January 20, 2023 • Shirley A. Gauvin
Category: Legal Updates
Over the past several years a growing number of cities, counties and states have enacted some form of pay transparency laws covering a wide range of issues. Most of these laws aim to prevent pay discrimination and provide employees with the ability to freely discuss their salaries. More states are passing or amending existing laws to require salary disclosure as part of their pay transparency laws. A brief summary of these laws is included below.
California - Effective January 1, 2023, California’s Pay Transparency Law (Senate Bill No. 1162 – Labor Code section 432.3) provides that employers with 15+ employees (including part-time and at least one in California) are required to list salary ranges on job postings on the company’s hiring page or any third-party website, including postings for remote positions. If an employer has more than one location, all employees are counted, including out-of-state employees. Employers must also provide pay ranges to existing employees for the jobs they hold, if requested. The pay scale information must visibly appear and must not require a separate link or QR code to be used.
“Pay Scale” means the salary or hourly wage range that the employer reasonably expects to pay for the position, excluding bonuses, commissions, tips, or other benefits (however, if the salary or hourly wage is based on either commission or a piece rate, the commission range or piece rate the employer reasonably expects to pay must be included). This law means approximately 200,000 employers will need to comply, including some of the largest employers in the country.
Violations of Act - A person may file a complaint with the Labor Commissioner’s Office within one year after the date the person learned of a violation of Labor Code section 432.3. He/she may also bring a civil action for injunctive relief and any other relief that the court deems appropriate. An employer found to have violated the law is subject to civil penalties of no less than $100 and no more than $10,000 per violation. Employers are also prohibited from retaliating against an employee for any action taken to invoke or assist with enforcement of the Act. An employee may file a retaliation claim with the Labor Commissioner or in court within one year of any retaliation. Any employee who prevails on a retaliation claim may be awarded reinstatement, back pay, interest on backpay, and possibly other remedies, and a Labor Commissioner filing is not a prerequisite to filing an action in court. Employers who are not currently complying with the law should become compliant immediately.
Washington - Effective January 1, 2023, Washington’s Equal Pay and Opportunities Act requires employers with 15+ employees to disclose pay range for a job advertisement on the company’s hiring board or third-party site so long as the company has at least one Washington-based employee, engages in business in the state or is recruiting for positions that could be filled remotely by someone in Washington. These listings are also required to include a summary of benefits offered, to include health care and retirement benefits, and any benefits allowing days off (i.e., paid sick leave accruals, parental leave, and PTO or vacation benefits), as well as any other benefits that must be reported for federal tax reasons. Upon request of an employee offered a transfer to a new position or promotion, the employer must likewise provide the wage scale or salary range for the employee’s new position.
Rhode Island - Effective January 1, 2023, Rhode Island’s Pay Equity Act requires employers to provide the pay range to job applicants upon request. Employers are required to disclose the wage range for the position the applicant is seeking prior to discussing compensation, and shall provide wage range at the time of hire, and if an employee transfers to a new position. Employers must also provide a salary range for a current employee’s position if requested.
Colorado - In 2021, Colorado was the first state to enact a laws requiring businesses to disclose salary ranges on job ads.
Connecticut – Effective October 1, 2021, Connecticut employers with at least one worker in Connecticut are required to share the salary range for a position if an applicant requests it or when they extend an offer, whichever occurs first, and must provide salary range when an employee is hired, changes to a new position, or requests it.
New York City, Ithaca, Westchester County and New York State – As of November of 2022, the NYC Human Rights Law requires employers with 4+ employees and at least one in NYC to provide a pay range in all jobs advertisements during the hiring process. The same law applies in Ithaca. In Westchester County, employers must list the salary range on all job ads for roles that will or may be filled in Westchester, including remote jobs. Similarly, in* New York State*, a salary transparency bill is expected to go into effect in September of 2023, also requiring employers with four or more employees to disclose salary ranges for advertised jobs and promotions.
Jersey City, New Jersey – In Jersey City, employers with 5+ employees and principle place of business in Jersey City must list the salary range and describe benefits on all job advertisements, transfers or promotion opportunities.
Maryland - Employers in Maryland must share the salary range information for a position if an applicant requests it.
Nevada – Nevada employers must provide the salary range to applicants after an initial interview, even if the applicant has not requested it, and must provide pay ranges for a transfer or promotion opportunity if an employee has applied for it, completed an interview and requested it.
Ohio – In 2019, Cincinnati passed a law effective in 2020, requiring that employers with 15+ employees share the salary range for a position after they extend an offer and if the applicant requests it. Similarly, in Toledo, Ohio, employers with 15+ employees must share the salary range for a position in Toledo after they extend an offer and if the applicant requests it.
Contact Stokes Wagner if you have any questions.
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THIS DOCUMENT PROVIDES A GENERAL SUMMARY AND IS FOR INFORMATIONAL/EDUCATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE COMPREHENSIVE, NOR DOES IT CONSTITUTE LEGAL ADVICE. PLEASE CONSULT WITH COUNSEL BEFORE TAKING OR REFRAINING FROM TAKING ANY ACTION.