Pay Transparency to Current Employees – New Laws Require More Than Job Posting Disclosures

In 2021, employers had to grapple with a host of new pay transparency requirements across the country, which we previously outlined here.  While most of these concern requirements to provide salary range information to applicants to posted jobs, several require disclosure of salary range information to current employees under certain circumstances.  Employers who have addressed pay range disclosures in job postings are well-advised to also review their practices with respect to current employees to ensure compliance.

Here’s a rundown of salary range disclosure requirements currently in effect that impose requirements concerning current employees as well as those scheduled to come online in the next year.

On the books

  • Colorado: Employers must make “reasonable efforts” to “announce, post, or otherwise make known” to their Colorado employees “all opportunities for promotion”—and those notifications must include the “range of the hourly or salary compensation” for the post-promotion position if the opportunity exists (or the promotion is anticipated to take place) in Colorado.  Under the state labor agency’s interpretive guidance, current employees in Colorado must thus be notified of the salary range associated with any potential promotion in Colorado before the promotion—defined to include any in-line advancement—can take place.
  • Connecticut: Effective October 1, 2021, Connecticut requires employers to disclose “the wage range for the employee’s position” at three separate points in the employment relationship:  “(A) the hiring of the employee, (B) a change in the employee’s position with the employer, [and] (C) the employee’s first request for a wage range.”
  • Nevada: Also effective October 1, 2021, Nevada requires disclosure of “the wage or salary range or rate for the position” to any employee who satisfies all of the following:  they have (1) “applied for promotion or transfer”; (2) “completed an interview for the promotion or transfer or been offered the promotion or transfer”; and (3) “requested the wage or salary range or rate for the promotion or transfer.”  The key term “applied” is undefined in the statute, however.
  • Washington: Washington requires employers to furnish “the wage scale or salary range … upon request of an employee offered an internal transfer to a new position or promotion.”  Washington law further instructs that where no wage scale or salary range exists, an employer can comply by providing the “minimum wage or salary expectation set by the employer.”

On the horizon

  • New York City: On December 15, 2021, the New York City council passed a bill that would require employers to state “the minimum and maximum salary” in each “advertisement” for a “job, promotion or transfer opportunity.”   Exactly what constitutes an “advertisement” for a “promotion or transfer opportunity,” however, is undefined.  Similar to the Colorado law, the NYC law would define the required range to “extend from the lowest to the highest salary the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion or transfer opportunity.”  The bill is on the mayor’s desk; unless it is vetoed by new Mayor Eric Adams by January 14, 2022, the law will take effect in mid-April 2022.
  • Rhode Island: Beginning in 2023, Rhode Island will require employers to disclose the “wage range” for an employee’s position at several points in an employee’s tenure:  (1) on hire, (2) when the employee “moves into a new position,” and (3) “upon an employee’s”  Employers have flexibility in how they determine the “wage range” to disclose for a given position, however, as the law endorses any of the following methods of identifying the range to disclose to a current employee:
    • any applicable pay scale;
    • previously determined range of wages for the position; or
    • the range of wages for incumbents in equivalent positions, as applicable.

Takeaways

Employers with a presence in any of these states should review policies and practices to ensure compliance.  It may also be advisable to train employees in HR, recruiting, or hiring roles to ensure the required disclosures are being provided.

Employers should also consider whether and how to instruct responsible individuals to document that the required disclosures were provided.  Although none of the currently adopted laws require that pay range disclosures be in writing, employers should consider potential challenges in proving compliance should it be challenged months or years later (perhaps after the individual with the disclosure obligation has left the company).

Sophisticated employment counsel can help employers think through these challenges and decide on the best approach to cabin legal risk while taking account of administrative and operational challenges given the ever-evolving patchwork of requirements.