Prepare yourself, employers. The pay transparency law in Washington State takes effect on January 1, 2023, and requires employers to disclose salary and benefit information in job postings.
The Washington State Department of Labor and Industries (L&I) has released several versions of a draft administrative policy outlining the requirements to assist employers in complying. The details of the agency’s most recent clarification are provided below.
Which employers are required to comply with Washington’s pay transparency law?
The Washington salary range law is applicable to all businesses in Washington that employ 15 or more people in any business, industry, profession, or activity.
Employers that conduct business in Washington or hire for jobs (including remote positions) that could be occupied by Washington-based employees are subject to the law even if they do not have a physical presence in the state. As a result, the Washington pay transparency law has ramifications for businesses everywhere. Employers cannot avoid the requirements by refusing to hire Washington residents.
What constitutes a job posting?
Job postings are defined as “any solicitation aimed to recruit job applicants for a particular available position,” whether handled directly or through a third party.
The law applies only to job postings that include qualifications for positions, such as specific knowledge, skills, or abilities.
What information is required in job postings?
Employers must disclose 1) the opening wage scale or salary range and 2) a brief summary of all benefits and other compensation offered in each job posting. Employers must include a brief description of benefits and other compensation in electronic job postings, but they may choose to link to more precise information. The criteria also apply to employee-requested transfers and promotions.
Employers must provide the following opening wage scales or salary ranges:
- Establish, clearly define, and keep current the pay ranges formed for each role in active job postings
- Clarify all potential pay ranges for positions that can be filled with varying job titles based on experience
- Include the pay rate or pay range for jobs that are compensated through commission rates
- List the full compensation scale or range, in addition to the starting range or rate, when the employer plans to implement a starting range/rate, such as for a probationary period
A basic explanation of all benefits includes, but is not limited to, listing the types of insurance, healthcare, and retirement plans available; detailing the number of days or hours available for paid time off and holidays; and listing perks and benefits, if applicable.
Other forms of compensation may include but are not confined to, discretionary bonuses, commissions, stock options, a travel allowance, and relocation assistance. It is not necessary to disclose the total monetary value of other compensation.
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What are the repercussions of noncompliance?
Job candidates may file a complaint with L&I or file a civil lawsuit in court against noncompliant employers.
Employers who are found in violation may face actual damages, interest on owed compensation, disbursement for investigation and enforcement costs, punitive damages, attorney fees and costs repayment, and other forms of relief.
In a nutshell
Pay transparency measures, such as those implemented in Washington State and New York City, play an important role in ending workplace pay discrimination because they reveal wage disparities within an organization. It’s only a matter of time before other states and municipalities across the country follow suit.
A pay equity audit is recommended as a best practice for preparing for the upcoming pay transparency requirements. Because salary information included in external job postings will soon be made public, employers can benefit from a proactive pay equity audit. It will also help employers better comprehend their pay practices and identify compensation issues before concatenating salary range information to job listings.
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