Welcome, Legislative Developments and Compliance with the Pay Transparency Law

1. Welcome, Legislative Developments and Compliance with the Pay Transparency Law John L. Knorek, Esq. March 5, 2019

2. Welcome • DOL proposal to move the FLSA =-OT white collar exemption salary to $35,000 • Above the current $24,000 but less than the Obama Administration $47,000 • Several Minimum Wage Bills Pending • Equal Pay Amendments expanding liability • Expansion of HFL

3. SB 2351, CD 1: Pay History - Pay Transparency eff. 1/1/19 • Cannot ask applicant’s salary history; • May ask what salary expectations are. • Cannot rely on salary history to set compensation or benefits • an employer, … without inquiring about salary history, may engage in discussions with an applicant for employment about the applicant's expectations with respect to salary, benefits, and other compensation; provided that if an applicant voluntarily and without prompting discloses salary history to an employer,… the employer may consider salary history in determining salary, benefits, and other compensation for the applicant, and may verify the applicant's salary history.

4. Exceptions: public employees covered by CBA 2) background checks 3) internal transfer applicants

5. "Inquire" means to: (1) Communicate any question or statement to an applicant for employment, an applicant's current or prior employer, or a current or former employee or agent of the applicant's current or prior employer, in writing, verbally, or otherwise, for the purpose of obtaining an applicant's salary history; or (2) Conduct a search of publicly available records or reports for the purpose of obtaining an applicant's salary history; provided that this shall not include informing an applicant, in writing or otherwise, about the proposed or anticipated salary or salary range for the position. "Salary history" includes an applicant for employment's current or prior wage, benefits, or other compensation, but shall not include any objective measure of the applicant's productivity, such as revenue, sales, or other production reports.

6. 378-2.3(b): Cannot discriminate against employee for disclosing employees’ wages or benefits or inquiring about other employees’ wages or benefits…or aiding or encouraging other employees to do so. -no exceptions for HR/Benefits administrator or managers/supervisors

7. Provides that wage disclosure, discussion, inquiry, and other prohibition provisions under section 378-2.3, HRS, do not apply to discussion of other employee wages if knowledge of the wages stem from human resources, payroll, or legal professional responsibilities in the workplace. (HB1536 HD1) Deferred by JUD 2/27

8. Pending Legislation:WC HB 389 – Passed House Labor Committee F2/7/19Requires persons performing an independent medical exam or permanent impairment rating exam for a workers' compensation work injury examine the employee within 30 calendar days upon receipt of notice. Provides that the employee be provided a copy of the exam within 30 calendar days. Makes the report invalid if the time requirements are not met.

9. Requires persons performing an independent medical exam or permanent impairment rating exam for a workers' compensation work injury examine the employee within an unspecified period of time upon receipt of notice. Requires that the employee be provided a copy of the exam. (HB389 HD1)Passed H FIN 2/27

10. Requires an employer to pay for all medical services related to an employee's compensable injury and the employee's rehabilitation within 60 days of receipt of the bill for services. Establishes a process for employers to dispute the payment of an employee's medical bill. (HB912 HD1) FIN passed 2/22

11. Minimum Wage HB 96 Passed H LAB 1/31 and FIN 2/22 Authorizes the counties to establish a minimum wage that is a higher wage than the state minimum wage under Chapter 387, Hawaii Revised Statutes.

12. Increases minimum wage rates annually from $11 -January 1, 2020 through $15 -January 1, 2024. Provides lower minimum wage rates for employees who receive employer-sponsored health benefits under the Hawaii Prepaid Health Care Act. (HB1191 HD1) Passed FIN 3/1/19

13. Prohibits written nondisclosure agreements involving sexual assault and sexual harassment as part of an employee's condition of employment under certain conditions. Prohibits employers from retaliating against an employee for disclosing or discussing sexual harassment or sexual assault. (HB488 HD1) Passed JUD 2/27 (SB 1041 Passed JDC 2/27 (Stand. Com. Rep. No. 846) This section shall not apply to human resources employees expected to maintain the confidentiality of an investigation as part of their official duties, employees requested to maintain the confidentiality of an ongoing human resources investigation, and confidential settlements between an employee alleging sexual harassment and an employer.

14. Makes unenforceable confidentiality clauses in employment contracts when an act of sexual harassment is claimed by an employee. Bans mandatory arbitration agreements as to sexual harassment claims beginning July 1, 2019. Makes mandatory confidentiality clauses in an arbitration agreement unenforceable as to sexual harassment claims. Takes effect 1/1/2051. (SB 1048, SD1) Passed JDC 2/22

15. Adds reproductive health decisions and utilization of family leave to the list of categories that are protected against discriminatory employment practices. (HB710 HD1)Reported from FIN (Stand. Com. Rep. No. 988), recommending passage on Third Reading. 3/1/19

16. Prohibits noncompete agreements for low wage workers whose earnings do not exceed the greater of the minimum wage required by applicable federal or state law or $15 per hour. (HB1059 HD1) Passed FIN 2/27

17. §378-2.3 Equal pay[; sex discrimination]. (a) No employer shall discriminate [between] among employees [because of sex,] by paying [wages] compensation to employees [in an establishment] at a rate less than the rate at which the employer pays [wages] compensation to employees of [the opposite] another race, sex [in the establishment] including gender identity or expression, sexual orientation, age, religion, color, ancestry, disability, marital status, arrest and court record, or domestic or sexual violence victim status for [equal] substantially similar work [on jobs the performance of which requires equal] when viewed as a composite of skill, effort, and responsibility, [and that are] performed under similar working conditions. [Payment] (b) Compensation differentials [resulting from:] do not violate this section if the defendant demonstrates that the differential solely results from any of the following factors: (1) A non-discriminatory seniority system; provided that time spent on leave due to a pregnancy-related condition or parental, family, or medical leave, shall not reduce seniority; (2) A non-discriminatory merit system; (3) A system that objectively measures earnings by quantity or quality of production; or [(4) A bona fide occupational qualification; or (5) A differential based on any other permissible factor other than sex[,]do not violate this section.] (4) A factor that has neither the purpose nor the effect of discriminating on any basis prohibited by this section. HB 1192 HD 1

18. (c) For the purposes of subsection (b)(4), a factor has the purpose of discriminating on a basis prohibited by this section if its general use or application in a particular case is motivated, in whole or in part, by considerations of race, sex including gender identity or expression, sexual orientation, age, religion, color, ancestry, disability, marital status, arrest and court record, or domestic or sexual violence victim status. (d) An employer who pays a wage in violation of this section shall not, in order to comply with the provisions of this section, reduce the wage rate of any employee. (e) The agreement of an employee to work for less than the wage to which the employee is entitled under this section is not a defense to an action under this section. [(b)] (f) An employer shall not retaliate or discriminate against an employee for, nor prohibit an employee from, disclosing the employee's wages, discussing and inquiring about the wages of other employees, or aiding or encouraging other employees to exercise their rights under this section.Passed JUD 2/27

19. Extends Hawaii family leave to include care for grandchildren. (HB1343 HD1)Passed FIN 2/22 Stand. Com. Rep. No. 999

20. Requires employers of fifty persons or more who provide a parking subsidy to employees to offer a parking cash-out program.SB 739 Passed CPH 2/27

21. Prohibits an employer from discriminating against an employee based on the employee's status as a qualifying patient and from taking action against an employee based solely on the employee's status as a qualifying patient or if the results of the employee's drug test are positive for cannabis, subject to certain exceptions. Specifies permissible and impermissible actions by employers and employees. Takes effect 1/1/2051. (SB 1524, SD1)Passed LCA/CPH2/14 and referred to JDC.