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People Processes: Best Practices for pay equity, and I-9’s

Law firm’s pay equity guidance points to trends — PRACTICE TIP

Acknowledging Equal Pay Day on April 10, Seyfarth Shaw’s Pay Equity Group released a pair of reference guides on pay equity that are aimed at enhancing employers’ compliance efforts: the 2018 Trends and Developments in Pay Equity Litigation Report and the 2nd Annual 50-State Pay Equity Desktop Reference.  From XPERT HR (full report):

The law firm practice group also pointed to several emerging trends:

  • Amped-up pay laws: While California, New York, and Massachusetts led the way in adopting stricter state pay equity laws, other states, including Maryland and Oregon, soon followed suit. The trend continues into 2018 with New Jersey and Washington passing similarly onerous laws in recent weeks. Laws banning employers from asking candidates for employment about prior salary is another trend. Laws have been enacted in nine jurisdictions, and several other states are considering similar salary history bans.

  • Litigation uptick: Not surprisingly, concurrent with these new laws and developments, the Seyfarth Pay Equity Group has seen an increased interest by the plaintiff’s bar in litigation under the federal Equal Pay Act and analogous state laws. The primary targets for this new wave of litigation have been firms in the legal and tech industries. Those cases are already generating new and intriguing law that has the potential to reshape the landscape of pay equity litigation, including whether and how those claims can be maintained as collective or class actions.

  • Federal circuit split on pay factors: Recent cases demonstrate that Federal circuit courts are split on whether prior salary can be used as a factor that justifies differences in pay under the federal Equal Pay Act. On April 9, the Ninth Circuit changed course in an en banc decision and held that an employee’s prior salary does not constitute a “factor other than sex” upon which a wage differential may be based under the statutory “catchall” exception in the federal Equal Pay Act (Rizo v. Yovino). Stay tuned to see this in the Supreme Court.

  • Push towards greater transparency and more structure: The benefit to having more defined pay structures and being more transparent about pay is that it often helps demystify what has long been thought to be a taboo topic. Structure also provides an opportunity to reassure employees about their pay and if they are paid in line with their peers, and helps employers identify any concerns that may have been unintentionally overlooked. Lastly, employers are weighing voluntary or mandatory (like in the U.K.) disclosures about pay. This raises additional concerns and, at the same time, provides additional opportunities. Seyfarth notes that it expects this trend to continue.

Report identifies best practices for I-9 compliance — PRACTICE TIP 

The US Immigration and Customs Enforcement (ICE) is stepping up enforcement efforts of unauthorized workers by tripling its number of officers and quintupling the number of enforcement actions in 2018. As a result, employers need to be proactive and ensure that they are hiring authorized workers and that their Form I-9 practices are in compliance.  Otherwise, employers may be ICE’s next target.

Under the Immigration Reform and Control Act (IRCA), if an employer knowingly hires or continues to employ an unauthorized worker, it can be exposed to civil and criminal penalties. The IRCA applies to all entities, large and small, corporate and individual, regardless of the number of employees in the employer’s workforce. Limited exceptions to the I-9 rule include individuals hired for domestic employment that is sporadic, irregular, or intermittent; independent contractors authorized to work in the US; B-1 domestic servants; B-1 trainees on short term training programs; employees hired before November 7, 1986 and continuously employed; and individuals who are not working physically in the US.

“While it may seem daunting to stay current with the form’s evolving technical requirements, the failure to do so may expose an employer to audits, fines and/or criminal prosecutions, which could include prison time,” says Melissa A. Silver, Legal Editor, XpertHR.

DACA. One employment eligibility issue facing many employers is related to employees who are beneficiaries under the Deferred Action for Childhood Arrivals (DACA). Keeping up with the legal developments regarding DACA is a challenge and employers need to ensure that they stay up to date on this continually evolving issue when verifying employment eligibility and authorization of new hires.

Avoiding discrimination. Another potential trap for employers is ensuring that they employ an authorized workforce, while avoiding engaging in discrimination during the Form I-9 process. In order to ensure compliance employers should take various actions, including the following:

1. Closely follow the directions mandated on the Form I-9. Do not request any additional information or documents beyond what is mandated on the Form I-9.
2. Allow employees to choose which of the approved documents the employee will use in completing the Form I-9. Do not mandate that any particular document be presented by the employee.
3. Wait until after the prospective employee has accepted the employment offer before verifying the new hire’s eligibility for work or requesting completion of the Form I-9.
4. Train employees involved in the Form I-9 process not to refuse to hire a prospective employee because he or she presented documentation with a future expiration date.
5. Avoid making hiring, retention, or termination decisions on the basis of actual or perceived citizenship status, national origin, or the employee’s native language.

Ensuring compliance. In order to ensure compliance with the IRCA and the Form I-9 requirements, employers should establish uniform policies such as the following:

  • Whether to copy supporting documents;
  • Storage of I-9 forms;
  • Addressing credible reports of suspected unlawful employment and/or fraudulent identity; and
  • Retention and purging.

“With increased scrutiny on employers’ hiring practices, especially those of non-US citizens, employers need to ensure that they verify the employment authorization and identity of new hires,” explains Silver. “Although challenging, having a Form I-9 compliance program and training personnel on properly completing the Form I-9 can help minimize the costly pitfalls of noncompliance.”

About the author, Rhamy

Rhamy grew up watching and working with his mother and grandmother in the seniors insurance market. This familiarity with the struggles faced by people trying to navigate the incredibly complicated and heavily regulated healthcare market led him to start Poplar Financial while working on his degree at the University of Memphis. After completing his MBA and Bachelors in Finance and Economics, Rhamy guided Poplar Financial through the disruptive opportunity that is the Affordable Care Act. Since then Poplar Financial has received numerous awards from major insurance carriers, and has completed its fourth year in a row of doubling in size. Now his team focuses on the processes around human resources, and specializes in providing companies with between 20 and 1000 employees with the payroll, benefits, and HR needs.

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