Are You Ready for Washington's Pay Transparency Law?
Alert: On November 30, 2022, the Department of Labor and Industries issued an updated L&I Administrative Policy ES.E.1 that supersedes the previous draft administrative policy discussed in this October 19, 2022 post. The two examples previously shared from the draft policy and the questions tentatively answered by the draft policy did not change under the updated policy.
On January 1, 2023, SB 5761 takes effect. The bill amends the Washington Equal Pay and Opportunity Act (Ch. 49.58 RCW) by requiring certain pay and benefit disclosures in job postings. The Washington Department of Labor and Industries (L&I) has published draft guidance on implementation of this law, so employers can begin to prepare for the requirements that take effect in less than three months.
SB 5761 requires employers to disclose wage scales or salary ranges and benefit information, in each and every “posting” for a job opening. Only employers with fifteen or more employees, and where at least one employee is Washington-based, are subject to the law. SB 5761 defines a “posting” as “any solicitation intended to recruit job applicants for a specific available position.” The law applies whether the posting is done directly by an employer or indirectly through a third party (such as a recruiter), and includes both hard copy and electronic postings. The pay and benefit information must be provided any time the job announcement “includes qualifications for desired applicants.” RCW 49.58.110. Where the specific position and job qualifications are not included in the solicitation, the pay and benefit disclosure obligations are not triggered.
L&I’s Draft Administrative Policy ES.E.1 offers a series of examples of what is—and is not—considered a job posting. Below are two examples. (A final version of the policy is expected to be published before the end of the year.)
Not a job posting: A website banner that reads “Hiring Now-All Jobs. Food Handler’s permit required.” Because no specific position is referenced, this is not a job posting.
A job posting: An electronic reader board outside of a business that reads, “Help Wanted- Server. Food Handler’s Certification Needed. Offering: $24.00-$26.00 per hour, medical benefits, 70 vacation hours per year, and $500 sign-on bonus.” Because a specific position and job qualifications are referenced, this is a job posting.
Questions Tentatively Answered by L&I Draft Administrative Policy ES.E.1:
- Does SB 5761 apply to remote work? Yes, where the remote work could be performed by a Washington-based employee, an employer cannot avoid the disclosure obligations by stating that it will not accept Washington applicants.
- Are there any exceptions to the disclosure obligations based on location? Yes, where a job worksite is physically located outside of Washington, e.g., a waitstaff position at a restaurant out-of-state, employers do not need to make the SB 5761 disclosures. Additionally, if a job posting is printed in hard copy and made entirely outside of Washington, SB 5761 disclosures are not required.
- What benefits information needs to be included in the disclosure? Health care benefits, retirement benefits, any benefits permitting paid days off (e.g., paid sick leave beyond what is required under state law, vacation benefits, etc.), and any benefits that would need to be reported for federal tax purposes.
- Are disclosures required for internal job postings? Yes, existing employees who apply to a posting are considered job applicants for the position for which they have applied.
- What happens if an employer ends up offering an applicant a different position than what the applicant applied for? The employer may offer the applicant the wage scale or salary range specific to the position ultimately offered.
Next Steps for Employers
Employers who want to be ready for the law’s January 1 effective date will take steps now to be prepared. In addition to the logistical and practical elements of adding necessary details into job postings, employees’ new access to information about company wage scales and pay ranges could expose companies to risk if there are pay disparities between people in identical or similar jobs. This new access could also lead to damaged morale if jobs are posted with different compensation from what current employees in those positions are paid. Employers may wish to plan to address these elements and risks accordingly:
- Update job posting templates to include wage scale/salary range and benefit information. Where the job title and corresponding wage scale/salary range of the job opening may vary depending on experience, the job posting should clearly define the pay for each experience level.
- Consider whether using electronic links to benefits information summaries would be an effective way of disclosing that information for job postings online. Keep in mind that if the link breaks due to webpage changes or other technical issues, the employer may be considered to be out of compliance with disclosure requirements.
- Contact third-party recruiters you work with to confirm their familiarity with the law and their preparedness to follow the new requirements for any postings that will be active in the new year.
- Document objective criteria (e.g., education level, experience level, etc.) for making offers of employment within a particular wage scale/salary range.
- Conduct internal pay equity audits.
- Keep an eye out for any changes to L&I’s Draft Administrative Policy.
Contact any member of the Stokes Lawrence employment group with questions or assistance with compliance with SB 5761.