Overview for Employers: More State Pay Equity Laws Coming Online
Courtney Blanchard outlines the three prongs of most pay equity laws around the country and talks about several new state laws coming online soon.
New pay equity requirements have already taken effect in 2019 in Alabama, California, Connecticut, Delaware, Hawaii, Illinois, Oregon, and the State of Washington. And this trend isn’t slowing down, as even more requirements are slated to take effect in fall 2019 and beyond, including in Colorado, Oregon, New York, and New Jersey. Employers should take care to review their recruiting, interviewing, and other hiring practices—many of these new laws join the growing, nationwide trend banning pre-employment inquiries about salary history. Below is a brief overview.
Clarke-Figures Equal Pay Act (Alabama): September 1, 2019. The Alabama statute prohibits discrimination on the basis of sex or race with respect to payment of wages and prohibits employers from discriminating or retaliating against applicants who do not provide a salary or wage history. The law is largely consistent with the federal Equal Pay Act.
Colorado Equal Pay for Equal Work Act: January 1, 2021. The new statute requires equal pay for “substantially similar work,” regardless of job title, and allows employers to defend a pay difference only based on specified factors such as: a seniority or merit system; a system that measures earnings based on factors related to production; geographic location; related education, training, or experience; or travel. Employers may not justify a disparity in wages based on an employee’s prior salary history. A “safe harbor” applies if the employer conducts a pay equity audit within two years before the filing of a lawsuit. The Act also forces employers to include salary ranges in all job postings, requires employers to announce internal openings to all personnel on the same day, and strengthens records retention requirements.
Illinois Equal Pay Act of 2003: Amendments Effective September 29, 2019. In Illinois, some amendments to the Equal Pay Act of 2003 have already become effective; namely, an expansion to cover wage discrimination for African-American applicants and employees. Effective September 29, 2019, the Equal Pay Act of 2003 will prohibit employers from asking applicants about salary history, screening job applicants based on current/prior salary history, or forcing employees to waive their right to disclose and discuss wages, salary, and benefits.
Maine Act Regarding Pay Equality: September 17, 2019. The Maine Act prohibits employers from asking applicants about their prior compensation until after the employer has made an offer and all compensation terms have been negotiated and offered to the applicant. The Act prohibits employment discrimination based on compensation history but does not preclude an applicant from voluntarily disclosing prior salary information. Employers may not prohibit their employees from discussing their own or other employees’ wages.
New Jersey Salary History Ban: January 1, 2020. The New Jersey law prohibits employers from asking applicants about salary or wage history and clarifies that when salary-history inquiries are directed toward a protected class under the State civil-rights law, these individuals are covered by the New Jersey Law Against Discrimination.
New York: Effective October 8, 2019. A new section of New York Labor Law will prohibit employers from seeking or relying upon the wage/salary history of applicants and current employees, or discriminating against employees based on wage/salary history or because the employee did not provide wage/salary history. Lawmakers also amended the State’s equal pay law to prohibit wage discrimination in “substantially similar work,” defining “protected class” to include age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, domestic violence victim status, and any employee protected from discrimination under New York’s civil-rights law.
Cincinnati, Ohio Salary History Ban: March 12, 2020. The City of Cincinnati adopted an ordinance making it illegal for employers to ask applicants about their salary or to rely upon salary history in hiring decisions or determining compensation. Employers are also banned from relying upon salary information voluntarily disclosed by an applicant to make decisions.
Oregon Equal Pay Amendments: January 1, 2020. Lawmakers amended the Oregon pay equity law to, among other things, bolster the safe harbor shielding employers from emotional distress and punitive damages. Now, employers need not eliminate unlawful wage gaps, but may demonstrate they conducted a pay equity audit that makes “reasonable and substantial” progress toward closing wage gaps.
Washington Equal Pay and Opportunities Act: July 28, 2019. Effective in late summer, Washington expanded its pay equity law to prohibit employers from discrimination pertaining to compensation or career advancement, bar salary/wage history inquiries for job applicants, and require employers to make wage/salary information available to employees upon request, after an offer is made (this includes new hires and transferred employees).