9-10-2019; IL Risk/HR Managers Have to Catch Up to New Salary History “Gotcha” Law; Matt Wrigley, JD on New Michigan Reorganization That Includes WC and more

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Synopsis: IL Risk/HR Managers Have to Catch Up to New Salary History “Gotcha” Law.

 

Editor’s comment: The reason I call this a “Gotcha” law is the defenses are basically stripped away to expand reserves/exposures. The mistakes that may cost your company thousands in awards and opposing counsel’s attorneys fees which could become common. The mistakes could be innocent. You have less than three weeks to insure personnel folks in the hiring part of your company know what they have to do and NOT do.

 

Please note Brad Smith, J.D. is our top employment law defense attorney/partner and can provide guidance and assistance in defending these challenging claims. He can be reached 24/7 at bsmith@keefe-law.com.

 

In point of fact, you have just nineteen days until September 29, 2019 to revamp your IL hiring practices or face sizable liability or exposure from “Gotcha” rulings.

 

Governor J.B. Pritzker signed into law a bill adding a new spin to Illinois’ Equal Pay Act. The new legislation is designed to supposedly end the persistent national gender pay gap, by prohibiting Illinois employers from inquiring into job applicants’ pay history and from imposing rules that prevent workers from sharing salary information under some situations. Lawmakers wrote the law to become fully effective at the end of this month. Don’t be the first in the neighborhood to make the news with an innocent violation!

 

The law will take many hiring personnel at all Illinois employers by surprise precisely because it upends a longstanding assumption it is permissible for a hiring manager to screen candidates and set terms of job offers based on what they earned on prior positions. As a result, employers with hiring plans are likely to experience a flood of lawsuits unless they act quickly to retrain hiring personnel and adjust recruitment processes quickly.

 

In Short, Don’t Ask About Pay History or Let Pay History Be A Factor in Hiring or Employee Compensation Decisions

 

It will now be unlawful for an employer or temporary employment agency to:

 

  1. Screen job applicants based on current or prior wages or salary histories, including benefits or other compensation, by requiring that a pay history of an applicant satisfy minimum or maximum criteria;

  2. Request or require a wage or salary history as a condition of being considered for employment, as a condition of being interviewed, as a condition of continuing to be considered for an offer of employment, as a condition of an offer of employment or an offer of compensation;

  3. Request or require that an applicant disclose wage or salary history as a condition of employment; or

  4. Consider or rely on an applicant’s voluntary disclosure of current or prior wage or salary history, including benefits or other compensation, in determining whether to offer a job applicant employment, in making an offer of compensation, or in determining future wages, salary, benefits or other compensation.

 

With certain exceptions, it will be unlawful for an employer to seek wage or salary history, including benefits or other compensation, of a job applicant from any current or former employer.

 

It remains lawful, however, to discuss with applicants their expectations with respect to current or future compensation.

 

Don’t Require Employees to Keep Their Pay Confidential

 

It will also be unlawful to require an employee to sign a contract or waiver that would prohibit the employee from disclosing or discussing information about the employee’s wages, salary, benefits or other compensation.

“Gotcha”—Here are the Penalties

 

The law specifically makes it unlawful to discharge or otherwise discriminate against any individual who “fails to comply with any wage or salary history inquiry.”

 

It allows workers up to 5 years to sue employers over violations and allows them to recover compensatory damages, special damages up to $10,000.00, punitive damages and reimbursement of their reasonable attorney fees and costs.

 

The law empowers courts to award additional “civil penalties” of up to $5,000.00 for each violation for each employee affected.

 

Given these stakes, it is crucial employers act to ensure compliance as quickly as possible. Aside from making certain recommended hiring process changes, human resources folks have to train your managers as quickly as possible to break the age-old habit of asking applicants “How much do you currently make?” and factoring the response into their staffing decisions.

 

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Synopsis: State of Michigan reorganizes certain State agencies which deal with Labor, Talent, Economic Development, via Executive Order No. 2019-13. Research and Analysis by Matt Wrigley, J.D., KCB&A’s Michigan WC Legal Ace.

Editor’s Comment: Effective August 11, 2019, by Executive Order Michigan Governor Whitmer abolished the Department of Talent and Economic Development (TED) and replaced the same with a new Department of Labor and Economic Opportunity (LEO). The Executive Order was signed by the Governor on June 6, 2019.

In an effort to streamline and coordinate efforts to increase the number of Michigan residents with post-secondary credentials, the LEO will consist of several organizations. These include the

  • Michigan Economic Development Corporation,

  • Michigan Strategic Fund,

  • Michigan Economic Development Corporation (MEDC) and the

  • Michigan Strategic Fund (with a reorganized Board),

  • Unemployment Insurance Agency ,

  • Workforce Development Agency,

  • Workers’ Compensation Agency and Board of Magistrates,

  • Michigan Occupational Safety and Health Administration (MIOSHA),

  • Wage and Hour Division,

  • Employment Relations Commission,

  • Michigan State Housing Development Authority (MSHDA),

  • Michigan Rehabilitation Services,

  • Michigan Office of New Americans,

  • Asian Pacific American Affairs Commission,

  • Commission on Middle Eastern American Affairs and Hispanic/Latino Commission of Michigan,

  • Bureau of Services for Blind Persons as well as various entities and responsibilities for adult education, STEM advisory, and youth employment.

This Executive Order also separates the Michigan Compensation Appellate Commission, which currently handles unemployment and workers’ comp appeals, into the Workers’ Disability Compensation Appeals Commission and the Unemployment Insurance Appeals Commission.

For my readers who have followed me over the years, you may note Illinois has 88 state agencies with 88 agency heads and 88 HR managers and 88 everything’s. You can see our surrounding states are trying to streamline to cut staff and save money to avoid the skyrocketing debt and taxes Illinoisans face.

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Synopsis: In Indiana Worker’s Comp, Be Sure to Remember to EDI Lump Sum Payment Information within 30 days When Paying Claimants for Section 15 settlements. Research and writing by Kevin Boyle, J.D.

Editor’s comment: As you may have experienced, the EDI changes installed in IN WC this year have given some insurers/employers headaches and tested their IT systems’ ability to comply with the new rules. Hopefully, you have been able to keep up with the new system.

As part of the changes, the Indiana Worker’s Compensation Board recently reminded users that insurers/employers need to EDI proof of payment on settlement agreements to show payment of any settlement was made within 30 days of the Approval.

Last year, the statute added the 30 day deadline for payments of full and final agreements (“Section 15s”). So in addition to paying settlements within 30 days of the Approval, please also remember that you must provide the payment information through EDI, too.

Some of the new software systems/vendors that have been installed to comply with the new EDI system have protocol that automatically generate those EDI payment transmission to take care of the new requirement.

But if you don’t have that, now is a good time to either upgrade your system or manually make sure it’s done. Don’t get caught short with needed documentation.

If you need any help on this, please contact me: kboyle@keefe-law.com.