Washington’s New Pay Transparency Law: The Washington State Department of Labor and Industries (“L&I”) announced its final administrative regulation regarding the Washington Equal Pay And Opportunities Act (“the Equal Pay Act”) just in time for implementation of the eagerly anticipated Washington salary posting rules.
Companies’ many unanswered concerns about how they should adhere to the new wage disclosure obligations starting on January 1, 2023, are addressed in this new policy, number ES.E.1 (“the Policy”).
The Policy clarifies which employers must adhere to wage disclosure requirements, what should be included in job postings for applicants, and what existing employees seeking new positions should be informed of, in addition to outlining the rights of current and potential employees under the Equal Pay Act.
Wage Scale Or Salary Range Disclosure Requirements
The Equal Pay Act mandates that all companies with “15 or more employees, operating in any business, industry, profession, or activity in Washington” declare a wage scale or compensation range for any new job posting. This is made clear in the policy.
Who Must Comply?
Even if all other employees are not physically situated in Washington, the “15 or more employees” requirement is satisfied if an employer has at least one employee who works there. An employer who does not have a physical presence in Washington but conducts business there or hires candidates for positions Washington residents could fill is likewise subject to the disclosure requirements.
Thus, the job advertisement for that position must provide a pay scale or salary range and a broad description of perks and other compensation if it might be filled by a remote worker living and working in the state of Washington. The Policy is explicit that an employer cannot avoid disclosing information by making it appear in the posting that it does not accept applications from Washington State.
On the other hand, even if the job advertising reaches applicants in Washington, a business is not required to provide wage and salary information for work outside Washington. This restricted out-of-state exemption needs to be used sparingly and individually and should be connected to a particular worksite outside of Washington. Employers are also not required to include income and salary information in printed, hard-copy postings exclusively dispersed outside of Washington.
Who Does This Law Protect?
The amended Equal Pay Act protects all applicants who apply to a posting seeking employees in Washington. An individual is only regarded as an “applicant” for the specific posting or postings they applied for. In addition to potential employees, applicants may also be current employees applying for a different position with their business.
What Must Be Disclosed?
As of January 1, 2023, applicable companies must include a broad description of all perks and other remuneration in each job posting, along with the pay scale or salary range.
Wage Scale Or Salary Range
The employer’s most reasonable and sincere expectation of compensation for the position should be reflected in the wage scale or salary range. The range should go from the lowest to the company’s maximum payment before posting the job. The company must create a wage scale or salary range for a position if one doesn’t exist before posting the job.
Notably, the Policy seems to place more emphasis on the content of pay defined for the position as a whole than on the compensation range that the company anticipates paying the chosen applicant. Further, the Policy stipulates that if an employer “intends to impose a starting range” or “starting rate” for a probationary term or initial timeframe of employment, the starting range or rate may be published on the posting.
Still, the whole scale or scope must also be listed on the posting.” (I added emphasis). This method may not be the same as how other state and local agencies have interpreted the statutes governing salary range disclosure in those jurisdictions (e.g., Colorado and New York City).
A posting’s indicated scale or range must be left open-ended at either the top (i.e., $60,000 per year and higher) or the bottom (“up to $29.00/hour”), according to the Policy. Additionally, if a position is paid on a commission basis, the employer must specify the rate or range that will be provided. A piece rate or wage scale should also be included if the task is paid on a piece rate basis.
General Description of All Benefits or Other Compensation
Employers must provide a “general description of any benefits or other compensation” in addition to the employee’s pay scale or salary range. This includes, but is not limited to, health insurance benefits, retirement benefits, any benefits that allow paid time off (such as parental leave, paid time off, or vacation), discretionary bonuses, stock options, commissions, or other types of pay.
Employers are not required to include the entire dollar amount of benefits provided, although they are free to do so.
Can I Negotiate?
What if you want to offer a salary that is higher or lower than the range or wage scale that is publicly posted? According to the Policy, the employer must amend the posting to reflect any changes to the wage scale or compensation range after a posting has been made. Additionally, it implies that if an employer offers a position other than the one the applicant applied for, they should reveal the pay scale or compensation range for that particular position.
L&I notes that companies may use a link or hyperlink to direct the application to a more thorough explanation if the job advertisement is electronic. Similarly, only one listing is required if the details of benefits and other payments are already available on the original or subsequent web pages. Employers are nevertheless obligated to ensure that all links are active, even if external administrators look after them.
What Should You Do To Prepare?
Employers hiring in Washington in 2023 should ensure that every job posting intended to attract a job applicant contains the necessary wage scale or salary range and a general description of all the benefits and other compensation for the particular position. If you haven’t done this already.
Remember that the Equal Pay Act carries severe penalties, including damages up to $5000 (whichever is greater), $500 to $1000 in civil penalties per violation, expenses, and reasonable attorneys’ fees. You can get help with these disclosures and get any questions you might have answered by Seyfarth’s Seattle office.