As interest rates rise and the threat of a recession looms, many employers are beginning to struggle with balancing the cost of maintaining their workforce with an expected decrease in profits. The frequent result of such a balancing act is a mass layoff. While a reduction in workforce may be inevitable, below are options that employers can consider to try to avoid that outcome. For all of these alternatives, employers should apply any changes consistently across the workforce to avoid claims of inequity or discrimination.

Continue Reading Avoiding Layoffs In an Uncertain Economy

On October 12, 2022, the UK Information Commissioner’s Office (“ICO”) opened a public consultation seeking feedback on the draft guidance document on employment practices, specifically relating to monitoring at work (the “Monitoring at Work Guidance”).

The Monitoring at Work Guidance aims to provide practical guidance and good practices relating to monitoring UK workers in accordance with data protection legislation. It addresses key gaps in the current ICO Employment Practices Code, and provides useful guidelines on the lawful bases for monitoring, the application of data protection principles set out in the UK GDPR as well as practical guidance on specific types of workplace monitoring (e.g., covert monitoring, automated processes, biometric data etc.). The public consultation will be open until January 11, 2023 and interested parties may submit their feedback on how to improve the guidance. For more information on the key issues in the ICO’s draft Monitoring at Work Guidance, and how this latest guidance compares with prior guidance on monitoring at work, please see our Inside Privacy blog here.

Mandatory gender pay gap reporting is new to Ireland and is likely to attract media attention and potential comparisons, particularly for multinational and higher profile companies.  Deciding how best to communicate the gender pay gap – if it exists – will be important in averting any particular anxieties which may arise for employees and their representatives in particular. 

Our colleague Marie Daly explores these new rules in detail in a post on our affiliated blog, Global Policy Watch.

To promote pay transparency and equity, an increasing number of states and localities are requiring employers to disclose salary data in job advertisements or postings.  The trend started in Colorado in 2021, and now a number of other jurisdictions have followed suit, including New York City and the states of California and Washington.  The New York City law took effect on November 1, 2022, and the California and Washington laws go into effect on January 1, 2023.  Similar laws have recently been enacted in other areas as well, including Jersey City, New Jersey (effective June 15, 2022), the City of Ithaca, New York (effective September 1, 2022), and Westchester County, New York (effective November 6, 2022).

This post will provide an overview of the New York City, California, and Washington laws, and discuss steps that employers can take to comply with the new requirements.

Continue Reading New Pay Transparency Laws Taking Effect

On October 26, 2022, the Securities and Exchange Commission (the “SEC”) adopted a long-awaited rule that will require listed companies to adopt and publicly file so-called “clawback” policies.  As we discuss in more detail in this alert, the rule requires listed companies to adopt clawback policies to recover, reasonably promptly, incentive-based compensation that proves to be excessive following an accounting restatement.  The executives covered by the rule are persons who served as an executive officer at any time during the performance period for such incentive-based compensation.  The amount that must be recovered generally includes excess compensation earned during the three fiscal years preceding the date on which the company is required to prepare an accounting restatement.

Among other executive compensation implications, the SEC contemplates that existing contractual arrangements with executives may need to be amended as a result of the new rule.  The rule mandates recovery of erroneously paid compensation, subject to narrow exceptions that generally include a finding that it is impracticable to do so because the cost of recovery exceeds the amount to be recovered.  The SEC’s adopting release states that inconsistency between the rule and existing compensation contracts is not a basis for such an impracticability finding.  As such, listed companies may wish to consider whether existing compensation arrangements should be amended to facilitate compliance with the mandate to recover.  In addition, listed companies may wish to review contractual clawback provisions in existing agreements for conformity with their clawback policies (as may need to be amended to conform with the new rule).  Going forward, where clawbacks are required, there may be complex questions concerning whether there may be additional compensation arrangements not cited in the release that may be subject to clawback, the amount of excess compensation that needs to be recovered, and the methods to satisfy the SEC’s requirement to undertake reasonable efforts to recover such compensation.

On August 25, 2022, the United States Securities and Exchange Commission adopted a final rule requiring new disclosures for public companies regarding the relationship between executive compensation and company performance. Among other things, companies are now required to develop a new table that discloses multi-year compensation data side-by-side with prescribed financial performance metrics and a company-specified metric that the company views as the “most important” financial measure used to link executive compensation to corporate performance. Our Securities & Capital Markets colleagues published this alert discussing the new rule and how companies might approach compliance in their next proxy statement. The alert will be of interest to corporate secretaries, executive compensation professionals, securities and disclosure counsel, controllers, and other related stakeholders.

The City and County of San Francisco (the “City”) has significantly amended its Family Friendly Workplace Ordinance (“FFWO”), which gives employees the right to make a written request for a flexible or predictable working arrangement to allow them to balance family caregiving responsibilities. The amended FFWO, which took effect on July 12, 2022, loosens employee eligibility requirements and expands employer obligations, including by providing that employers must provide a flexible or predictable work arrangement upon request unless the arrangement would impose an undue hardship on the employer. The FFWO continues to cover employers that have 20 or more employees and maintain a physical business location in San Francisco.

Continue Reading San Francisco Expands Flexible and Predictable Workplace Requirements

Starting November 1, 2022, New York City employers will be required to post salary ranges on advertisements for internal and external job listings. This new law, which amends Section 8-107 of the New York City Administrative Code, provides that it is an “unlawful discriminatory practice” for employers and employment agencies to list a job, promotion, or transfer opportunity in an advertisement without including the maximum and minimum salary range for the position.

After the City Council passed amendments on April 28, which were signed into law by Mayor Eric Adams on May 12, the New York City Commission on Human Rights (the “Commission”) published updated guidance for employers on the amended law.

Continue Reading New York City’s Amended Salary Transparency Law to Take Effect on November 1

A new law signed by President Biden brings significant changes to employers’ ability to require arbitration of certain disputes with employees and could lead to an increase in sexual assault and sexual harassment claims against employers in court.  On March 3, 2022, President Biden signed into law the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” (the “Act”).  The Act amends the Federal Arbitration Act (“FAA”) to provide that predispute arbitration agreements and predispute joint-action waivers relating to sexual assault and sexual harassment disputes are unenforceable at the election of the person or class representative alleging the conduct.  The Act took effect immediately upon signing.

Continue Reading New Law Ends Mandatory Arbitration for Sexual Assault and Sexual Harassment Claims