The trends in worker protection require companies to comply with new equal pay and pay transparency ordinances in their state. Every state, except Mississippi, affirms that an employer shall not discriminate in providing compensation for similar jobs based on the sex of similarly employed individuals. In addition, some states have extended considerations to include other protected classes, including race, age, or gender identity.
The latest trend in this arena is pay transparency. Twenty states now have laws prohibiting employers from discharging or discriminating against employees for inquiring about, disclosing, comparing, or discussing an employee’s wages. The next wave of pay transparency laws requires companies to disclose the salary or hourly range when they post an open position.
Colorado expanded on the pay transparency wave in 2021 by requiring employers to post the compensation range and a general description of all employee benefits in their job postings, external and internal, either directly or through a hyperlink. This disclosure is necessary for any applicant living in Colorado, even if the company is not located in Colorado. Unfortunately, many companies tried to skate around the requirement by not allowing remote applicants residing in Colorado. However, this loophole has since been closed with new legislation.
Other states and municipalities have copied Colorado’s pay transparency laws and, in some cases, expanded on them. For example, New York City adopted a similar statute to Colorado’s, which started in May 2022. In addition, New York state passed legislation on a similar law as New York City that awaited the governor’s signature and will begin 270 days after being signed by the governor. Starting in January 2022, Washington and California will follow in Colorado’s footsteps.
During the 2022 legislative session, Washington lawmakers passed ESSB 5761. Starting January 1, 2023, employers with 15 or more employees will be required to ‘disclose in each posting for each job opening the wage scale or salary range, and a general description of all of the benefits and other compensation to be offered to the hired applicant.’. In addition, the employer must provide a wage scale or salary range upon request of an employee offered an internal transfer to a new position or promotion. The bill also declares, “Posting means any solicitation intended to recruit job applicants for a specific available position, including recruitment done directly by an employer or indirectly through a third party, and includes any postings done electronically, or with a printed hard copy, that includes qualifications for desired applicants.”
Governor Gavin Newsom signed California Senate Bill 1162 on September 28, 2022. Starting January 1, 2023, the law requires ‘an employer with 15 or more employees to include the pay scale for a position in any job posting.’ However, the California bill goes one step further than Colorado. The bill requires an employer to maintain records of a job title and wage rate history for each employee for a specified timeframe to be open to inspection by the Labor Commissioner. In addition, employers with 100 or more employees must provide median and mean pay gaps and contractor pay reports. This requirement means organizations will have to gather pay and demographic information from staffing companies, which has never been a requirement in the past. More information on reporting requirements can be found at this link.
*This information simplifies complex Acts as it is understood by Time Equipment Company. It is not to be taken as legal advice. The regulations for this program are changing. For further information, contact your state or local Department of Labor.