Clarifying Paid-Leave Policies
The U.S. Equal Employment Opportunity Commission’s lawsuit against Estee Lauder for sex discrimination may be the case which finally teaches HR directors that all benefits have to be equal between genders, says Jennifer Sandberg, a partner at Fisher Phillips.
The government agency filed suit against the Fortune 500 company on August 30, claiming it violated federal law when it created an unequal paid parental leave policy that offered women six weeks after childbirth or adoption but men just two weeks. It’s the agency’s first lawsuit in this area.
Estee Lauder refused to comment on the case. In its annual report, however, the company notes it was named the 21st best place to work by job site Indeed in 2017. It also registered a perfect score on the 2017 Corporate Equality Index, making Human Rights Campaign list of “Best Places to Work for LGBT Equality.”
The company’s answer to the charges isn’t due until November 30, says Jonathan W. Yarbrough, a partner at Constangy, Brooks, Smith & Prophete. Without the company’s response, it is hard to predict how it will fight the charges, he adds.
The lawsuit claims the company’s parental leave policy, adopted in 2013, offers six weeks of paid leave to “primary caregivers” after a birth or adoption. When a male stock person requested six weeks leave, the company refused his request, offering him two weeks. The EEOC also claims Estee Lauder offers women a four-week “flexibility period” to ease them back into work after birth or adoption; it does not offer men this benefit.
The lawsuit claims these policies violate Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963, both of which prohibit discrimination in pay or benefits based on an employee’s gender.
“Addressing sex-based pay discrimination, including benefits such as paid leave, is a priority issue for the commission,” said Debra M. Lawrence in a prepared statement. Lawrence is an attorney in the agency’s Philadelphia regional office.
With a rash of changes to family leave policies recently, Sandberg says HR directors can be confused by what really is a simple rule. She adds that paid family leave policies, even when not required by law, must treat men and women equally.
Comparing this benefit to the federal Family Leave and Medical Act of 1993, Sandberg says, “I’ve gotten three questions in the last six weeks where the employer is like, ‘I’ve got a guy who wants FLMA. That’s wrong, right?’ At least they are smart enough to call me, but they feel it’s a dumb question.” With more men asking for time off, Sandberg and Yarbrough both say this scenario is likely to become more commonplace.
FMLA guarantees workers at companies with more than 50 employees up to 12 weeks of unpaid leave for a variety of conditions, including childbirth and adoption. But many companies, and municipalities, are creating policies that offer workers at least partial paid leave for time off after childbirth or adoption. And more men than ever are seeking to take advantage of these options, says Sandberg. “As societal expectations have shifted, that’s why this is becoming more of a question. People are asking for things they just didn’t ask for before,” she adds.
While Sandberg says there are at least 30 state and local policies that oversee paid parental leave, the effort to create a federal law continues to be discussed. President Trump’s 2018 budget calls for six weeks of paid leave, something his daughter and presidential advisor Ivanka talked about frequently during the election. And a bi-partisan bill was introduced earlier this year that would offer federal workers six weeks of paid leave after childbirth or adoption.
One reason experts say this issue can be challenging for HR directors is because sometimes a women’s pregnancy is covered partially by health insurance, including time off for recovery. But when the paid leave is specifically for bonding with a new child, the benefit needs to be the same for both men and women.
Another complicating factor is the wide range of local and state policies that companies may need to factor into their policies. For instance, San Francisco has the most liberal policy in the country, guaranteeing all workers six weeks of fully paid leave. California workers are guaranteed 55 percent of their salary for six weeks of parental leave.
While company policies can’t discriminate between genders, a company can have different policies for workers in different areas of the country, Yarbrough says.
Companies that want to have one policy for all workers “can use the highest common denominator policy,” says Sandberg, raising its benefits to match the most demanding applicable municipal law.
With more companies seeking to bolster their benefits to attract and retain employees, Sandberg says this case “is a fabulous teaching opportunity for every other employer in the country.”