explained by an existing system incorporating qualifying reasons for pay disparities. Acceptable basis for pay distinctions include merit, seniority, earnings, quality or quantity of production, work location, education, training or experience or any combination of the above.
Employers may protect themselves from exposure by performing an equal pay analysis of their workforce. Oregon’s Bureau of Labor and Industries (“BOLI”) recently issued guidance on aspects of this law, but it declined to clarify what would constitute a proper “equal pay analysis.” In any event, employers are encouraged to engage counsel and evaluate their present pay structure systems to confirm that disparities can be justified and defended through legally adequate documentation.
Predictive Scheduling
On January 1, 2019, employees may bring a private cause of action and BOLI may pursue charges against employers under the Fair Work Week Act, better known as “predictive scheduling.” Predictive scheduling requires that covered employers provide employees with advanced notice of their work schedule or the employer may face penalties. Covered employers will also be required to provide a good faith estimate of employees’ work schedules, including median number of hours expected to work in an average month and information about voluntary standby and on-call shifts.
Importantly, these new regulations are limited to employers with 500 or more employees worldwide in retail, hospitality or food services. The law only applies to non-exempt (i.e. traditionally hourly) employees. Employers will also not be penalized if employees exchange shifts among themselves.
Workplace Harassment
It is hard to believe that a triggering moment of the #MeToo movement was only one year ago, with the publication of the New York Times Article exposing years of Harvey Weinstein’s sexual misconduct. Since that watershed moment, countless celebrities and executives have been held to account for allegations of sexual misconduct in the workplace. Despite the barrage of stories and media, many companies and executives report that they have not made any changes to their workplace culture to better understand or address potential issues.
Simple steps to improve workplace culture and proactively avoid claims are not out of reach. They include updating trainings and policies to address the realities of today and encouraging discussion of the more common and subtle issues that may arise. We should also re-think sexual harassment policies that contain complex legalese and jargon for more simple principles that can be easily remembered and incorporated into practice for daily guidance.
Arbitration Agreements
In a series of historic decisions this year, the U.S. Supreme Court held that employers and employees have great latitude in structuring their employment agreements, including the ability to contract for the arbitration of any disputes that may arise in the employment context. Further, in submitting to arbitration, employees may also agree to waive any potential class action claims. These decisions open the door for a significant expansion in the use and acceptance of arbitration agreements in the employment context, and employers should consider whether arbitration agreements are a good option for their workplace.
Nondisclosure Agreements and Tax Deductions
A lesser known provision of the federal Tax Cuts and Jobs Act passed in late 2017 was to increase the tax cost of companies that settle sexual harassment or sex abuse claims subject to non-disclosure or confidentiality agreements. The law now disallows a business deduction for the amounts paid to settle such claims (including attorneys’ fees) if the settlement contains a nondisclosure agreement. While the intent of the law is clear — to prevent companies from benefiting under the tax code when hiding misconduct, in practice experts believe its application and scope is uncertain. Most likely, only precedent and time will clarify many of the outstanding issues and questions that remain.
With sweeping new state laws, and an ongoing discussion regarding important national issues like sexual harassment, employers have much to consider in the coming year. Employers needing assistance or guidance with any of these new measures are encouraged to reach out to qualified employment counsel.
Anthony Kuchulis is an attorney with Barran Liebman LLP. He advises and represents employers in regard to a wide range of employment and labor law issues. Contact him at 503-276-2199 or akuchulis@barran.com
