As we previously reported, effective November 1, 2022, the New York City Pay Transparency Act requires covered employers to advertise or post a position, promotion, or transfer opportunity for a role that may or will be performed, at least partially, in NYC disclose the minimum and maximum annual salary or hourly rate that the employer has a good faith belief that it would pay for the position.
Looking ahead to 2023, similar laws will go into effect in California, Washington and Rhode Island. Here are some highlights of the pay transparency laws that come into effect on January 1, 2023:
In California, Section 432.3 of the Labor Code, as amended, requires employers with 15 or more employees to “include the pay scale for a position in each job posting.” The law does not define a “vacancy posting” but clarifies that it includes third-party posts that are commissioned by an employer to advertise a job. In addition, all employers must provide an applicant “upon a reasonable request” or an employee “for the position in which the employee is currently employed”, the salary scale for a job. Penalties for non-disclosure of payroll are up to $10,000 per violation.
In addition, as we previously reported, California law requires employers to provide certain employee payroll data to the California Department of Civil Rights. Employers with 15 or more employees are required to report the mean and median hourly wage for each combination of race, ethnicity, and gender within a given job category. The first reports, to be based on 2022 data, are due May 10, 2023. Penalties for failure to report are up to $200 per employee.
Washington’s Equal Pay and Opportunities Act, RCW § 49.58.110, as amended, requires employers with 15 or more employees to “disclose the pay scale or salary range in every assignment for every job posting.” In particular, Washington law also requires employers to provide a “general description of all benefits and other compensation offered to the recruited applicant.” The state has issued administrative guidance stating that this description should include, but is not limited to: “Health care benefits, retirement benefits, any benefits that allow time off (including more generous reserves for paid sick leave, parental leave, and paid time off or vacation benefits ) and any other benefits that must be reported for federal tax purposes, such as B. Benefits.”
A “position” under Washington law is defined as “any solicitation for the recruitment of job applicants for a specific available position, including recruitment directly by an employer or indirectly by a third party.” The law expressly clarifies that the definition applies to “any electronic or printed advertisement containing qualifications for the desired applicant”.
Pay Equity Act of Rhode Island, RI Gen. Laws ch. 28-6, was amended to provide new wage transparency requirements. Unlike California and Washington laws, Rhode Island law does not specifically require employers to post estimated salary ranges in job postings. Instead, it provides that upon request, employers must “provide . . . to a job applicant, the salary range for the job that the applicant is applying for.” Employers “should” disclose the range “before discussing compensation for the job with the applicant”.
But even if not required, employers must “make available to an employee the wage margin for the employee’s position, both at the time of hiring and when the employee transfers to a new position”. In addition, upon request, employers must provide a salary range for an employee’s current position at any time “during employment”. “Wage range” is defined as the “lower and upper limit that an employer is willing to pay an applicant for employment or to pay an employee”.
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In addition to these soon-to-be-enacted laws, proposed wage transparency laws are currently pending in the states of New York, Massachusetts and South Carolina.
With current and evolving pay transparency legislation, employers should be proactive in ensuring their job postings comply with all laws that apply to such jobs. To that end, employers should consider how these laws define their scope when determining whether a particular assignment must include salary, which could be particularly important (and complicated) in cases where the position may be performed remotely.
Employers should also keep in mind that wage transparency laws also exist at the local level. In addition to New York City, legislators in Westchester County, NY, Ithaca, NY and Jersey City, NJ – among other locations – have enacted local pay transparency ordinances.