Legal Updates – December 2020

The EEOC Proposed New Guidance on Religious Bias

The Equal Employment Opportunity Commission (“EEOC”) revised its Compliance Manual on Religious Discrimination for the first time in twelve years, and employers need to get up to speed.  The proposed guidance is available for public comment until December 17, 2020 and the EEOC will consider the feedback before finalizing the new guidance.  The updates were largely driven by Supreme Court decisions handed down since 2008, which was when the manual was last updated.

Religious Organization

The proposed manual expands the definition of a “religious organization” so that it does not rule out for-profit entities or those engaged in secular activities.  The EEOC eliminated the requirement that an employer be a nonprofit to qualify as a religious employer and said that it is an “open question” as to whether a for-profit organization may be exempt under Title VII.  Federal district courts will decide whether an entity is religious depending on the facts of each case.

Ministerial Exception

The ministerial exception has been expanded in the wake of two Supreme Court decisions, Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC and Our Lady of Guadalupe School v. Morrissey-Berru.  In both cases, the court ruled that the ministerial exception is not limited to clergy members or those who “minister.”  This means that religious employers are protected from anti-discrimination laws that ban religious bias and allows them to give job preferences to members of their own religion during the hiring process.  Now courts will not interfere in employment decision “involving selection, supervision, and removal” of employees who play “certain key roles” and “are essential to the institution’s central mission.”

However, the EEOC proposed guidance does not go as far as the Court did in Bostock v. Clayton County.  While the Court held in that landmark decision that Title VII’s ban on sex-based discrimination covers sexual orientation and gender identity, the proposed EEOC guidance does not denounce gay and transgender bias as illegal under Title VII.

Religious Accommodation

Another noteworthy change involves requests for religious accommodations.  Employers may have to accommodate employees with traditional religious beliefs.  The EEOC illustrated the issue with an example where an employer with “a policy that all employees in its retail stores must wear shirts conveying messages celebrating LGBTQ Pride in the month of June.”  If an employee has a religious objection to wearing the shirt, the employer “may have an obligation to accommodate.”  Conversely, an employer does not have to accommodate an employee who objects to mandatory training that emphasizes respect for others’ religious beliefs or lack of belief.  The employee, likewise, will not be exempt from training regarding non-discrimination based on sexual orientation.

Accommodation of “conscientious objection” may also be required.  The proposed section uses the example of a Labor and Delivery nurse who has a religious objection to participating in abortions.  Even if allowing the nurse to swap duties on an ad hoc basis with other nurses causes the employer an undue hardship, the employer should consider options such as a lateral transfer to another department where the nurse would not be asked to assist with abortions.

Importantly, according to the EEOC, there are no “magic words” necessary to assert a valid request for an accommodation.  If the employee does not provide enough information to properly assess their request, the employer is obligated to follow up with this employee to get more details.

The EEOC also encourages an “interactive process” when addressing religious accommodations.  Just as under the Americans with Disabilities Act, an employer considering a disability-related accommodation request should engage in an interactive process with an applicant or employee making the accommodation request, the employer considering religious accommodations should do the same.  Furthermore, an employer may not refuse to hire someone because the employer presumes that person will request a reasonable accommodation.  For example, an employer cannot refuse to hire someone just because the employer assumes there will be a conflict between an applicant’s headscarf and the company’s “look policy.”

Additionally, an employer cannot use “fear of the floodgates” as undue hardship.  The EEOC’s proposed guidance says that an employer can base an undue hardship claim on “the number of individuals who will in fact need a particular accommodation.”  However, a “mere assumption that many more people with the same religious practices . . . may seek accommodation is not evidence of undue hardship.”

Harassment Standard

The EEOC also heightened the standard for “religious harassment,” stating that actions must be “extremely severe” and go beyond isolated and insensitive behaviors to be considered unlawful harassment.  The EEOC cites court decisions saying that the following actions, standing alone, are not religious harassment:

• Sending a religious co-worker an invitation to a same-sex wedding.
• Inviting a co-worker to come to church.
• Asking a religious employee to “swear on a Bible” or telling someone that “people don’t like her ‘church lady act.’”
• Telling a Rastafarian employee that their “dread things made him look too radical.”

The EEOC did not prohibit proselytizing at work and recognized that some employees’ religious beliefs may require them to proselytize.  However, when “an employee expressly objects to particular religious expression, unwelcomeness is evident.”  If the proselytizing continues, it may cross the line and become harassment.  Unwelcomeness does not have to be expressed verbally, it may also be evident from body language or other signs.

Holiday Festivities

Just in time for the holiday season!  The proposed guidance allows for “secular” decorations in the workplace, including wreaths and trees.  These items can be displayed even if not everyone in the office celebrates the associated holiday and the decorations do not need to be removed, even if they offend some employees who do not celebrate the holiday.  Employers are also not required to decorate for every holiday celebrated by their employees with different faiths.  An employer may decorate for only one holiday without being accused of bias.

Employer Takeaways

All public and private sector employers should review their policies, especially those involving requests for religious accommodations and workplace attire, to ensure compliance with the EEOC’s proposed changes.

