Effective October 1, 2021, Connecticut employers will face a host of new pay transparency obligations. In addition, they will need to analyze—and defend—pay difference under a new, more expansive framework.
With respect to transparency, the new law will require employers of Connecticut employees to disclose to applicants and employees the salary ranges for positions. Specifically, employers must:
- Provide an applicant the wage range for the position for which the applicant is applying upon the earlier of
- (a) the applicant’s request, or
- (b) prior to or at the time the applicant is made an offer of compensation.
- Provide an employee the wage range for the employee’s position upon
- (a) the hiring of the employee,
- (b) a change in the employee’s position with the employer, or
- (c) the employee’s first request for a wage range.
“Wage range” is defined as: “the range of wages an employer anticipates relying on when setting wages for a position.” The wage range may include reference to applicable pay scales, previously determined wage ranges for the position, the actual range of wages for those employees currently holding comparable positions, or the employer’s budgeted amount for the position.
The law defines covered “employers” and “employees” broadly in a way that leaves open the question of whether these transparency obligations extend to employees who work remotely in Connecticut for employers located in a different state. If Connecticut follows Colorado’s lead in interpreting its own new pay transparency requirements, remote workers will be covered.
An employee or prospective employee may bring a civil action for claimed violations of the Connecticut law’s pay transparency requirements within two years of a violation. A successful claimant may obtain compensatory damages, attorneys’ fees and costs, as well as possible punitive damages.
The law also broadens the standard for identifying gender-based pay discrimination. Previously, Connecticut required that employers not pay an employee less than what they paid an employee of the opposite sex for “equal work.” Like recently enacted laws from California and several other states, Connecticut now requires that employers not pay an employee less than what they pay an employee of the opposite sex for “comparable work.”
Work is considered “comparable … when viewed as a composite of skill, effort and responsibility and performed under similar working conditions.” An employer seeking to justify a discrepancy in pay bears the burden of showing that the difference is based on factors other than gender, such as credentials, skills and/or geographic location, or other factors already enumerated in the statute (i.e., education, training and experience).
As they prepare for the law to become effective on October 1, 2021, effective date, employers of employees in Connecticut should consider taking the following steps:
- Develop and document bona fide wage ranges to provide in response to Connecticut employees’ and applicants’ inquiries;
- Develop systems for timely responding to Connective applicants’ and employees’ requests for wage range information and train recruiters, hiring managers, and HR on those systems;
- Conduct a pay equity audit for Connecticut employees—or refresh prior audits—applying the new law’s “comparable work” framework in order to proactively identify and remediate any gender pay disparities that could now pose a risk of claims or litigation.