Posted 5 months ago - by Priscila Solis

Important Things to Know About Pay Disclosure Laws

States across the country are starting to see more and more mandates that call for pay disclosure on open positions. This can possibly affect employees’ perceptions of the company or position without even applying. It is important that employers are aware of these mandates and what they could mean for their hiring practices going forward.

Pay Disclosure State Mandates

New York

Effective November 1, 2022, New York will require employers to include a pay range for all posted jobs. Originally, the mandate was set to take effect in mid-May of 2022 but received some pushback that led to the delayed date of November. Additionally, other states have stepped up and issued their own similar mandates.

Colorado

Colorado passed the Equal Pay for Equal Work Act in July of 2021. It requires employers to include pay and benefits disclosures on job postings for both in-person and remote roles. Additionally, it requires a written notice to Colorado employees before it decides to hire, change job title, or change the job responsibilities, or authority of any employee.

Washington

Washington state will mandate employers to include a wage scale or salary range along with benefits information in all job listings. This will take effect in 2023.

California

California introduced bill SB 1162 in February of 2022. Currently, California requires employers to provide applicants with the pay scale for a job they are applying for upon reasonable request. If SB 1162 passes, it would require pay scales to be included in each job posting. Similarly, it mirrors the Colorado rule by also requiring a notice to employees, to make known any opportunity for promotion to all current employees. California, however, also requires the pay scale to be listed on those internal notices.

Moreover, SB 1162 proposes additional changes to California’s Pay Data Reporting law that passed in September of 2020. It plans to expand the pay data obligation to include employees hired through a third party that supplies workers to perform labor such as a staffing agency.

SB 1162 also plans to include the following for the Pay Data Reporting law:

• Impose a monetary penalty on businesses that do not file the report the first time at more than $100 per employee. And subsequently, a penalty that does not exceed $200 per employee for any failure to submit after that.
• Require the state to publish private employer’s pay data report on an online database available to the public. (The database will not contain any individually identifiable information).
• Require employers to disclose median and average hourly rates within each job category, race, ethnicity, and sex.
• Push the due date of the Pay Data Reports to the second Wednesday of May in 2023.

Although some states are still discussing the possibility of pay disclosure mandates, some are already in place. Therefore, employers must ensure that they have the tools necessary to make fair and competitive offers.

We always recommend that employers speak with a trusted expert or partner to ensure they are in compliance with federal and local requirements.

How can we help?

Is there anything Payroll Systems can help you with as you accommodate rapid legislation changes?  Looking for robust payroll and HR reporting tools for your organization?  Reach out and talk to us about the easy-to-scale solutions you need for your business.

This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.