For years, pay equity has been a hot topic in employment law. The next step toward actualizing equal pay for equal work across genders, races, and nationalities is to pass laws requiring disclosure of pay scales. LinkedIn News listed pay transparency as one of the “ideas that will change the world in 2022.” Employers operating in regulated locations, employing remote workers, and recruiting across the nation have questions about the details of the laws – What will these laws require? How will they comply with these laws? To whom will these laws apply? Some states and cities are regulated more heavily than others.

The states that currently have legal requirements for providing candidates with pay ranges are as follows: California, Colorado, Connecticut, Maryland, Nevada, Rhode Island, and Washington. You should note that many of these laws include document retention obligations, pay equity reporting, and requirements for equal pay regardless of gender. 

California

 Going into effect on January 1, 2023, California law requires employers with more than 15 employees to include a pay scale in job postings, including positions posted by third parties. Employers with over 100 employees are required to submit an annual report of pay information to the California Civil Rights Department. “Pay scale” is defined as the “salary or hourly wage range that the employer reasonably expects to pay for the position.” Although the definition of a pay scale in California does not include bonuses, commissions, or other benefits, other states require such information on every job posting. 

In addition to salary transparency in job postings, an amendment to the Labor Code includes requirements for employers to maintain a record of each employee’s job title and wage history for three years after the employment relationship terminates. California law does not address whether remote job postings are subject to these regulations.

Offending employers may be subject to civil penalties, including the possibility of up to $10,000 per violation.

Colorado

 As of January 1, 2021, all employers with at least one (1) employee residing in Colorado must list the salary range in every job posting and notify all current employees of promotional opportunities. The law also requires that information on bonuses, commissions, or other compensation be provided to prospective applicants. Initially, the law prompted some employers to exclude remote employees based in Colorado from applying for advertised positions. As a result, the Colorado Department of Labor quickly issued a notice to those employers, reminding them that Equal Pay for Equal Work Act (EPEWA) provisions apply to all remote job openings as long as at least one employee resides in Colorado. 

Some exceptions to the salary requirements for job postings include: 

• confidentiality due to the replacement of an existing employee
•  automatic promotion of an employee after a trial period of up to one year
•  temporary/acting/interim position for up to 6 months (noting that if the position becomes permanent, it must be posted)

The law can be enforced with fines ranging from $500 and $10,000 per violation.

Connecticut

 Going into effect October 1, 2021, Connecticut’s law, “An Act Concerning the Disclosure of Salary Range for a Vacant Position,” requires employers with at least one employee in Connecticut to disclose the “wage range” for a vacant position to employees and applicants upon either the applicant’s request or the communication of an offer of employment. “Wage range” is the range of wages an employer anticipates relying on when setting wages for a position. The wage range is determined by referencing an applicable pay scale, the previously determined range of wages for the position, the actual range of wages for employees who currently hold comparable positions, or the budgeted amount for the position.

It was later confirmed that the act does apply to remote employees. The act is quoted as saying “employer within the state using the services of one or more employees for pay even if such employees are located outside the physical confines of the state."

Maryland

 Effective October 1, 2020, the EPEWA requires any employer engaged in the state of Maryland to provide a wage range to all applicants who request such disclosure. Employers are prohibited from refusing to interview, hire, or employ an applicant solely because the applicant requested the wage range associated with the desired position. Employers are also prohibited from requesting past salary information from an applicant. With that being said, upon making an employment offer, the employer may rely on the applicant’s wage history to support a higher wage than offered, if the wage history is voluntarily provided.

An applicant may file a complaint with the Maryland Department of Labor’s Commissioner of the Division of Labor and Industry. Civil penalties range between $300 and $600 per violation. Upon finding a violation, the Commissioner can either issue an order compelling compliance, or for a first violation, issue a letter to the employer compelling compliance.

Nevada

 Starting on October 1, 2021, Nevada mandates that any private or public employer in the state of Nevada must disclose a wage or salary range to any applicant after an initial interview as well as to current employees that apply for a transfer or promotion, complete an interview for a transfer or promotion, have been offered a transfer or promotion, or request the information to consider a transfer or promotion. 

