Labor & Employment Law Update

There have been several significant labor and employment developments under the Trump Administration this quarter. Here is what you need to know:

EEO-1 Report

On August 29, 2017, the Trump Administration issued an immediate stay of the new pay data collection aspects of the EEO-1 Report. Pursuant to federal regulation, the EEO-1 Report is an annual filing requirement for all private sector employers with 100 or more employees, and some federal contractors with 50 or more employees. Historically the EEO-1 Report has included workforce data on race, ethnicity, and gender by job category. However, late during the Obama Administration a second component was added to the reporting requirements of covered employers, which would have required including aggregate data on pay ranges and hours worked to the EEO-1 Report. March 2018 would have been the first time employers were required to submit the new data. The suspension of this new requirement is good news for employers, particularly larger employers, who will not be required to collect and submit the additional pay data in 2018. This stay also gives the U.S. Equal Employment Opportunity Commission (“EEOC”) additional time to consider and address employers’ privacy and confidentiality concerns relating to compensation data, and ensure the additional information is not unnecessarily burdensome on employers. The remaining portion of the 2017 Report is still due March 31, 2018.

FLSA Update

A few days later, on August 31, 2017 a federal judge in Texas officially concluded that the recent exemption rule for overtime pay eligibility under the Fair Labor Standards Act (“FLSA”) is invalid. This decision, which stemmed from a lawsuit brought forth last year challenging a new rule from the Obama Administration, would have doubled (to around $47,000 per year) the salary under which workers must be paid to qualify for the overtime exemption. The Department of Labor dismissed its appeal at the Fifth Circuit on September 5, 2017, ending the matter for now. This ruling is good news for employers who had already taken action in response to a court injunction blocking enforcement of the rule last year. On July 25, 2017, the Department of Labor published a Request for Information (“RFI”) regarding the white-collar exemptions. The RFI solicited feedback on questions related to the salary level test, the duties test, inclusion of non-discretionary bonuses and incentive payments to satisfy a portion of the salary test, the salary test for highly compensated employees, and automatic updating of the salary level tests.  We will continue to monitor any changes to the FLSA exemption rules and will provide updates as they become available.

Scope of Title VII

On October 4, 2017, Attorney General Jeff Sessions reversed the then-existing position of the Department of Justice (“DOJ”), which had previously extended Title VII’s protections to include discrimination based on an individual’s gender identity, including transgender status. The position of the DOJ moving forward will be that “Title VII’s prohibition on sex discrimination encompasses discrimination between men and women but does not encompass discrimination based on gender identity per se, including transgender status,” Sessions wrote.

The text of Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, and national origin. On December 15, 2014, a memorandum issued by Attorney General Eric Holder under the Obama Administration, reversed then-current DOJ policy, extending Title VII protections to prohibit employment discrimination based on gender identity. 

The recent memorandum from Sessions moves the DOJ position back in line with former policy, however, the EEOC, the primary agency charged with interpreting Title VII, has argued that because claims of sexual orientation discrimination “necessarily involve impermissible consideration of a plaintiff’s sex, gender-based associational discrimination, and sex stereotyping,” they fall “squarely within Title VII’s prohibition against discrimination on the basis of sex.” Further, the Attorney General’s memorandum does not preempt prior court decisions holding that employment bias based on an individual’s transgender status is a form of unlawful sex discrimination under Title VII. For example, the United States Courts of Appeals for the First, Sixth, and Eleventh Circuits have all issued such rulings. Moreover, several states have anti-discrimination law that bars employment discrimination based on gender identity. 

Notwithstanding the DOJ’s new position, the best way for employers to avoid liability for discrimination is to review their current policies and practices to ensure they are treating transgender employees the same as their similarly situated, non-transgender co-workers.

Employers are encouraged to consider how these recent legal updates might impact their employment policies and practices. If you have any questions on this topic or need assistance, please contact our Labor & Employment Law Practice Group. We encourage you to subscribe to our Labor & Employment E-Briefs to get the latest HR news, tips, and updates.