How Pay Transparency Laws Apply to Remote Employers
Recent years have seen an immense rise in remote work, especially during the pandemic. With this trend comes new questions for employers about how certain laws, such as those regarding employee pay transparency, will apply to their businesses.
This blog post will explore the relevant regulations and provide tips on best practices for employers managing a virtual workforce.
Pay Transparency Legislation Has Been in Effect in Colorado Since January 1, 2021
While a few pay transparency laws were already on the books, Colorado became the first state to require employers to disclose pay ranges in job postings. Since January 2021, all employers under this law are required to disclose a good faith estimate of the maximum and minimum compensation (at either an hourly or salary rate) and a general description of the benefits and other compensation available.
A New Pay Transparency Law Took Effect in New York City on November 1, 2022
A new pay transparency legislation that went into effect on November 1, 2022, amended the New York City Human Rights Law to require employers with at least four employees to disclose good faith wage ranges, including maximum and minimum pay rates, in any job postings for positions that can or will be performed in New York City. However, temporary positions with staffing agencies are exempted from this requirement.
Updated Pay Transparency Legislation Went into Effect in California, Washington State, and Rhode Island on January 1, 2023
The California, Washington, and Rhode Island legislatures all passed new pay transparency laws that went into effect on January 1, 2023.
California amended its Labor Code to require employers with at least 15 employees to include pay scales in all job postings. Similarly, Washington’s Equal Pay and Opportunities Act also dictates that employers with 15 or more employees disclose a wage scale or salary range in every job posting.
Rhode Island’s Pay Equity Act does not require employers to include salary ranges in job postings. Instead, it states that employers must provide a wage range to applicants for each position upon request and also provide a position’s wage range at the time of hire.
This law is similar to existing laws in Connecticut, Maryland, and Nevada that require employers to provide salary range information to job applicants at specific points in the hiring process but do not mandate that these details be included in job postings.
Upcoming and Pending Pay Transparency Laws
Shortly after New York City’s amended pay transparency laws went into effect, New York state added its own legislation to the mix. Starting on September 17, 2023, employers will be required to disclose good faith pay ranges for all opportunities that can or will be performed in New York state.
Additional pay transparency legislation is currently pending in Massachusetts and South Carolina, and more states are likely to follow suit in the coming years.
Ensuring Your Business Remains Compliant
It’s also important to keep in mind that pay transparency laws can be enacted on the local level. For instance, in Ohio, both Cincinnati and Toledo require employers with at least 15 employees to provide salary information under certain circumstances.
With a rising number of states and localities adopting pay transparency legislation, it is critical that employers understand the impact of these laws and comply with their requirements. This is not only true for employers that are located in the states that have passed transparency laws but also for out-of-state employers who are posting remote job openings that could potentially be performed in one of these states.
Before you publish a job posting for a nationwide remote position, be sure to consult with a trusted business lawyer. There can be significant consequences for violating pay transparency laws, even if you do so unintentionally.