Understanding the Latest Pay Transparency Laws in the US for 2023

With growing interest from lawmakers, regulations on the amount of salary information employers must disclose to job applicants are becoming more common. California, Rhode Island, and Washington have implemented new "pay transparency" laws as of January 1, 2023, and New York State will follow suit in September 2023. Other areas, such as Colorado and New York City, have already implemented similar laws. Keeping up with these rapidly changing regulations can be challenging for HR and compliance professionals. This article provides an overview of the current pay transparency laws in the US for the new year.
 
Effective September 17, 2023

New York (state) Pay Transparency Law: What Employers Need to Kno

As of September 17, 2023, New York Labor Law §194-b will go into effect. This law requires all private employers with four or more employees to include salary ranges and job descriptions for all advertised jobs, promotions, and transfer opportunities in the state of New York. For commission-based positions, the advertisement must include a statement indicating that compensation will be based on commission. 
 
Effective January 1, 2023

California Pay Transparency Law: What Employers Need to Know
 
Effective January 1, 2023, California employers with 15 or more employees, at least one of whom is located in California, must include the "pay scale" in job postings. The pay scale is defined as the salary or hourly wage range the employer expects to pay for the position. Before this new law, employers were only required to provide the pay scale upon reasonable request. The California Labor Commissioner has stated that this requirement applies to any job posting where the position may be filled in California, whether in-person or remotely. Penalties for non-compliance can reach up to $10,000 per violation.
 
In addition to the pay scale requirement, the new California law also includes new reporting obligations for employers. Employers that meet certain criteria must now report median and mean hourly wages for each combination of race, ethnicity, and sex within a specific job category to the California Civil Rights Department. The initial reports, which must be based on data from 2022, are due on May 10, 2023. Failing to comply with these reporting requirements can result in penalties of up to $200 per employee.
 
Washington (state) Pay Transparency Law: What Employers Need to Know

Beginning January 1, 2023, employers with 15 or more employees must include in job postings the wage scale or salary range and a general description of all benefits and other forms of compensation that will be offered to the hired applicant. This general description of benefits must include information about health care benefits, retirement benefits, paid time off (such as sick leave, parental leave, and vacation), and any other fringe benefits that must be reported for federal taxes. Other forms of compensation, such as bonuses, commissions, profit-sharing, stock options, or any other additional compensation, must also be disclosed in the job posting.
 
The law defines a "posting" as any form of advertisement or recruitment for a specific job opening, whether it's done directly by the employer or through a third party. This includes electronic and printed advertisements that mention the qualifications of the desired applicants. Employers are also required to provide the wage scale or salary range for a new position or promotion upon request of an employee offered an internal transfer.
 
Rhode Island Pay Transparency Law: What Employers Need to Kno

The Rhode Island law differs from those in California and Washington in that it only mandates that employers provide a wage range upon request, rather than requiring the posting of anticipated salary ranges in job postings. Additionally, the law encourages employers to disclose the range before discussing the compensation with applicants. The law also applies to new hires and promoted employees, requiring employers to provide the wage range for their position at the time of hire and when they move into a new role. Employers must also provide the wage range for an employee's current position to request at any point during their employment.
 
New York City Pay Transparency Law: What Employers Need to Know

As of November 1, 2022, New York City employers with four or more employees must include "the minimum and maximum annual salary or hourly wage" in all job postings, both internal and external. However, employers are not obligated to disclose "other forms of compensation or benefits offered in connection with the advertised job" such as health insurance, severance pay, overtime pay, commissions, tips, bonuses, and stock. This law applies to all positions that can be filled by a candidate residing in New York City or that can be performed at least partly in New York City, whether the position is remote or in-person.
 
Effective October 1, 2021
 
Connecticut Pay Transparency Law: What Employers Need to Know
 
In Connecticut, employers with at least one employee must disclose a wage range to job applicants upon receiving either their request or an employment offer, whichever comes first. They must also provide the wage range for an employee's position at the time of hiring, position change, or the employee's first request. Additionally, the Connecticut Department of Labor has stated that this law applies even if the employee is working remotely from outside the state.
 
Nevada Pay Transparency Law: What Employers Need to Know
 
Nevada law requires that employers provide a wage or salary range to any applicant who has completed an interview for a given position. For employees receiving a transfer or promotion, the law requires employers to provide the wage or salary range if the employee has (1) applied for the promotion or transfer, (2) completed an interview for the promotion or transfer, or been offered a promotion, and (3) requested the wage or salary range or rate for the promotion or transfer. Employers can be fined up to $5,000 per violation.
 
Effective January 1, 2021
 
Colorado Pay Transparency Law: What Employers Need to Know
 
Employers with one or more employees in Colorado are required to “disclose in each posting for each job opening the hourly or salary compensation, or a range of the hourly or salary compensation, and a general description of all the benefits and other compensation to be offered to the hired applicant.” The law applies to internal and external job postings.
 
The Colorado Department of Labor has indicated that the law applies to remote workers working for a Colorado company, but an out-of-state employee without existing Colorado staff that posts a remote job is not covered by the law’s salary-posting requirement — even if a Coloradan applies for the job.
 
So What Can Employers Do?
 
As more states implement pay transparency laws, employers must stay informed and update their job posting policies accordingly to avoid penalties. Remote work may make compliance difficult as it can be unclear which jurisdiction's laws apply to a job posting. Some employers are responding by including salary ranges in all job postings and complying with stricter requirements in states such as California, Colorado, and New York City. Others are limiting remote work opportunities to avoid compliance. 
 
However, some states, such as Colorado, have rejected this approach. Ultimately, employers recruiting in states with pay transparency laws must comply with the new laws. Employers should also be aware that the salary ranges provided must be given in good faith, may be stated broadly, and may be qualified by factors such as experience or location, and other forms of compensation such as bonuses or equity opportunities do not need to be explicitly provided unless required by the state law.
 
REFERENCE:
The Latest and Greatest New Pay Transparency Laws
https://www.jdsupra.com/legalnews/the-latest-and-greatest-new-pay-3945022/