Washington State Overhauls Equal Pay Laws After Seventy Five Years

On March 21, 2018, Washington Governor Jay Inslee signed into law amendments to Washington State’s Equal Pay Act, which had not been updated since 1943.  According to the text of the new law, it seeks “to address income disparities, employer discrimination, and retaliation practices, as well as to reflect the equal status of all workers in the State.”   The amendments constitute a significant overhaul to Washington’s equal pay law, and reflect continued momentum among states to provide statutory protections beyond the federal standard.

Prior to enactment of HB 1506, which was introduced in January 2017, Washington prohibited compensation discrimination based on “sex,” including with regard to promotion, where employees are “similarly employed.”  The new law modifies prior law and/or increases the scope of prohibited conduct in the following ways.

  • Defines “Similarly Employed.” Washington law now provides that individuals are “similarly employed” if the “performance of the job requires comparable skill, effort, and responsibility, and the jobs are performed under similar working conditions.”  This comparator standard now matches that of California, which amended its own equal pay act beginning on January 1, 2016.  Washington’s new law further clarifies that job titles alone are not determinative.  Notably absent from the law are provisions addressing location of the work performed.
  • Available Defenses. Similar to federal law, Washington’s new law provides there is no discrimination if a differential is based on a seniority system, a merit system, or a system that measures earning by quantity or quality of production.  Washington also recognizes a “bona fide regional difference in compensation levels.”  Moving beyond the federal requirements, however, Washington increases the burden on the employer to prove that these defenses, or any other “bona fide job-related factor” on which the employer relies, are (1) based in good faith, (2) consistent with business necessity, (3) not based on or derived from a gender-based differential, and (4) account for the entire differential.  The law expressly clarifies that reliance an individual’s prior salary is not a defense.
  • Protections Beyond “Sex” and “Wages. Washington has expanded its law to now prohibit compensation disparities based on “gender” instead of “sex,” and deletes reference to “males” and “females.” The new law also now prohibits discrimination based on “compensation” (including benefits) instead of “wages.”
  • Employment Opportunities. Although Washington previously prohibited discrimination in terms of compensation and promotion, the new law expands protections against discrimination in the form of limiting or depriving an employee of “career advancement opportunities” that would otherwise be available but for an employee’s gender. In this sense, Washington’s equal pay law not only goes further than federal law, but also includes prohibitions not found in most other states’ equal pay laws, including California’s.
  • Wage Transparency. In an effort to increase pay transparency, Washington now prohibits the following employer practices: (1) requiring nondisclosure of wages as a condition of employment or otherwise requiring an employee to sign a document that prevents self-disclosure of an employee’s wages; and (2) retaliation against an employee for discussing their own wages, discussing the wages of other employees, asking the employer to justify perceived differentials with regard to wages or employment opportunities, or aiding/encouraging other employees to exercise their rights.  As one specified limit to this law, employers may prohibit employees with access to confidential compensation information as part of their “essential job duties” from disclosing the wages of other employees, unless the disclosure is in response to a complaint/charge, in furtherance of an investigation, or consistent with the employer’s legal reporting duties and the employees essential job junctions.
  • Retaliation. The new law expressly prohibits retaliation against an employee for exercising their rights under the provisions explained above.
  • Department Oversight and Remedies. In addition to traditional civil suits, the new law also includes numerous provisions related to enforcement and penalties, as governed by the Department of Labor and Industries.  The law authorizes employees to file complaints directly with the Department, which is now authorized to investigate claims and impose penalties of actual damages and statutory damages equal to actual damages or $5,000 (whichever is greater), as well as award the employee’s costs and fees, with a reach back of four years.

Washington’s new law will take effect shortly on June 7, 2018.  Employers are encouraged to carefully analyze existing policies and practices to ensure compliance with the above provisions.