Connecticut Seal

General Assembly

File No. 196

    February Session, 2018

Substitute House Bill No. 5386

House of Representatives, April 4, 2018

The Committee on Labor and Public Employees reported through REP. PORTER of the 94th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING VARIOUS PAY EQUITY AND FAIRNESS MATTERS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 31-40z of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

(a) As used in this section:

(1) "Employer" means any individual, corporation, limited liability company, firm, partnership, voluntary association, joint stock association, the state and any political subdivision thereof and any public corporation within the state using the services of one or more employees for pay;

(2) "Employee" means any individual employed or permitted to work by an employer; and

(3) "Wages" means compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation.

(b) No employer shall:

(1) Prohibit an employee from disclosing or discussing the amount of his or her wages or the wages of another employee of such employer that have been disclosed voluntarily by such other employee;

(2) Prohibit an employee from inquiring about the wages of another employee of such employer;

(3) Require an employee to sign a waiver or other document that denies the employee his or her right to disclose or discuss the amount of his or her wages or the wages of another employee of such employer that have been disclosed voluntarily by such other employee;

(4) Require an employee to sign a waiver or other document that denies the employee his or her right to inquire about the wages of another employee of such employer;

(5) Inquire or direct a third party to inquire about a prospective employee's wage and salary history before an offer of employment that includes wages has been accepted by the prospective employee unless a prospective employee has voluntarily disclosed such information, except that this subdivision shall not apply to any actions taken by an employer, employment agency or employee or agent thereof pursuant to any federal or state law that specifically authorizes the disclosure or verification of salary history for employment purposes. Nothing in this section shall prohibit an employer from inquiring about compensation structure, as long as such employer does not inquire about the value of the elements of such compensation structure, except that an employer may inquire about the value of stocks or equity;

[(5)] (6) Discharge, discipline, discriminate against, retaliate against or otherwise penalize any employee who discloses or discusses the amount of his or her wages or the wages of another employee of such employer that have been disclosed voluntarily by such other employee; or

[(6)] (7) Discharge, discipline, discriminate against, retaliate against or otherwise penalize any employee who inquires about the wages of another employee of such employer.

(c) Nothing in this section shall be construed to require any employer or employee to disclose the amount of wages paid to any employee.

(d) An action to redress a violation of subsection (b) of this section may be maintained in any court of competent jurisdiction by any one or more employees or prospective employees. An employer who violates subsection (b) of this section may be found liable for compensatory damages, attorney's fees and costs, punitive damages and such legal and equitable relief as the court deems just and proper.

(e) No action shall be brought for any violation of subsection (b) of this section except within two years after such violation.

(f) In a civil action alleging a violation of subsection (b) of this section, an employer may file a motion in any court of competent jurisdiction to disallow an award of compensatory and punitive damages. The court shall grant the motion if the employer demonstrates, by a preponderance of the evidence, that the employer (1) completed, within three years before the date that the employee filed such action, an equal pay analysis of the employer's pay practices in good faith that was reasonable in detail and scope in light of the size of the employer; and (2) eliminated the wage differentials for the plaintiff. If the court grants the motion, the court may award back pay only for the two-year period immediately preceding the filing of the action and may award costs and reasonable attorney's fees, but may not award compensatory or punitive damages. Evidence of an equal pay analysis undertaken in accordance with this subsection shall be inadmissible in any other proceeding.

Sec. 2. Subsection (b) of section 31-75 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

(b) If an employee can demonstrate that his or her employer discriminates on the basis of sex by paying wages to employees at the employer's business at a rate less than the rate at which the employer pays wages to employees of the opposite sex at such business for equal work on a job, the performance of which requires equal skill, effort and responsibility, and which are performed under similar working conditions, such employer must demonstrate that such differential in pay is made pursuant to (1) a seniority system, provided time spent on leave due to a pregnancy-related condition or protected family and medical leave shall not reduce seniority; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) a differential system based upon a bona fide factor other than sex, such as education, training or experience. Said bona fide factor defense shall apply only if the employer demonstrates that such factor (A) is not based upon or derived from a sex-based differential in compensation, and (B) is job-related and consistent with business necessity. Such defense shall not exist where the employee demonstrates that an alternative employment practice exists that would serve the same business purpose without producing such differential and that the employer has refused to adopt such alternative practice.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2018

31-40z

Sec. 2

October 1, 2018

31-75(b)

LAB

Joint Favorable Subst.

