On June 7, 2021, Governor Lamont signed into law “An Act Concerning the Disclosure of Salary Range for a Vacant Position,” which amends Connecticut General Statutes §§ 31-40z and 31-75. As you might have guessed, the law requires employers to disclose the “wage range” for a position to both job applicants and current employees.  Not so obvious is that the law applies to currently filled positions as well, not just those that are vacant. 

Broadening Pay Equity

The law also does more to address sex-based compensation discrimination by broadening an employer’s “equal pay” requirements to require “comparable” pay for “comparable” work, replacing the current statutory language which uses the term equal work.  Under current law, employers are prohibited from paying someone of the opposite sex less for equal work. Under the new law, a female employee must be paid an equivalent wage to a man for comparable work.  The law provides that “comparable” is “viewed as a composite of skill, effort and responsibility and performed under similar working conditions.”  If an employer wants to pay a woman less than a man for comparable work, the employer must demonstrate that the difference is based on factors other than gender, such as experience, credentials, skill and/or location, as well as other statutory factors.

Required Disclosures

Effective October 1, 2021, Connecticut law will require employers to provide specific disclosures to job applicants and employees.

• To job applicants – employers must provide the wage range for the position the applicant is applying to (A) upon the applicant’s request, or (B) prior to or at the time the applicant is made an offer of compensation.

• To current employees – employers must provide the wage range for the employee’s position upon (A) the hiring of the employee, (B) a change in the employee’s position with the employer, or (C) the employee’s first request for a wage range.

The amended law now defines “wage range” to mean “the range of wages an employer anticipates relying on when setting wages for a position.” Thus, a wage range may reference any applicable pay scale, previously determined range of wages for the position, actual range of wages for those employees currently holding comparable positions or the employer’s budgeted amount for the position.

Does a wage range also have to include disclosure of potential bonuses? It depends. The law defines “wages” to mean “compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation.” If an employer issues purely discretionary bonuses, then a wage disclosure probably will not have to include that bonus. If an employee is otherwise entitled to a bonus, and that bonus is part of the employee’s compensation package, then it is likely an employer will have to include that with the wage range disclosure.  Hopefully additional regulations will be issued to clarify this and other issues which may arise for employers as they prepare to comply with these new requirements.

An employer who fails to make a wage range disclosure will violate the amended law and will be exposed to both legal and financial consequences, since employees and job applicants may bring a civil action within two years of an alleged violation. An employer may face liability for compensatory damages, attorney’s fees and costs, punitive damages, and other equitable relief.

Takeaway

Employers should examine their internal protocols, including on-boarding, hiring, and recruiting, to ensure that they will be in compliance with these new requirements once they go into effect. There should also be a system in place for employers to respond to requests by employees for their respective wage ranges.  Employers should also note that these amendments do not alter or change an employer’s inability to prohibit employees from discussing or disclosing wages with each other, or the prohibition against inquiring into a prospective employee’s wage and salary history, for example.  Employers should be mindful of these complexities and consult counsel as issues arise to ensure full compliance with applicable laws and regulations.

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