On August 9, 2023, the Equal Employment Opportunity Commission’s (“EEOC”) new Commissioner, Kalpana Kotagal, was sworn in, likely bringing more employee-friendly policies with her into the role. In the past month, the EEOC has taken significant actions towards its new progressive policies, including the settling of a case involving bias in hiring with artificial intelligence (“AI”), the proposal of Pregnant Workers Fairness Act (“PWFA”) regulations, and indicating that it will revive its EEO-1 Component 2 submission requirement, which will require businesses to report their pay data by race and gender. Employers must be prepared to review their policies to ensure compliance with ever-changing EEOC guidance.
AI Bias in Hiring Settlement
In May 2022, the EEOC brought a lawsuit against the tutoring company, iTutorGroup, and its two integrated companies for violations of the Age Discrimination in Employment Act (“ADEA”), seeking back pay and liquidated damages. See EEOC v. iTutorGroup Inc., E.D.N.Y., No. 22-cv-02565 (2022). This suit was brought in response to more than 200 applicants that were denied jobs by the company in March and April 2020 after its AI-based hiring platform rejected all female applicants over 55 years old and all male applicants over 60. This was discovered when a female applicant applied and was initially rejected but was then accepted when she reapplied with the exact same application, aside from the inclusion of a more recent date of birth.
As a result of the settlement, filed with the court on August 9, 2023, iTutorGroup must pay $365,000 in damages to a group of rejected job seekers ages 40 and over. Further, according to the consent decree, the company is prohibited from rejecting tutor applicants based on sex, must adopt anti-discrimination policies, must conduct anti-discrimination trainings, and must invite the improperly rejected applicants to reapply.
Given the evolving landscape of AI regulations in hiring on local, state, and national scales, employers should be mindful to consult with counsel to stay up to date on current regulations and best practices. Some of these best practices in the hiring process include ones to utilize early in the application stage, such as: provide clear guidance on the availability of and process for requesting reasonable accommodations; provide notice to applicants concerning the use of AI and information on which traits are being evaluated, the method of evaluation, and the factors that could positively or negatively affect the rating; and limit AI technology for measuring those characteristics, experiences, or skills that are truly necessary for the job. Further, employers should begin to implement independent bias audits of their AI systems, even if the systems were developed by third parties, to ensure compliance with AI-bias laws including New York City’s most recent policy and those proposed nationwide.
Pregnant Workers Fairness Act
On August 11, 2023, the EEOC released proposed regulations that would update the current protections for pregnant workers against discrimination under Federal law. If enacted, this would be the first time that additional anti-bias and anti-discrimination protections would be extended to pregnant workers since the 1978 Pregnancy Discrimination Act. These revisions include protections for current, past, and potential pregnancy; lactation; use of birth control; menstruation; miscarriages; and abortion. Additionally, they expand the definition of when an employee is “qualified” for leave as an accommodation, to fill in gaps left in the Family and Medical Leave Act.
Currently, the EEOC is facing significant pushback on these proposed regulations for their expansive approach to medical conditions to include the ability for employees to seek reasonable accommodations related to abortion. However, it has long been the policy of the EEOC and federal courts to include discrimination related to abortion as a form of Title VII sex discrimination, and therefore, a violation of an employee’s rights. See, e.g., Doe v. C.A.R.S. Protection Plus, Inc., 527 F.3d 358, 364 (3d Cir. 2008), cert. denied, 129 S. Ct. 576 (2008); Turic v. Holland Hospitality, Inc., 85 F.3d 1211, 1214 (6th Cir. 1996). Under these proposed rules, employers would not be required to pay for abortions, although the 1978 law may require they do so in instances of medical complications or when it is performed to save the life of the pregnant worker. Employees could sue if they are denied abortion related leave, although companies can deny this requested accommodation if it would present an “undue hardship.” The EEOC will be taking comments on the proposed revisions until October 10, 2023. Employers should begin evaluating efforts that may be needed for these proposed accommodations and to minimize the financial and personnel cost on their unique business plan.
Reporting of Pay Data by Race and Gender
In 2016, a Democrat-chaired EEOC implemented a policy of collecting pay data by race and gender from employers through a submission known as an EEO-1 Component 2. However, it was quickly challenged in the courts after the Trump administration deemed it too burdensome for businesses in 2017. The policy was upheld by a federal judge in 2019, and has now gained renewed interest and heightened focus under the more progressive leadership of the current EEOC. While businesses with over 100 employees have to file EEO-1 workforce data, this obligation currently does not include pay information.
EEOC Chair Charlotte Burrows emphasized the importance of this information in protecting the rights of employees at a conference in Phoenix in early August and stated that the EEOC will be soliciting public input on the matter and considering recommendations from advisory groups. The re-implementation of this submission requirement may be brought through the Administrative Procedure Act or the Paperwork Reduction Act – the Commission’s decision of which to utilize would determine whether pre-enactment public comment or a private right of action would be available. Employers should consult with counsel to stay up to date on the progression of this requirement and opportunities to make their viewpoints heard. Further, employers should ensure compliance with current state and local regulations for publishing of salaries and earnings publicly, which employment counsel can assist in providing information about. Nelson Mullins Employment Law attorneys are standing by to provide guidance on these and other developments in EEOC policy and enforcement.
