Hawaii Governor Josh Green recently signed into law a requirement that employers in Hawaii include in job listings information on the expected hourly rate or salary range for positions. The July 3, 2023 law is an amendment to Chapter 378, Part I of the Hawaii Revised Statutes regarding pay transparency and equal pay and is scheduled to go into effect on January 1, 2024. The amended law also modifies Hawaii’s existing equal pay law to provide increased protection for a broader range of protected classes.

PAY TRANSPARENCY REQUIREMENTS

The amendment creates a pay transparency requirement for Hawaii employers to include the hourly rate or salary range for all covered job postings. In doing so, the Hawaii legislature observed that requiring employers to disclose pay as part of a job advertisement “helps to increase pay transparency and equal pay for all employees.”

The legislature cited to similar pay transparency laws in California, Colorado, and New York City, noting that such laws have created efficiencies for employers, who now “spend less time interviewing because prospective employees will not apply to jobs with a pay level that they feel is too low,” as well as prospective employees, who are now armed with more information that can be used “to seek higher wages, thereby helping to reduce pay inequalities.”

Under the amendment, Hawaii employers must disclose in all job listings an hourly rate or salary range that reasonably reflects the “actual expected compensation.” The law does not apply to (1) positions that are internal transfers or promotions within a current employer; (2) public employee positions for which salary, benefits, or other compensation are determined pursuant to collective bargaining; or (3) positions with employers having fewer than 50 employees, although the amendment does not define whether the 50-employee threshold refers to employees within Hawaii or the employer’s total headcount.

Unlike the pay transparency laws of some other jurisdictions, the Hawaii law does not define the hourly rate or salary range, or include a requirement for employers to disclose other employment benefits along with the hourly rate or salary range. The Hawaii law also is silent regarding whether it applies to remote positions or, alternatively, is limited to roles that are specifically based in Hawaii.

EQUAL PAY MODIFICATIONS

The amendment also modifies the existing Section 378-2.3 of the Hawaii Revised Statutes regarding equal pay to include coverage for a broader range of protected classes in addition to sex, as well as expands the equal pay requirements to allow comparison of work that is “substantially similar” rather than “equal.”

Previously, Section 378-2.3 prohibited any employer from discriminating between employees “because of sex by paying wages to employees in an establishment at a rate less than the rate at which the employer pays wages to employees of the opposite sex in the establishment for equal work[.]” The amendment broadens this restriction in two key ways:

1. The amendment expands the list of protected categories covered by this section to include not only “sex,” but also “any protected category listed in section 378-2(a)(1),” which includes “race, sex including gender identity or expression, sexual orientation, age, religion, color, ancestry, disability, marital status, arrest and court record, reproductive health decision, or domestic or sexual violence victim status.”
2. The amendment expands the restrictions of the equal pay law to prohibit employers from discriminating by paying wages to employees “at a rate less than the rate at which the employer pays wages to other employees in the establishment for substantially similar work” for jobs requiring “equal skill, effort, and responsibility, and that are performed under similar working conditions.” The prior version of the law only applied to differences of pay based on sex for equal work. Thus, the amendment broadens the protections to allow comparison of employees who are performing “substantially similar work” rather than “equal work.” This change is consistent with the trend of other state equal pay laws that allow for comparison of “substantially similar work” rather than applying the Equal Pay Act’s more stringent “equal work” standard.

The amendment will modify Chapter 378, Part I of the Hawaii Revised Statutes concerning discriminatory practices. Section 378-4 shall continue to provide the Hawaii Civil Rights Commission with jurisdiction to enforce the laws under Part I, and the law permits aggrieved individuals to assert a private right of action.

NEXT STEPS FOR EMPLOYERS

Ahead of the law’s January 1, 2024 effective date, employers with employees in Hawaii should consider reviewing all covered job postings for compliance with the pay transparency requirements and continue monitoring for additional guidance from the Hawaii Civil Rights Commission. Employers should also consider continuing to monitor and evaluate their pay practices companywide, including by conducting a pay audit (and consider conducting the audit under privilege) to better understand their pay practices across positions.

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