 

Colorado Department of Labor and Employment Issued Final Equal Pay Transparency Rules

On November 10, 2020, the Colorado Department of Labor and Employment issued its final Equal Pay Transparency Rules, which will go into effect on January 1, 2021.  The Rules provide clarity on the requirements of the Equal Pay for Equal Work Act (“EPEWA” or “the Act”).  Specifically, the provisions of the Act governing employer’s obligation to disclose and announce promotional opportunities to all employees when such opportunities arise.

The Equal Pay for Equal Work Act

The EPEWA prohibits discrimination based on sex, or sex in combination with another protected status, by paying employees of one sex differently than another sex for substantially similar work.  The Act also prohibits an employer from: (i) seeking wage history from an applicant; (ii) restricting employees from sharing their wage information with others; or (iii) retaliating against an applicant or employee for refusing to provide wage history if asked.

The EPEWA applies to all Colorado employers, including public employers, schools, and an employer with at least one employee and imposes certain employer notice and record-keeping requirements.  Employers must announce the opportunities for advancement and job openings, including the pay range, benefits, and other compensation offered for each job opening.  Employers must also make a reasonable effort to announce, post, or otherwise make known all opportunities for promotion to all current employees on the same calendar day and prior to making a promotion decision.  Additionally, employers must maintain records of job descriptions and wage rate histories for each employee while employed and for two years after employment ends.

Job Postings

The EPT Rules clarify that the EPEWA applies to postings for all job openings, except for those jobs performed entirely outside Colorado.  An employer must include the following information in all job postings:

1. The hourly rate or salary compensation that the employer is offering for the position based on what the employer, “in good faith believes it might pay for the particular job;” and
2. A general description of all benefits offered for the position, including health care benefits, retirement benefits, paid days off, including sick leave, parental leave, vacation benefits, and any other benefits that must be reported for federal tax purposes.

Employers may choose to post either the pay rate (hourly or salary) or may elect to post a compensation range.  The range may extend from the lowest to the highest pay and can be tailored to the expectations for that opening and need not reflect the full potential range for that role in general.  Additionally, employers may “ultimately pay more or less than the posted range, if the posted range was the employer’s good-faith and reasonable estimate of the range of possible compensation at the time of the posting.”

Opportunities for Promotion

The EPT Rules also clarify the requirement to announce promotional opportunities.  The Rules define promotional opportunities as those situations “when an employer has or anticipates a vacancy in an existing or new position that could be considered a promotion for one or more employee(s) in terms of compensation, benefits, status, duties, or access to further advancement.”  The Rules require employers to make reasonable efforts to “notify all employees of all promotional opportunities, and may not limit notice to those employees it deems qualified for the position, but may state that applications are open to only those with certain qualifications, and may screen or reject candidates based on such qualifications.”  Each notification for promotional opportunities must: (i) be in writing; (ii) include the compensation and benefits information of the opportunity (see job posting requirements above); (iii) indicate how to apply.  Of note, non-competitive, in-line, step, or career promotions based on defined criteria need not be announced because there is no vacancy in an existing position or new position to fill.

Exceptions

The Rules provide some limited exceptions to the requirement that an employer post all promotional opportunities:

1. Confidentiality. When there is “a compelling need to keep a particular opening confidential because the position is still held by an incumbent employee who, for reasons other than avoiding job posting requirements, the employer has not yet made aware they will be separated,” employers do not need to provide notice of the promotional opportunity.  If the employer tells any employee of the opportunity, all employees must be told if they (1) meet the minimum qualifications or (2) have a job “substantially similar” to any employees being told of the opportunity.  If the need for confidentiality ends, the job must be posted in compliance with the Act.
2. Probationary Period. An employer is not required to post a promotional opportunity where the employer makes a “written representation” that an employee will automatically be considered “for promotion to a specific position within one year of hire based solely on the employee’s own performance and/or employer needs.”
3. Temporary Positions. An employer is not required to make an immediate promotion posting when a position is filled “on a temporary basis for up to six months” while the employer is searching for a permanent candidate or if “the hiring is not expected to be permanent.”  If the interim hire may become permanent, the required promotion posting must be made in time for employees to apply for the permanent position.
4. Outside Colorado. An employer is not required to post a promotional opportunity for employees entirely outside Colorado.

As with job postings, employers must notify all Colorado employees of all promotional opportunities, even if the employer does not believe the employee is qualified for the role.  The announcement may state that applications are open only to those with certain qualifications, and employers “may screen or reject candidates based on such qualifications.”

Complaints

The Colorado Department of Labor and Employment will not accept complaints regarding the violations of the Rules that occurred prior to January 1, 2021.

Takeaways for Employers

While the Rules provide clarity, simplification, and flexibility to the Equal Pay for Equal Work Act, they nonetheless impose significant obligations on the employer to post and publish promotional opportunities in a timely manner.  Prior to January 1, 2021, all employers with an employee in Colorado should take the following actions:

• Conduct a compensation audit to identify any discrepancies in pay based on sex or other protected class;
• Create a process and procedure for posting all job openings and opportunities for promotion;
• Create or review files describing each job and establish a process for creating and approving job descriptions; and
• Train managers on the requirements and prohibitions of the EPEWA.

