State Legislative Trends: Pay Transparency, Paid Leave

Employment Law

What’s new in state employment law? Pay transparency legislation continues to spread across the country, while Illinois joined a new state trend by enacting a paid leave law.

Add Hawaii and Washington, D.C. to the growing list of jurisdictions with pay transparency legislation, joining California, Colorado, Connecticut, Illinois, Maryland, Nevada, New York City, Rhode Island and Washington.

The new Hawaiian statute requires employers with more than 50 workers (including those located out of state) to include pay information in external job postings and advertisements, with a mandate to disclose “an hourly rate or salary range that reasonably reflects the actual expected compensation.”

Hourly or salary information for internal promotions or transfers does not fall under the statutory requirements of Senate Bill 1057; postings for public employee positions where compensation is set by collective bargaining agreements are also exempt.

The law took effect on January 1.

Washington, D.C. went a step further with its transparency requirements, with no exceptions for the number of employees and the law applying to internal postings.

As of June 30, 2024, employers must disclose “the minimum and maximum projected salary or hourly pay in all job listings and position descriptions advertised,” pursuant to the Pay Scale and Benefits Disclosure Amendment Act of 2023. The pay range disclosed should be “the lowest to the highest salary or hourly pay that the employer in good faith believes at the time of posting it would pay” for the job.

In addition, the new law added protection from retaliation for employees who discuss “compensation,” defined to include “all forms of monetary and nonmonetary benefits an employer provides or promises to provide an employee in exchange for the employee’s services,” and prohibits employers from inquiring into a job applicant’s wage history.

Employers are now prohibited from asking questions related to previous salary or hourly wage rate during the interview process, requiring that wage history satisfy the minimum or maximum salary or hourly range for the open position, asking a prior employer for information related to the applicant’s prior salary or hourly wage rate, or requesting that the applicant disclose such information.

The law does not provide for a private right of action but does include penalties for employers beginning with $1,000 for the first violation, $5,000 for the second and up to $20,000 for violations after that.

Illinois jumped on a new bandwagon with Maine and Nevada with its Paid Leave for All Workers Act, which requires that employers in the state provide employees with paid leave that can be used for any reason.

The new law, which took effect January 1, allows workers to earn and use up to a minimum of 40 hours of paid leave per any 12-month period. Employees in the state accrue one hour of paid leave for every 40 hours worked, beginning on Jan. 1 or the start of employment, and can begin using their time off after 90 days of employment.

Unused, accrued leave can be carried over into the following year, but employers are only required to provide 40 hours of leave in a given year. No documentation is required for leave.

Why it matters

Employers in Hawaii, Washington, D.C. and Illinois should check their policies for compliance with the new laws, while others should keep an eye out for similar legislation in their jurisdictions, as pay transparency and paid leave continue to trend.



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