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July 13, 2022

Wage Transparency Laws Are Here to Stay

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Background

Some employers wish to post job openings without providing a salary range. They also would like to ask applicants about their salary history. Although this may benefit the employer in the negotiation process, asking about an applicant's salary history and not providing salary information may be unlawful. Legislators have been concerned that employers' lack of transparency in job listings and inquiries about salary history may disproportionately impact women, people of color, or those from other underrepresented groups.

Since 2019, it has been unlawful for California employers to ask applicants to disclose their salary history (Cal. Lab. Code § 432.3(b)). It also is unlawful in other states: Maryland (Md. Code, Lab & Emp. § 3-304.2), Rhode Island (RI S0270 (2021)), and Washington (RCW 49.58.100). For several years, California also has required employers to disclose their salary or hourly pay range for open positions if a candidate specifically asks for a pay scale (Cal. Lab. Code § 432.3(c)). Connecticut and Maryland followed suit. (Conn. Gen. Stat. § 31-40zMd. Code, Lab & Emp. § 3-304.2.) Now some states and localities are taking further action by requiring employers to disclose their pay scale to potential employees in the first instance.

Recent Developments

In 2021, Colorado began requiring companies to list a job's compensation in any job postings  (C.R.S. § 8-5-201). Nevada passed similar legislation in 2021, requiring employers to provide applicants with a wage or salary range after an initial interview (N.R.S. § 613.133).

Beginning in January 2023, Washington, like Colorado, will require all employers with 15 or more employees to disclose the wage or salary range and a general description of benefits and other compensation to be offered to any job applicants (SB 5761 - 2021-22). Washington's statute further provides that a job "posting" includes announcements made through third parties or digital job boards.

Similarly, starting in November 2022, New York City will require that employers with as few as four employees provide a statement of the minimum and maximum salary or wage when advertising a job (Int. No. 134-2022). The law specifically excludes those positions that cannot or will not be performed, at least in part, in New York City. The New York City law, however, provides employers with some leniency, as the penalty for the first violation of the law is $0 and employers have 30 days to correct the violation.

The Future

U.S. employers should be mindful of legislation on pay issues in the states where they do business, as well as in the specific cities where they operate or where their employees perform work, especially those who do business in employee-friendly jurisdictions like California and Massachusetts. As a proactive measure, employers that operate in multiple states may also wish to consider publicizing salaries in all job postings as well as implementing policies to ensure that recruiters and others involved in the hiring process do not ask applicants about their salary history, even in states where these steps are not required.

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

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