Heads up: 2 New Pay Transparency Laws Are Here
The push for pay transparency isn’t going away, as evidenced by new pay transparency legislative developments in two jurisdictions.
Maryland and Washington, D.C., have passed new pay transparency legislation that is set to take effect at the start of October and the end of June of this year, respectively.
Maryland expands pay transparency requirements
Even before the new Maryland law was passed, state legislators were not entirely new to the pay transparency game.
Under a state law that took effect in October of 2020, employers were already required to provide a wage range for the position sought to job applicants – but only upon request. They were (and still are) also banned from retaliating against applicants for making the request.
What does the new law say?
Specifically, it requires employers to be more proactive about pay transparency by including the following information in job listings:
- The wage range for the position
- A general description of included job benefits
- Any other compensation offered for the position.
Under the law, “wage range” is the minimum and maximum hourly rate or salary for the position, set in good faith.
The wage range is to be set with reference to:
- Any applicable pay scale
- Any previously determined minimum and maximum hourly rate or salary
- The minimum and maximum hourly rate or salary for someone holding a comparable position, or
- The amount that is budgeted for the job.
The state will develop a form that employers can complete to meet the law’s pay transparency requirements.
If there is no internal or public posting for the position, the employer must make the required disclosures before discussing compensation or otherwise upon request.
Law includes recordkeeping requirement
Importantly, employers must also keep a record showing compliance with the law. These records must be kept for at least three years after the job is filled. If the position is not filled, the records must be kept for at least three years after the job was posted.
Initial violations will generate a letter to the employer compelling compliance with the law. A second violation will result in a civil penalty of up to $300 for each affected applicant or employee. That amount doubles for subsequent violations within three years of any previous one.
New Washington, D.C. pay transparency law
In early March, Washington, D.C. passed a new law that amended a previously existing and much narrower law relating to wage transparency.
An earlier applicable law called the Wage Transparency Act of 2014 says Washington, D.C. employers may not require employees to “refrain from inquiring about, disclosing, comparing, or otherwise discussing” their own wages or the wages of another employee.
That law also prohibits retaliation against any employee who does so.
Under that law, employers generally may bar employees who have regular access to wage information – like HR employees – from sharing that information.
The law does not require employers or employees to disclose an employee’s wages in response to an inquiry from another employee.
Fines range from $1,000 for a first violation to $5,000 for a second violation to $20,000 for each subsequent violation.
Minimums and maximums
Under Washington, D.C.’s new law addressing pay transparency, employers must provide the minimum and maximum projected hourly pay or salary in all job listings and position descriptions advertised.
Before the first interview, they must also disclose the existence of any healthcare benefits that employees would receive if they accept the position.
The law gives the Attorney General the power to investigate potential violations and bring court actions for enforcement.
The new law also bans employers from screening potential employees based on their wage history. They must also post a workplace notice about employee rights under the law.
Wage transparency laws are clearly trending upward. For a deeper dive into pay transparency laws, here is a more complete guide to pay transparency legislation.
Free Training & Resources
Resources
The Cost of Noncompliance
The Cost of Noncompliance