Salary budget to come in at 3.6% per Mercer: Employers trimmed the average increase in salary budgets this year to 3.6% from projections in November of 3.8% as they saw more stability compared with the job churning during the pandemic period’s “Great Resignation,” Mercer said. Companies also plan to promote 8% of their workforce in 2024 compared with 10% last year, Mercer said, describing results of a survey. They have budgeted 9.2% pay increases for promoted employees, down slightly from 9.4% in 2023. The report of slower salary increases preceded the release of Commerce Department data showing that the economy expanded 1.6% last quarter, far less than forecast, as personal spending rose a less-than-expected 2.5%. Gross domestic product during the final quarter of last year increased 3.4%. Inflation data also exceeded expectations. The preferred inflation measure for the Federal Reserve — the core personal consumption expenditures price index excluding food and energy — increased 3.7% last quarter on an annualized basis, far beyond the central bank’s 2% target, the Commerce Department said. Source: HR Dive 4/29/24
Does the president have authority to set a federal contractor minimum wage? Maybe. The president's minimum hourly wage increase for federal contractors to $15 is intertwined with furthering the economy and is therefore supported by the Procurement Act, a split Tenth Circuit panel ruled Tuesday, agreeing with a Colorado federal court to keep the wage bump. The panel majority said that the 2021 rule has a nexus close enough to promoting economy and efficiency in federal procurement, a requirement necessary for the president under the Federal Property and Administrative Services Act, or Procurement Act. "Even if the rule could plausibly increase costs for the government and the public, enhanced worker productivity and higher quality work — standing alone — are sufficient justifications to invoke FPASA," the majority said. The 9th Circuit, in hearing the same nexus of facts in a similar case, appears poised to rule otherwise, not accepting the promoting economy and efficiency argument. It appears that this issue of the president’s power through executive orders will be appealed to the Supreme Court. Source: Law360 4/30/24
Fertility benefits may be an essential benefit for attraction and retention: Employer-sponsored fertility benefits—which can include everything from financial assistance with IVF treatments, sperm and egg freezing, surrogacy and adoption, to clinical guidance and coaching through these processes are the rise. According to consultancy Mercer, about 45% of large employers offered IVF coverage to their employees last year, up 23 percentage points from 2019. When looking at employers of all sizes, the International Foundation of Employee Benefit Plans found that 40% covered IVF treatments in 2023, compared to 30% in 2020. Such organizations are increasingly looking to fertility benefits as part of their employee value proposition: Job search engine Adzuna found a 109% increase in the number of companies promoting fertility benefits since 2023. Employees are driven by costs advocating for these benefits. Fertility treatments carry significant costs. For instance, one single IVF cycle may be upwards of $30,000, while a round of egg freezing can cost $8,000, with thousands more in medication costs. The only hiccup currently is that the Alabama Supreme Court ruled that frozen embryos created through the in vitro fertilization process are humans, which could lead to liability for those who destroy unviable or unused embryos. If this ruling spreads, it could pause these benefits. Source: HR Executive 4/22/24
Does Title VII allow an employer to favor transgender employees? In a Pennsylvania case, the plaintiff, a cisgender male, alleged that his employer later hired two transgender employees. The plaintiff further claimed that he complained to his manager about unequal treatment, including instances in which his transgender coworkers arrived late and kept the store open past regular operating hours. Rather than discipline these employees, the manager promoted one of them. A few months later, the employer fired the plaintiff and another cisgender (female) coworker. The plaintiff claimed that they were the only two cisgender employees working at the same store location. Thus, after the terminations, only transgender employees worked there. The cisgender employee sued for discrimination. The defendant, since the plaintiff alleged that the defendant simultaneously fired a cisgender male and female, he “fails to show how similarly situated employees outside of his protected status as a male were treated more favorably.” The court stated that “[f]or an employer to discriminate against employees for being [cisgender], the employer must intentionally discriminate against individual men and women in part because of sex.” “If anything,” noted the court, firing two cisgender employees together “bolsters” the plaintiff’s argument. Therefore, if his allegations are true, the cisgender plaintiff would have a viable claim under Title VII for gender discrimination. Source: Pierson Ferdinand LLP 4/9/24
EEOC tries to join the Workday AI discrimination lawsuit: Workday Inc. urged a California federal judge to reject the U.S. Equal Employment Opportunity Commission's bid to file an "inappropriately partisan" amicus brief in support of a Black job hopeful's suit claiming the business uses biased algorithms to disqualify applicants. "The EEOC's brief is inappropriately partisan," Workday said. "Rather than provide the EEOC's neutral interpretation of the relevant statutes, it advocates for plaintiff and seeks to bolster plaintiff's opposition." Workday stated its position that it is not an employer — it only provides human resources software — and therefore can't be held accountable under the federal employment laws. EEOC filed a late amicus brief stating that Workday meets the definition of an employment agency and therefore can be held responsible under the plaintiff’s allegations. Depending how the lawsuit lands, HR needs to note that liability for using a tool that has AI in it may subject it and the tool provider with liability. HR should identify any tool that has AI in it, document how it is used, and see if there is an indemnification clause in the contract in case bad news hits. Source: Law360 4/25/24
Cannabis on the way to being legal by DEA: In a move long awaited by the cannabis industry, the Drug Enforcement Administration (DEA) is considering re-scheduling cannabis. Currently classified under Schedule I, along with heroin, cannabis would now move to Schedule III, along with ketamine and anabolic steroids. This would not legalize cannabis for adult-use; rules and regulations would still apply, and there would be criminal prosecution of those who deal in cannabis without a license. Re-scheduling, although much closer than it was yesterday, is still way off. The DEA rule needs to be reviewed by the White House Office of Management and Budget. After that review, there would be a public comment period (which looks to be at least 60 days, although no firm timeline has yet been set), after which the DEA rule would be published and go into effect. Given the controversy surrounding both the re-scheduling and legalization of marijuana, we would not be surprised if there is litigation that seeks to stop the re-scheduling from going into effect. Source: Jackson Lewis