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.


OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

The bill prohibits employers from asking about a prospective employee's wage and salary history under certain circumstances and allows lawsuits over alleged violations. This does not result in any fiscal impact to the state or municipalities.

The Out Years

State Impact: None

Municipal Impact: None

OLR Bill Analysis

sHB 5386

AN ACT CONCERNING VARIOUS PAY EQUITY AND FAIRNESS MATTERS.

SUMMARY

This bill generally prohibits employers, including the state and its political subdivisions, from asking about a prospective employee's wage and salary history before the prospective employees accepts an employment offer that includes wages. It allows exceptions (1) when a prospective employee voluntarily discloses his or her compensation history, (2) if the disclosure is specifically authorized by state or federal law, and (3) for certain types of compensation elements (e.g., stock value).

In a lawsuit alleging a violation of the bill or of existing law's prohibition on employers taking certain steps to limit their employees' ability to share information about their wages, the bill allows an employer to limit its damages if it can show that it (1) completed an equal pay analysis of its pay practices within three years before the suit was filed and (2) eliminated wage differentials for the plaintiff.

The bill also requires employers using a seniority system to defend themselves in certain gender wage discrimination lawsuits to include in an employee's seniority any time spent on protected family and medical leave or leave due to a pregnancy-related condition.

EFFECTIVE DATE: October 1, 2018

WAGE AND SALARY HISTORY

The bill prohibits employers from asking or directing a third-party to ask about a prospective employee's wage and salary history before the prospective employee accepts an employment offer that includes wages. The prohibition does not apply (1) if the prospective employee voluntarily discloses his or her wage and salary history or (2) to any actions taken by an employer, employment agency, or its employees or agents under a federal or state law that specifically authorizes the disclosure or verification of salary history for employment purposes. The bill also allows an employer to ask about compensation structure, but the employer may not ask about the value of the compensation structure's elements, except for the value of stocks or equity.

Enforcement and Limited Damages

The bill allows prospective employees to bring a lawsuit within two years after an alleged violation of the bill's prohibition on asking about salary histories. Employers can be found liable for compensatory damages, attorney's fees and costs, punitive damages, and any legal and equitable relief the court deems just and proper.

In a lawsuit alleging a violation of the bill or of existing law's prohibition on employers taking certain steps to limit their employees' ability to share information about their wages, the bill allows an employer to file a motion in any court of competent jurisdiction to disallow an award of compensatory or punitive damages.

Under the bill, a court must grant the motion if the employer shows by a preponderance of evidence that it (1) eliminated wage differentials for the plaintiff and (2) completed an equal pay analysis of its pay practices within three years before the suit was filed. The equal pay analysis must have been performed in good faith and in reasonable detail and scope in light of the employer's size. It cannot be admitted as evidence in any other proceeding. If the employer is successful, the court may award back pay only for the two-year period immediately preceding the suit's filing, plus costs and attorney's fees, but it may not award compensatory or punitive damages.

GENDER WAGE DISCRIMINATION LAWSUITS

The state's labor law allows employees (or the labor commissioner) alleging gender wage discrimination to sue employers for lost wages, compensatory damages, attorney's fees, and in some instances, punitive damages (CGS 31-76). However, employers with pay differentials can defend themselves by showing that the differentials are based on (1) seniority; (2) merit; (3) a system that measures production quantity or quality; or (4) bona fide factors such as job-related education, training, or experience (CGS 31-75 (b)).

Under the bill, if an employer uses a seniority system to defend its pay differentials, an employee's time spent on leave due to a pregnancy-related condition or protected family and medical leave must not reduce seniority.

BACKGROUND

Related Bill

sSB 15, reported favorably by the Labor and Public Employees Committee, also generally prohibits employers from asking about a prospective employee's wage and salary history before the prospective employee accepts an employment offer that includes wages.

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable Substitute

Yea

13

Nay

0

(03/20/2018)

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