Federal Law

The Salary Transparency Act, H.R. 68501, is a bill that was introduced on February 25, 2022, where it was referred to the House Education and Labor Committee. No action on this bill is expected during the 117th Session of Congress. If passed into law as drafted, H.R. 6850 will require an employer providing an employment opportunity to disclose the wage range for the job to employees and other applicants. It will apply to any public or internal posting for employment. It will make it unlawful for employers to fail or refuse to post the wage or wage range, or to fail or refuse to disclose the wage or wage range before discussing compensation with the applicant. Furthermore, it will require employers to provide annually, and upon an employee’s request, its employees wage range information. Finally, it will be unlawful for an employer to refuse to hire or promote an individual in retaliation for their exercising their rights under this section.

The bill sets out civil penalties ranging from $5,000 to $10,000. It also creates statutory damages for the complainant ranging from $1,000 and $10,000, or actual damages (whichever are greater), plus attorney’s fees.

California

California was the first state to legally require employers to provide a salary range for jobs listed, if candidates asked for it after an interview. The California Equal Pay Act was passed in 2016 and is updated annually. Not only does the law prevent employers from asking about a candidate’s prior salary history, but it also prohibits an employer from paying its employees less than employees of the opposite sex, race or ethnicity for equal work. Under the Equal Pay Act, as amended effective January 1, 2019, an employer may not justify any pay difference between employees of the opposite sex, or employees of different race or ethnicity based on an employee’s prior salary.

The Equal Pay Act (EPA) applies to all employers regardless of their size. Under the EPA, an employee must file a claim within two years from the date of the violation, three years if the violation was willful. Each paycheck that reflects unequal pay is considered a violation for the purpose of calculating filing deadlines. An employee who has experienced an Equal Pay Act violation can file a claim with the Labor Commissioner’s Office or file an action in court.

Colorado

Colorado’s Equal Pay for Equal Work Act took effect in January 2021 and requires employers to list the pay range and benefits for every job opening, notify employees of promotional opportunities, and to keep job description and wage rate records. This Act covers individuals and entity “employers,” public or private, that employs at least one (1) person in Colorado.

The Act requires disclosing compensation and benefits “in each posting for each job which must include (1) the rate of compensation, including salary and hourly, piece, or day rate compensation; (2) a general description of any bonuses, commissions, or other compensation; and (3) a general description of all benefits the employer is offering for the position. An employer must also keep records of each employee’s job description and compensation. Actions may be commenced by a person filing a complaint with the state, or by the state if it receives information that an employer may have violated or retaliated against an employee for exercising rights under the law. In turn, the state can order the employer to undertake actions to bring itself into compliance and remedy the violation, and/or issue fines of $500 to $10,000 for each violation of the law.

Connecticut

The Connecticut law took effect in October 2021 and prohibits employers from failing or refusing to provide a job applicant with the wage range of the position for which the applicant is applying. The employer must provide the wage range before or when offering the job to the applicant, or when the applicant requests it during the application process, whichever is earlier.

Under the act, an employee or prospective employee has two years to bring an action in court for a violation. A successful employee or prospective employee can obtain compensatory damages, attorney's fees and costs and even punitive damages. The law allows an employer accused of wage discrimination to defend itself by showing that a pay difference is based on a (1) seniority system; (2) merit system; (3) system that measures earnings by production quantity or quality; or (4) differential system based on a bona fide factor other than sex, such as education, training, or experience.

Delaware

The Delaware law, which took effect in December 2017, made it unlawful for an employer or employer’s agent to screen applicants based on their compensation history or seek compensation history from applicant or current or former employer. An employer or employer’s agent who violates or fails to comply with the requirements could be subject to a civil penalty of no less than $1,000 to no more than $5,000 for the first offense and no less than $5,000 to no more than $10,000 for each subsequent violation.

Illinois

Illinois recently enacted SB 14805, which amends several laws including the Illinois Business Corporation Act and the Illinois Equal Pay Act. Based on the express terms of the statute, these new reporting requirements will begin on or after January 1, 2023. While employers have time to begin their compliance efforts, SB 1480 will render employers’ diversity efforts more transparent by making public the content of their EEO-1 reports which will be published on a state website beginning in early 2023. Illinois employers will also need to begin reviewing and potentially modifying their compensation practices immediately to obtain an equal pay registration certificate, which will be required as of March 24, 2024.

Maryland

In 2020, Maryland updated its 2016 Equal Pay for Equal Work law to now require all employers to provide the wage range for a given position to a job applicant upon request. It also bans employers from asking candidates about their salary history. Employers are prohibited from requiring an employee to sign a waiver that would deny the employee the right to disclose or discuss their wages, and from taking any adverse employment action against an employee for inquiring about the employee’s own wages.

If an employee thinks their rights have been violated under the Equal Pay for Equal Work law, they may bring an action against the employer for injunctive relief, to recover actual damages and for an additional equal amount as liquidated damages. Actions under this law are commenced by the written request to the Commissioner by an aggrieved employee, which request is then forwarded to the state’s attorney general to bring an action against the employer for such violation.

Nevada

As of October 2021, private employers and certain public employers in Nevada are no longer allowed to request or rely upon a job applicant’s wage history to determine the applicant’s pay rate. Senate Bill 293 was enacted to promote equal pay within the State of Nevada and can require employers to make immediate changes to their hiring process. This law prohibits private employers in Nevada from seeking the wage or salary history of an applicant. Nor can an employer rely on wage or salary history to determine whether to offer employment or the rate of pay. Furthermore, the employer cannot refuse to interview, hire, promote, employ or otherwise discriminate against an applicant if the applicant does not provide a wage or salary history.