Fines could be up to $5,000 for each violation and payment of the Nevada Labor Commissioner’s fees and costs to investigate and prosecute a claim.

Rhode Island

 Effective January 1, 2023, the Rhode Island Equal Pay Law will require employers with one or more employees within the state to provide job applicants with the wage range of the position upon the applicant’s request. Whether or not the applicant requests the wage range, employers are expected to provide the wage range for the position before discussing compensation with the applicant. In Rhode Island, “wage range” is defined as the range the employer anticipates paying for the position, including budgeted amounts. For current employees, the wage range can include applicable pay scales and what other employees in that position have been paid previously. 

If a current employee requests the wage range for their position at any time during their employment, their employer must be provided such information.

Washington State

 Effective on July 28, 2019, Washington State declared that employers with 15 or more employees in Washington must disclose the minimum wage or salary for a position upon an applicant’s request after an offer of employment. Employers are also required to disclose wage or salary range upon the request of an employee offered an internal transfer or a promotion. 

Starting January 1, 2023, these same employers in Washington State are required to disclose a salary range in job postings, as well as a general description of benefits and other compensation offered. This includes both discretionary and nondiscretionary wages and benefits provided by an employer as a result of employment.

The law states that the penalty for a first violation may not exceed $500. After that, the penalty may not exceed $1,000 or 10% of the damages, whichever is greater.

There are a select few enacted local laws that are more specific than those previously outlined. The specific areas and their laws can be found in the link below.

Cincinnati, Ohio

 Beginning March 13, 2020, employers with 15 or more employees within the city are required to provide the pay scale to an applicant for a position after an employment offer has been made and if a reasonable request is made by the applicant. The Ordinance does not define the terms “reasonable request” or “pay scale”. 

The Ordinance creates a private cause of action and provides for compensatory damages, reasonable attorney’s fees, the costs of the action, and legal and equitable relief with a two-year statute of limitations on such damages and relief. 

Westchester County, New York

 Effective November 6, 2022, Westchester County Local Law No. 119 prohibits employers with at least four employees from advertising a position without advertising the minimum and maximum salaries for the job advertised. The law applies to positions that are required to be performed either in whole or in part in Westchester County, whether in a physical office or remotely. 

Violations of the law are subject to compensatory and punitive damages, as well as civil penalties up to $250,000. 

Ithaca, New York

 Effective September 1, 2022, Ithaca City Code 215-3(F) requires employers with four or more employees within Ithaca to disclose the minimum and maximum hourly or salary compensation for the position advertised, including postings for promotions or transfers. The law does not mention whether employers must comply with the disclosure requirements if an employee would not be physically working from Ithaca.

Jersey City, New Jersey

 Initially effective April 13, 2022, and amended on June 15, 2022, the Ordinance in Jersey City requires employers with five or more employees within Jersey City to include a minimum and maximum salary range and benefits on every job posting or advertisement. Any violations of the ordinance will be subject to penalties outlined in Section 1-25 of the Municipal Code, including fines of up to $2,000.

New York City

 Effective November 1, 2022, employers with 2 or more employees must disclose a good faith salary range for every job, promotion, and transfer opportunity advertised. The disclosure must contain the minimum and maximum annual salary or hourly wage. All applicants, including internal applicants, are entitled to receive the disclosure when the job is posted. This law applies to any position that could be filled by a candidate who resides in New York City. The law also provides that it applies to any position that may be performed, at least partially, in New York City, even if the employee reports sporadically or infrequently to New York City.

After the first violation, employers that violate the law may face civil penalties of up to $250,000.

Toledo, Ohio

 Effective June 25, 2020, the Toledo, OH government mandated that employers provide applicants the pay scale for the position for which they are applying after an offer has been made, and upon the applicant’s reasonable request. This ordinance does not apply to internal transfers or promotions, or to applicants who are rehired within five (5) years.

A cause of action can occur within two (2) years of the occurrence of a violation.

If you have any thoughts or additional information about salary transparency legislation, we would love to hear it! Please email us at information@practicematch.com!