How In-House Lawyers Can Help Navigate Pay Disclosure Laws

Well, it’s been a while sports fans. Today’s installment is “How Can in-house counsel can navigate pay disclosure laws?” Pay disclosure laws have been dominating the legal news in recent months.

On November 1, 2022, one of the most wide-ranging laws related to salary transparency went into effect in New York City. Businesses hiring workers in the city are required to list the minimum and maximum salary range for a job on any printed or online posting.

The goal of this New York City law is to provide workers with more information regarding an employer’s pay practices so they have greater leverage to discuss and negotiate their salaries.

The broader objective is to help close the wage gap, wherein women in the United States are paid 83 cents for every dollar paid to white, non-Hispanic men, and women of color are paid as little as 49 cents for every dollar, according to a March 2022 fact sheet from the National Partnership for Women & Families.

While pay transparency laws aimed at closing pay gaps are rapidly emerging around the country, the result is a patchwork of laws that make it challenging for organizations to remain compliant.

California enacted the first sweeping state law governing pay equity back in 2015, and in 2021 became the first state to require companies with 100 or more employees to report wage data by race and gender across 11 pay bands.California also requires employers to include compensation and benefits information in job postings effective January 1, 2023.

Colorado’s Equal Pay for Equal Work Act, which went into effect at the beginning of 2021, requires employers to post the compensation range and a general description of all employment benefits in their job postings, and generally prohibits employers from paying any employee a wage rate that is less than the rate paid to an employee of a different sex for substantially similar work.

Colorado, California, Connecticut, Maryland, Nevada, New York (effective Sept. 17, 2023), Rhode Island, and Washington also have laws on pay disclosure in job postings, and several counties and cities across the country have pay disclosure laws on the books as well.

Moreover, multiple states have enacted laws barring employers from preventing employees from sharing their salary information or from retaliating against them if they discuss their pay package with co-workers. Several states and local jurisdictions have also adopted laws and regulations that prohibit employers from requesting salary information or from retaliating against them if they discuss their pay package with co-workers. Several states and local jurisdictions have also adopted laws and regulations that prohibit employers from requesting salary information from job applicants.

Navigating pay disclosure laws can be a complex and sensitive issue for in-house counsel. Here are some general tips that may help:

  1. Understand the applicable laws: There are a variety of laws related to pay disclosure, such as the federal Equal Pay Act and state laws that may be more stringent than federal law. It’s important to familiarize yourself with the relevant laws to ensure compliance.
  2. Ensure consistent pay practices: In-house counsel should work with their organization’s HR team to ensure that pay practices are consistent and nondiscriminatory. This includes creating and maintaining clear job descriptions, pay ranges, and evaluation criteria.
  3. Consider conducting regular pay audits: Conducting regular pay audits can help identify any pay disparities and ensure that the organization follows applicable laws. In-house counsel may want to work with an outside consultant or auditor to conduct these audits.
  4. Develop policies for responding to pay inquiries: In-house counsel may want to work with HR to develop policies and procedures for responding to pay inquiries, such as those made by employees or job applicants. These policies should be consistent with applicable laws and ensure that the organization is not disclosing any confidential information.
  5. Provide training: Providing training to managers and employees on the organization’s pay practices and the applicable laws can help ensure that everyone is on the same page and can help prevent unintentional violations of pay disclosure laws.
  6. Stay up to date on changes in the law: In-house counsel should regularly review any updates or changes to pay disclosure laws to ensure that the organization remains in compliance. This may involve working with outside counsel or industry groups to stay informed.

In summary, navigating pay disclosure laws requires a combination of legal knowledge, HR expertise, and clear policies and procedures. In-house counsel can play a key role in ensuring that their organization remains in compliance with applicable laws and is treating all employees fairly and equitably.

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