The law also requires employers to provide applicants with wage or salary range for the position once an applicant has interviewed for the position. This also includes employees who have applied for promotions or to transfer within the company. Employers who violate the law may be subject to civil penalties, including attorney costs, for violations.

New Jersey – Jersey City

The City of Jersey City adopted the Pay Transparency Ordinance on March 23, 2022. The Ordinance requires employers in the city to post in job offerings minimum and maximum salary and/or hourly wage, and benefits. This also applies to promotion and transfers within the company.

New York – Ithaca

The City of Ithaca issued an Ordinance amending its city code to make it unlawful discriminatory practice for an employment agency, employer, employee, or agent to advertise a job, promotion, or transfer opportunity without stating the minimum and maximum salary or hourly wage compensation. The Ordinance will take effect on September 1, 2022. The law does not apply to employers who employ fewer than four employees, or who advertise for temporary employment.

New York – New York City

On May 12, 2022, New York City enacted a Salary Disclosure Law requiring employers to post minimum and maximum salary information. This law applies to employees who are paid hourly or through an annual salary, and it does not apply to positions that cannot or will not be performed in New York City. A person would not be able to bring a lawsuit against an employer based on this law unless that individual is a current employee who is bringing an action against their employer for advertising a job, promotion, or transfer without posting a minimum and maximum hourly wage or annual salary. Violations of this law would be subject to penalties provided under the NYC administrative code, but first-time offenders could cure any defects within thirty days of being served with a complaint.

New York – Westchester County

On May 9, 2022, the Board of Legislators amended the Westchester County law to prohibit employers from posting listings of job positions without minimum and maximum salary information. That law requires all employers in the county with four or more employees to disclose the minimum and maximum salary for each job, promotion, or transfer opportunity. The law does not cover advertisements for temporary employment at a temporary help firm but does cover any position that is required to be performed, in whole or in part, in the county, whether from an office, in the field or remotely. Violations of this amendment would be subject to any of the appropriate penalties listed in the country’ administrative code.

Ohio- Cincinnati

On March 13, 2020, the City of Cincinnati’s Ordinance No. 83 Prohibited Salary History and Use took effect. Under the ordinance, all employers located within the city with fifteen or more employee, including referral and employment agencies, are required to provide a wage range for given positions to job applicants upon request, provided the applicant has been given a conditional offer of employment for the position. The ordinance makes it unlawful for an employer or agent to inquire about salary history of job applicants, screen job applicants based on their current or prior wages, rely on the salary history of an applicant in deciding whether to offer employment, or refuse to hire an applicant for not disclosing their salary history. If an employer, employment agency, or employee or agent thereof fails to comply with any provision of the ordinance, the applicant could bring a cause of action against the employer, employment agency, or employee or agent within two years for compensatory damages, reasonable attorney's fees, the costs of the action, and such legal and equitable relief as the court deems just and proper

Ohio – Toledo

The City of Toledo’s law, “Pay Equity Act" to Prohibit the Inquiry and Use of Salary History in Hiring Practices took effect in June 2020. The law prohibits an employer from inquiring, screening, or relying on an applicant’s salary history for employment. All employers located within the city with fifteen or more employees fall under the law’s jurisdiction. Employers are required to provide a wage range for a given position to the job applicant. If an employer, employment agency, or employee or agent thereof fails to comply with any provision the law, the applicant could bring a cause of action against the employer, employment agency, or employee or agent within two years for compensatory damages, reasonable attorney's fees, the costs of the action, and such legal and equitable relief as the court deems just and proper.

Rhode Island

Rhode Island’s Pay Equity Act takes effect on January 1, 2023. The Act is intended to combat wage discrimination by requiring all employers to provide a pay range or rate for a given position to an applicant upon request. This must be done at the time of the employee’s hire, when an employee moves into a new position, and upon request throughout the course of employment. The Act will prohibit employers from inquiring about an applicant’s current or prior wage or salary history or rely upon an applicant’s current or prior wage or salary in making hiring decisions. The Department of Labor will carry out enforcement of this Act; and will not impose penalties for any violations identified prior to January 1, 2024. The Department of Labor will also make available a self-evaluation to employers for purposes of attempting to establish an affirmative defense to liability or reduction of liability.

Washington

Washington has amended its Equal Pay and Opportunities Act (EPOA) for the second time to require employers to include wage and benefit information in their job postings. This amendment is scheduled to take effect on January 1, 2023. The wage disclosure requirements apply to employers with fifteen or more employees. The employer will be required to disclose in each posting for each job position the wage scale or salary range, and a general description of all benefits and other compensation to be offered. This includes employees offered an internal transfer to a new position or promotion within a company.

An individual may either file a complaint with the Department of Labor or file a lawsuit if they believe a violation has occurred. The potential remedies include actual damages, double statutory damages (or $5,000, whichever is greater), interest of one percent per month, and payment of costs and attorneys’ fees. The Department of Labor may order payment of civil penalties in response to employee complaints, ranging from $500 for a first violation to $1,000 or 10% of damages (whichever is greater) for a repeat violation, in addition to recovery of wages and interest calculated back four years from the last violation.