Bank giant JPMorgan Chase & Co. is dedicated to “diversity, equity and inclusion” in its workplace policies. We know it because he says it, right there on his site.
Unfortunately, for the most part, we have to take the company’s word for it.
Indeed, for the past eight months, JPMorgan Chase has appeared to ignore a state law requiring it to provide California officials with the data they need to determine for themselves how well the bank has done in eliminating the wage discrimination among its employees.
Several months ago, we recognized that the deadline to comply with the regulations had passed and quickly began working to fulfill the filing requirement.
– JPMorgan Chase
The frustration felt by California officials may be familiar to consumers who have been outright ignored by a big company when trying to file a complaint, or even just get routine information.
Beginning Oct. 25, state officials warned the company five times, at least twice by certified mail, that it was in violation of a 2020 state law requiring it to file a report on compensation data.
The required reports, which had to be submitted for the first time by last March 31 for the calendar year 2020, must include the number of employees of a company by race, ethnicity and gender performing certain jobs and their rate. compensation in the previous year.
Chase never responded to any of the notices, according to the state Department of Fair Employment and Housing, which collects the data. Finally, on June 14, more than a year behind the report, the agency sued JPMorgan Chase in state court in Alameda County, seeking an order requiring the bank to promptly submit the data (and pay the state’s expenses to bring the action).
The bank says it is now working to come into compliance. “Several months ago, we recognized that the deadline to comply with the regulations had passed and quickly began working to fulfill the filing requirement,” a spokesperson told me by email.
He further claimed, “We publicly disclose workforce and compensation nationally and globally, well beyond what is required of us.” In effect, the bank publishes diversity statistics on its website, but not in the detail required by California law.
That may be the case, but California’s requirements are stricter and more consistent than those the bank and other employers must impose on the federal government.
California’s statistical requirements are consistent with those established by the Obama administration in 2016. In August 2017, however, before the arrival of the first reporting deadline the following March, the rule was overturned by the Trump administration. California went its own way and implemented an Obama-like requirement.
The purpose of the wage reports is to allow state regulators to determine whether employers are following anti-discrimination laws prohibiting wage disparities based on gender, race, or ethnicity, unless they can be justified by factors such as seniority, merit, education or experience. The law applies to most employers in California with at least 100 employees nationwide.
JPMorgan Chase was not the first employer to be sued by the DFEH for failing to submit a payroll report. That honor goes to arts and crafts chain Michaels Stores, which operates in more than 100 locations in California among its 1,270 locations nationwide. After the channel failed to respond to three notices that it broke the law, the DFEH lodged a complaint on May 5.
A Michaels spokesperson told me via email that “we have now submitted all requested data and although we were inadvertently late in submitting it, we are working closely with the DFEH.” The department confirms that it has been in contact with Michaels.
JPMorgan Chase is obviously a bigger fish, with more than 900 locations in California out of its 4,900 nationwide, as documented in the department’s lawsuit. But this may not be the last case the DFEH takes to court.
“We estimate that there are thousands of employers who are required to file but have not yet done so for the 2020 reporting year,” agency spokeswoman Fahizah Alim said. .
Yet there is something offbeat about JPMorgan Chase’s explanation for its failure to meet the demands of a state law that has been in place for more than a year.
It may be true that some of the state’s notifications may have gotten lost in the mail — the DFEH in its lawsuit even acknowledges that some of its notifications were “mistakenly” sent to a headquarters address.
Still, at least three notices were sent to the company that acts as JPMorgan Chase’s registered agent in California — a service that handles official or legal communications and forwards them to the appropriate office — on February 9, April 20 and May 20. . If the company didn’t properly forward the notices, which warned of pending legal action, then it wasn’t doing its job and perhaps JPMorgan Chase needed to find another agent.
But it begs the obvious question of why America’s largest bank needs to be reminded of its legal obligations in the union’s largest state.
JPMorgan Chase had 122,000 employees in 2020, and some of them were surely members of a strong compliance department responsible for ensuring that the bank meets all of its legal obligations in all jurisdictions where it does business.
Why should she be reminded that she owed California a pay and discrimination report by March 31, 2021? Why was a trial necessary to refresh his memory?
And why, if the bank was really serious about its commitment “to fostering a diverse and inclusive culture for our employees and our business” rather than treating that commitment as a throwaway line on its public relations website, did it not know that she was mandated to document this commitment with facts and figures?
It is difficult to escape the conclusion that in this case, as in not a few others, JPMorgan Chase was using its vast size to its advantage. In the past, his daunting mass and influence have served him well in intimidating regulators. This time around, maybe someone in the company suite thought California’s state data requests were too trivial to care about.
After all, what could be worse? Under the law, the most the DFEH can seek from a judge for breaking its rules is their court and court costs, and a court order compelling the defendant to comply.
There are only two real solutions: break up companies that grow so big that they don’t know or care about the legal mandates that affect them on the ground; or increase penalties so that violating a law designed to protect thousands of workers has real and visible consequences on a company’s bottom line.
If thousands of employers are flouting the law in California, as the DFEH believes, then maybe raising the stakes so that each day of non-compliance costs thousands of dollars would raise their awareness.
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