Governor Ned Lamont signed into law June 7, 2021, the Act Concerning the Disclosure of Salary Range for a Vacant Position (Act). The Act, which goes into effect October 1, requires Connecticut employers to provide certain wage disclosures to applicants and employees.
The Act follows a growing trend to provide such wage range information to applicants and employees. California, Maryland and Washington have already passed similar laws.
Currently, Connecticut employers are prohibited from asking applicants about past compensation. Employees, however, are generally allowed to discuss their wages with other employees.
The Act also amends the state’s equal pay laws to require equal pay for “comparable” (rather than “equal”) work and clarifies that credentials, skills and geographic locations are acceptable factors that may justify a wage difference.
Wage Range Disclosure Obligations to Applicants and Employees
Under the Act, employers are prohibited from:
• Failing or refusing to provide an applicant for employment the wage range for a position for which the applicant is applying, upon the earliest of (a) the applicant’s request, or (b) prior to or at the time the applicant is made an offer of compensation.
• Failing or refusing to provide an employee 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.
“Wage range” is defined in the Act as the “range of wages an employer anticipates relying on when setting wages for a position, and may include reference to 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.”
An individual may bring a private right of action for a violation of the Act within two years of an alleged violation. An employer that is found to have violated the Act may be liable for compensatory and punitive damages, attorney’s fees and other legal and equitable relief.
Amendments to the Connecticut Equal Pay Law
The Act also amends Connecticut’s equal pay law, broadening the standard used to determine whether an employer is discriminating with respect to employee compensation based on sex. Currently, an employee alleging pay discrimination based on sex must demonstrate that their employer pays employees of one sex a lower wage than another for equal work that requires equal skill, effort and responsibility under similar working conditions. The Act, however, amends the law so that employees need prove only that the employer pays employees of one sex a lower wage than another for comparable (not equal) work when viewed as a “composite of skill, effort and responsibility under similar working conditions.”
Under Connecticut’s current equal pay law, defenses to claims of sex-based pay discrimination include that the difference in pay is made pursuant to: (1) a seniority system, (2) a merit system, (3) a system that measures earnings by quantity or quality of production or (4) a differential system based upon a bona fide factor other than sex, such as education, training or experience. The Act expands on this list of factors to include “credential, skill or geographic location.”
Steps for Employers to Take Now
Before October 1, 2021, Connecticut employers should inform human resources and other hiring staff about the Act’s requirements, create wage ranges for all positions if they do not currently exist and develop a system for responding to applicant and employee requests for wage range information. In addition, employers should consider conducting an audit of pay rates and job descriptions to ensure that there are no pay differences within each position that cannot be explained by one of the bona fide factors outlined in the Act.