Pay Equity in Washington: Pay Transparency Comes to The Evergreen State
On January 1, 2023, Washington joined the growing list of states requiring pay transparency in job postings. Amendments (the “Amendments”) to the Washington State Equal Pay and Opportunities Act (the “EPOA”) require covered employers to disclose pay range, benefits, and other compensation in job postings. The Washington Department of Labor and Industries issued an administrative policy (the “Guidance”) to provide guidance regarding the broadened disclosure requirements.
Previously, the EPOA addressed pay equity in four ways: (1) prohibiting employers from paying “similarly employed” employees differently based on gender or making decisions on career advancement opportunities based on gender; (2) prohibiting employers from limiting employees’ rights to discuss their wages; (3) restricting employers from asking about an applicant’s previous or current wages and salary; and (4) requiring employers with 15 or more employees, upon request, to provide applicants with the minimum wage or salary for the position for which the applicant is applying (including internal job transfers).
The Amendments add a fifth prong: pay transparency obligations in job postings.
What’s New in the EPOA’s Recent Amendments
Wage Scale and Salary Range Disclosures in Job Postings
The Amendments require employers that engage in any business, industry, profession, or activity in Washington and have 15 or more employees anywhere, with at least one employee in Washington (“Covered Employers”), to disclose in job postings wage scale or salary range information, as well as benefits and other compensation information.
The Amendments define a “posting” as any solicitation (by the employer or through a third party) intended to recruit job applicants for a specific available position. The Guidance elaborates that a “posting” includes information regarding applicant qualifications, such as specific knowledge, skills, or abilities requested of the applicant for suitability of a position, and provides examples of what does and does not constitute a “posting,” including the following:
A window sign that reads, “Help Wanted,” does not qualify as a “posting” because it does not include qualifications or reference a specific position for a desired applicant.
A website banner that reads, “Hiring Now – All Jobs. Food Handler’s permit required,” does not qualify as a posting, because it does not reference a specific position for a desired applicant.
An electronic reader board outside of a business that reads, “Help Wanted – Server, Food Handler’s Certification Needed” qualifies as a posting.
A social media post that reads, “Seeking applicants for a Billing Specialist position. Must have 2 years of medical bill processing experience,” qualifies as a posting.
According to the Guidance, businesses without a physical presence in Washington may still be Covered Employers if they “engage in business in Washington or recruit for jobs that could be filled by a Washington-based employee” (i.e., remote jobs performed in Washington). Covered Employers may not avoid their disclosure obligations by stating that they will not accept Washington applicants (a similar provision was adopted in Colorado). Job postings for positions located entirely outside of Washington are generally not covered, even if the advertisement may reach a Washington-based individual.
The Guidance states that the wage scale and salary range information should specify the Covered Employer’s most reasonable and genuinely expected range giving the lowest to the highest pay, without ambiguous or open-ended phrases (such as “$60,000 per year and up,” or “up to $29.00 per hour”). Employers must update the posting if the pay range changes.
Finally, the Guidance clarifies that if an applicant is offered a different position than that for which they applied, the employer may offer the applicant the wage scale or salary range for the position offered.
Description of All Benefits and Other Compensation in Job Postings
In addition to pay range information, the Amendments require that job postings include a general description of “all benefits” and “other compensation” offered (collectively, “Benefit and Other Compensation Disclosure”).
The Guidance broadly defines “all benefits” to include “health care benefits, retirement benefits, any benefits permitting paid days off (including more generous paid sick leave accruals, parental leave, paid time off or vacation benefits), and any other benefits that must be reported for federal tax purposes, such as fringe benefits.” Accordingly:
For health care benefits, the posting must list all types of insurance offered, such as medical, dental, vision, life, and/or disability insurance;
For retirement benefits, the posting must include what options are available, such as a 401(k) plan, deferred compensation, or other defined-contribution plans; and
For paid time off benefits, the posting must include the number of days or hours the applicant should expect to receive for all types of paid time off, including vacation, holiday, and, if more generous than what is required under state or local law, sick time.
The Guidance includes an example of model language showing how an employer might comply with its benefit disclosure obligations:
Employees (and their families) are covered by medical, dental, vision, and basic life insurance. Employees are able to enroll in our company’s 401k plan, as well as a deferred compensation plan. Employees will also receive eight hours of vacation leave every month and twelve paid holidays throughout the calendar year.
The Guidance also provides a non-exhaustive list of the types of “other compensation” that must be disclosed in job postings. This list includes bonuses, commissions, profit-sharing, stock options, and “other forms of compensation that would be offered to the hired applicant in addition to their established salary range and wage scale.” Included in the Guidance is the following example of how an employer might comply with its other compensation disclosure obligations:
Hired applicant will be able to purchase company stock, receive annual bonuses, and can participate in profit-sharing.
The Guidance notes that job postings for commission-based roles should include the rate or rate range (percentage or otherwise) that the Covered Employer would offer to the hired applicant.
Covered Employers that use electronic postings may satisfy their Benefit and Other Compensation Disclosure obligations by including a hyperlink to a general description of benefits and other compensation in the posting, rather than listing all the information in the posting itself. Note, however, that hyperlinks to postings are not permissible under the new California pay transparency law; so multi-state employers should be mindful of the state-by-state distinctions.
What Employers Should Do Now
Washington employers (including multi-state employers) should become familiar with the EPOA’s obligations and take steps to ensure their managers, human resources professionals, and others involved in the job posting/hiring process understand the new requirements for posting job openings. Employers should also review, and if necessary, revise their job postings and templates.