 

Colorado Voters Approve Paid Medical and Family Leave

On November 3, 2020, Coloradans voted in favor of Proposition 118, a ballot initiative establishing a paid family and medical leave program.  The new law, known as the “Paid Family and Medical Leave Insurance Act,” (“PMFL”) creates a state-run and paid family and medical leave insurance program that allows employees to take up to twelve weeks of paid leave.  There are an additional four weeks of leave allotted for pregnancy or childbirth complications.

The program, which will become available on January 1, 2024, is funded through a payroll tax paid by employers and employees in a 50/50 split.  Beginning January 1, 2023 employers must remit premiums of 0.9% of each employee’s earnings, 50% of that premium may be deducted from the employee’s wages.  Small employers, those with fewer than ten employees, are not required to pay the employer portion of the premium.  Workers of small businesses can choose to pay the entire premium and be covered.  For example, an employee making $100,000 a year, the employer must remit $900 to the program.  Up to $450 of that amount may be deducted from the employee’s wages.

Eligibility

                Covered Employer

An “employer” is defined as any entity that employs at least one person for each working day during each of twenty or more calendar workweeks in either the current year or the immediately preceding calendar year or an entity that has paid wages of $1,500 or more during any calendar quarter during the preceding calendar year.  As mentioned above, only those employers with at least ten employees are required to participate.  Local governments and businesses that already provide a paid family and medical leave benefit similar to PMFL may choose to opt out.

                Covered Workers

To qualify as a covered worker under the Act, an individual must:

1. Have earned at least $2,500 in wages that were subject to PMFL premiums;
2. Satisfy certain administrative requirements of the PFMLI and forthcoming regulations;
3. Submit an application claiming PFMLI benefits; and
4. Be absent for a qualifying reason (see below).

The PFMLI also broadly defines “employee” to include any individual performing labor or services for the benefit of another.  Independent contractors are not considered employees for the purposes of this Act.

Employees may take PMFL leave for any of the following reasons:

• Birth of a child or the placement of a child through adoption or foster care;
• To care for a family member with a serious health condition;
• The employee has a serious health condition;
• For a qualifying exigency leave, meaning “leave based on a need arising out of a covered individual’s family member’s active duty service or notice of an impending call or order to active duty in the armed forces;” and
• Employee has a need for safe leave, such as cases of domestic violence, stalking, or sexual abuse.

                Covered Family Members

For the purposes of this Act, a “family member” includes:

• Child;
• Parent;
• Souse or domestic partner;
• Grandparent;
• Grandchild;
• Sibling; or
• Any individual with whom the employee has a significant personal bond that is or is like a family relationship.

Family members may be related by blood, adoption, foster relationships, or marriage.  Individuals who stood in as loco parentis to the employee or the employee’s spouse or domestic partner when they were a minor are considered “family members” for purposes of PFMLI.  An employee’s child is covered regardless of age.

Intermittent Leave

A covered worker can receive benefits intermittently under the Act.  PMFL intermittent leave can be taken in increments of one hour or shorter periods, if that is consistent with the increments the employer typically uses to measure employee leave.  However, the benefits are not payable until the employee accumulates at least eight hours of benefits.

Benefits

A covered individual could receive up to twelve weeks of paid family or medical leave, with four additional weeks available for pregnancy or childbirth complications.  The amount of PFMLI benefits available to an employee is calculated based on the employee’s average weekly wage and that state average weekly wage.  The maximum benefit is capped at $1,100 per week for 2024.  PMFL benefits will be paid on a biweekly basis.

The portion of an employee’s average weekly wage will be paid based on a formula that provides a greater percentage of pay to lower earners.  For example, an employee who makes $500 per week would be eligible to receive 90% of their normal wage, while an employee who earns $3,000 per week would be entitled to only 37% of their normal compensation.

Job Protections

Under the Act, any covered worker who has been employed by their employer for at least 180 days at the time they ask to begin receiving benefits will also receive job protection for the duration of their leave.  Employers cannot take disciplinary or retaliatory actions against employees who requested or used paid leave.  An employee who takes leave under the act is entitled to return to the same position or a position with the same pay, benefits, and seniority or status.  There is a private right of action for employees who feel their rights under the Act have been violated.  Employees cannot lose their health benefits during their leave and are required to pay their portion of health insurance premiums while on leave.

Notice

Employers must post the PMFL program in writing and in a prominent location in the workplace.  The employer must also notify employees of the program in writing upon hire and upon learning of an employee experiencing an event that triggers eligibility.  Colorado’s Division of Family and Medical Leave Insurance will develop a notice detailing the requirements and benefits for employers to post.

Looking Ahead

Colorado’s Department of Labor and Employment will administer the Paid Medical and Family Leave Insurance Act.  The PFML Act created the Division of Family and Medical Leave Insurance.  The Division will likely issue rules related to this Act in the coming years.  Stay tuned for developments as this Act becomes implemented.