Pay equity, or the desire to achieve it, has been a hot topic for employers in the U.S. over the past several years. Due to a recent increase in legislation in many states and local jurisdictions, pay equity no longer just means ensuring women and other marginalized groups are being paid similar to their male counterparts who are performing similar jobs. Many jurisdictions also prohibit employers from relying on, or even asking about, an applicant's past salary history, thereby forcing employers to look at other factors to set a new employee's compensation.
In addition, a growing number of cities and states now mandate that employers provide wage information to applicants and in some jurisdictions, current employees, either upon request or on a mandatory basis at a specified point in the hiring process.
Employers in 10 jurisdictions (and counting) are now subject to wage disclosure requirements. Colorado and New York City have made headlines as the first jurisdictions to mandate such disclosures. Employers must review the laws of each individual jurisdiction to remain compliant with this growing collection of wage disclosure laws. The following table provides an overview of these jurisdictions and what they require:
| Jurisdiction | Who Gets the Info? | What Must be Provided? | When? | Effective Date | Penalties |
| California | Applicants | A salary or hourly range, not including bonuses or equity. | Upon reasonable request after an applicant interviews for a position. | Jan. 1, 2018 | Does not specify a penalty, but a representative claim under California's Private Attorneys General Act (PAGA) is available. |
| Colorado | Applicants and Employees | The hourly rate or salary; a general description of bonuses or other compensation; and a general description of benefits. | As part of the job posting. | Jan. 1, 2021 | Civil penalties between $500 and $10,000 per violation; a private right of action within two years of violation; compensatory and liquidated damages. |
| Connecticut | Applicants and Employees | Wage range, defined as any applicable pay scale previously defined, actual range of wages for those employees currently holding comparable positions or the employer's budgeted amount for the position. | For applicants: the earlier of either the applicant's request or prior to an offer of compensation being made; For employees: upon hiring of the employee, a change in the employee's position with the employer, or upon the employee's first request. | Oct. 1, 2021 | Private right of action within two years of a violation; compensatory damages; attorneys' fees and costs; and possibly punitive damages. |
| Maryland | Applicants | Wage range, undefined by the law. | Upon request after application. | Oct. 1, 2020 | Civil penalties up to $300 per violation and $600 for each subsequent violation. |
| Nevada | Applicants and Employees | Wage or salary range, undefined by the law. | For applicants: after an applicant has completed an interview; For employees: after the employee has either applied, interviewed or received an offer for a promotion or transfer. | Oct. 1, 2020 | Civil penalties up to $5,000 per violation; a private right of action. |
| New York City | Applicants and Employees | Minimum and maximum salary, defined as the range an employer in good faith believes at the time of posting it would pay for the advertised job, promotion or transfer. | As part of the job posting. | May 14, 2022 | No specific penalties as of yet, however the New York City Commission on Human Rights is authorized to impose civil penalties up to $125,000; a private right of action within three years; compensatory and punitive damages; attorney's fees and costs. |
| Cincinnati, Ohio | Applicants | Pay scale, undefined by the Ordinance. | Upon reasonable request after an applicant has been provided a conditional offer of employment. | March 13, 2020 | A private right of action within two years; compensatory damages; reasonable attorney's fees and costs. |
| Toledo, Ohio | Applicants | Pay scale, undefined by the Ordinance. | Upon reasonable request after an applicant has been provided a conditional offer of employment. | June 25, 2020 | A private right of action within two years; compensatory damages; reasonable attorney's fees and costs. |
| Rhode Island | Applicants and Employees | Wage range, defined as the range the employer anticipates relying on in setting wages for the position and may include reference to any applicable pre-determined pay scale, or the range of wages for incumbents in equivalent positions, or the budgeted amount for the position. | For applicants: upon request after application, but the employer should disclose the wage range prior to discussing compensation; For employees: both at the time of hire and when the employee moves into a new position. Upon request, employers must disclose a wage range to current employees in their current position. | Jan. 1, 2023 | Civil penalties ranging from $1,000 - $5,000, however the Department of Labor & Training will not begin issuing fines until December 31, 2024; a private right of action within three years; compensatory damages; special damages up to $10,000; reasonable attorneys' fees and costs. |
| Washington | Applicants and Employees | Minimum wage or salary expectation, undefined by the law. | For applicants: upon request after an offer has been made; For employees: upon request after an employee has been offered a promotion or transfer. | July 29, 2019 | Civil penalties between $500 and $1,000; a private right action; compensatory damages no less than $5,000; costs and reasonable attorneys' fees. |
While these laws seem similar on their face, each has its own nuance. As a result, using a uniform policy may prove to be a challenge for a multistate employer. For instance, in Rhode Island, employers must not only disclose a wage range for applicants and employees upon transfer or promotion but also must respond to an employee's request for a wage range for their current position. California, Washington, Connecticut, and Maryland all require disclosure upon request, but Nevada mandates automatic disclosure after an interview for an applicant, or after an application for a current employee.
The New York City law appears to apply to jobs located within New York City only, which leaves an open question as to remote work; Colorado, on the other hand, has taken the position that remote positions require wage disclosure and any employer seeking to get around this requirement by specifically excluding Colorado applicants is not compliant with the law.
In practical effect, the onus is on employers to document their rationale for their hiring and pay decisions. Employers can:
- Document formal job descriptions for both new applicants and promotion/transfer opportunities.
- Determine salary ranges for each job classification using existing data or on a good-faith basis.
- Create internal policies regarding promotion/transfer opportunities within an organization. Develop internal systems for handling employee requests for salary reviews.
This wave of wage disclosure laws likely is only the beginning. With similar legislation pending in several additional cities and states, we can expect to see additional governmental mandates in furtherance of pay equity in the near future.
Denise M. Visconti is an attorney with Littler Mendelson in San Diego. Thelma Akpan is an attorney with Littler Mendelson in New York City. © 2022 Littler Mendelson. All rights reserved. Reposted with permission.
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