In recent years, there has been an increased focus on ensuring that employees are receiving equal pay for equal work, which has resulted in a wave of new legislation geared towards closing the wage gap. One recent trend has been the imposition of pay transparency requirements for employers, including wage range disclosure obligations requiring employers to provide or publicize wage ranges for vacant positions or promotions. Specifically, several states have enacted pay transparency laws which vary significantly in terms of where, when, how, and to whom the necessary disclosures must be made, as well as the specific information that must be disclosed. Failure to comply with these laws could result in significant liability for employers, including civil actions for violations. As a result, it is important that employers understand their obligations under these laws in the states where they operate.
First, several states require employers to disclose pay ranges to certain prospective employees upon request. For example, California law requires employers to provide job applicants with the salary or hourly wage ranges for positions upon the applicant’s reasonable request, provided the applicant has completed an initial interview with the employer. Similarly, Maryland law requires that employers provide a job applicant with the wage range for the position for which the applicant applied upon request, and Washington law requires that employers provide the wage scale or salary range for the position upon an job applicant or employee’s request, provided the request is made after an initial offer of employment.
Connecticut law takes one step further in requiring disclosure of wage ranges even if the applicant or employee has not expressly requested such information. Specifically, Connecticut employers must provide prospective employees with wage range information before or at the time an offer of compensation is made, or at the applicant’s request, whichever occurs first, and must also provide employees with wage range information upon hire, upon a change in the employee’s position, or upon the employee’s first request for such information. Under this law, in establishing the wage range for a particular position, employers may reference any applicable pay scale, previously determined range of wages for the position, actual range of wages for employees who currently hold comparable positions, or the budgeted amount for the position.
Colorado has implemented perhaps the strictest disclosure requirements so far, in requiring that employers disclose the pay, or pay range, of a position in the job posting itself. Specifically, covered employers in Colorado, meaning employers who employ one or more employees in the state, must disclose compensation and benefits information for all positions in the job posting for the position; the job posting must include (or include a link to) the hourly rate or salary compensation (or range thereof), a description of any bonuses, commissions, or other forms of compensation being offered for the job, and a description of all employment benefits that the employer is offering for the position; similar disclosure obligations apply for promotions as well. Notably, these pay disclosure requirements apply to all positions in Colorado, including any remote positions which could be performed in Colorado.
In sum, employers should remain cognizant of their pay disclosure, notice, and posting obligations under the laws in the states where they operate and revise applicable hiring and employment documents, materials, procedures, and processes accordingly.