A few weeks back we sent out a post titled “Labor Laws That Could Be Coming To Your State” and as promised we want to help keep you up to date on these laws. We found this article from GovDocs that gives great detail into the states that are now requiring Pay Transparency and what it means for you if you live in those states.
What is Pay Transparency?
As workers and lawmakers continue to push for enhanced employee rights, pay transparency laws are becoming more common.
These laws require employers to be more, well, transparent with salary ranges and benefits. Depending on the jurisdiction, these laws require employers to:
- Provide applicants the salary range for a posted position at a specified point during the hiring process
- Provide employees salary range upon request, when changing jobs, or upon hire
- Include salary range in job postings
Quick update: Employment Law News will have an update on the New York State pay transparency law soon. (New York State Pay Transparency Law)
Pay Transparency Laws
Below is an at-a-glance list of the locations and corresponding effective dates that require disclosure of pay range under certain circumstances. Each law is different, so employers should review each specific jurisdiction’s requirements to ensure compliance:
- California – effective Jan. 1, 2023
- Colorado – effective Jan. 1, 2021
- Connecticut – effective Oct. 1, 2021
- Maryland – effective Oct. 1, 2020
- Nevada – effective Oct. 1, 2021
- Jersey City, N.J. – effective April 13, 2022
- Ithaca, N.Y. – effective Sept. 1, 2022
- New York City – effective Nov. 1, 2022
- Westchester County, N.Y. – effective Nov. 6, 2022
- Cincinnati – effective March 13, 2020
- Toledo, Ohio – effective June 25, 2020
- Rhode Island – effective Jan. 1, 2023
- Washington – effective Jan. 1, 2023
As of this writing, several jurisdictions in the U.S. have some form of a pay transparency law. But more could be on the horizon.
Of course, as with all aspects of employment law, each jurisdiction handles these requirements differently.
Starting at a high level, some states have laws that require employers to disclose the pay range for a position if the applicant asks for it:
- California (California pay transparency law update)
- Rhode Island
Even among these states, there is some variation in how they implement their pay transparency laws.
Connecticut’s law requires employers to provide salary range information to applicants by the time they extend an offer of compensation — even if the applicant did not request it.
Meanwhile, employees are entitled to salary range upon hire and when changing roles, in addition to upon request.
In Nevada, employers must disclose the salary range to applicants who have completed an interview for the position.
Also, salary range information must be given to employees for a promotion or transfer if the employee has applied, completed an interview or has been offered the position (and if requested).
Effective January 2023 in Rhode Island, employees will be entitled to salary range upon hire, when changing jobs and upon request.
In Washington (more information below), salary range information must be provided to employees changing roles if requested.
Pay Transparency Laws: Job Postings
Some jurisdictions go further regarding pay transparency laws and require salary ranges to be listed in job postings.
New York City
Starting with the latest news on the pay transparency front, the effective date of New York City’s pay transparency was delayed.
It now goes into effect Nov. 1, 2022, rather than mid-May 2022. And city officials also made some tweaks to the ordinance.
At a high level, employers in November 2022 must include “good faith” estimates of salary ranges in job advertisements, as well as for promotions or transfers.
Additionally, New York provided some clarification regarding the law.
The law now applies only to jobs performed within New York City, including an employee’s home if they work remotely.
Regarding pay transparency, the city council changed the law to require salaries or hourly wages instead of “compensation.”
Employers also will not suffer penalties for an initial violation of the law as long as it is corrected within 30 days of receiving a complaint from the New York City Commission on Human Rights (NYCCHR). Subsequent violations, however, would not receive the same leeway.
The NYCCHR has provided a two-page fact sheet regarding the law, which outlines other information, including:
- Employers must post maximum and minimum salary ranges, not “$15 an hour and up” or “maximum $50,000 per year”
- Salary does not include other compensation, such as health insurance, paid time off, 401(k) plans, etc.
- The law also applies to promotions or transfer opportunities
- Clarifies the status of employment agencies and temporary help firms
Lastly, covered listings include postings on internal bulletin boards, internet advertisements, printed flyers distributed at job fairs and newspaper advertisements. The law does not prohibit employers from hiring without using an advertisement or require employers to create an advertisement in order to hire.
California can’t always be first when it comes to employment law.
Colorado was the first state to pass a pay transparency law regarding job postings.
It applies to Colorado employers with at least one employee, as well as out-of-state employers, which has become an issue for some companies. There has been pushback among some employers that have decided not to consider applicants in Colorado for remote jobs specifically because of the law.
In addition to the including pay ranges in job postings, Colorado employers must give formal notice of internal opportunities for promotion on the day the opening occurs to employees in the state.
Starting Jan. 1, 2023, many employers in Washington State must disclose the salary range, or wage scale, and a description of all benefits and other compensation in job posting.
It applies to employers with 15 or more workers. The pay transparency law amended Washington’s existing requirements that employers must disclose wage information to applicants only upon their request.
Under the amended law, job postings are not required, but if job postings are used, employers must include the appropriate disclosures, effective Jan. 1, 2023.
A “job posting” is defined as:
“Any solicitation intended to recruit job applicants for a specific available position, including recruitment done directly by an employer or indirectly through a third party, and includes any postings done electronically, or with a printed hard copy, that includes qualification for desired applicants.”
Employers still need to provide salary range or wage scale upon request to employees offered a new position, promotion or internal transfer.
Continue reading the rest of this informative article at GovDocs to find more critical information for adhering to your jurisdiction’s pay transparency laws. The article receives updates as new laws are brought into effect, so make sure to keep up with your area’s legislature.
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