On September 27, 2022, California Governor Gavin Newsom signed Senate Bill (SB) 1162, which requires certain employers to provide more pay transparency on pay scales and expands pay data reporting obligations for other employers. The new obligations take effect on January 1, 2023. Previously, under California law, employers had to provide an applicant with the pay scale for a position upon reasonable request. But beginning January 1, 2023, California employers with 15 or more employees must include in any job posting the pay scale for a position. Read more.

Westchester County’s salary transparency law, amending the local Human Rights Law, is set to take effect November 6, 2022. The County law will require employers (with at least four employees), employment agencies, and labor organizations to include a minimum or maximum salary for a job, promotion, or transfer opportunity in the job posting or advertisement.

The job posting covers any type of communication that is written or printed, whether electronic or hard copy, relating to a particular position for which an employer or employment agency is recruiting and accepting applications. The salary posting requirement will not apply to general “Help Wanted” solicitations not specifying a position that are affixed to an employer’s worksite or place of employment.

Recognizing the possibility of remote work and clarity relating to geographic scope, the law specifically applies to positions that are required to be performed, in whole or in part, in Westchester County, whether in person, in the field, or remotely.

Westchester County’s ordinance is much like the New York City Wage Transparency Law (eff. November 1, 2022), particularly relating to the definition of range of compensation as “the lowest to highest salary the employer in good faith belief at the time of the posting it would pay” for the position.

The law includes specific statutory “preemption” language if New York State enacts a similar law with the same or substantially similar language. Further guidance from the County would be needed if New York adopts similar legislation.

What does this mean? Pay transparency is coming to Westchester County and surrounding areas sooner than one may anticipate, so take steps now to get ready. Promoting salary disclosure already is becoming part of management’s and C-suite’s conversation in so many ways as companies look to build a culture of trust and transparency, as well as promote DEI initiatives.

With the number of pay transparency laws on the rise, now is the time to prepare. Some vendors are beginning to routinely include salary ranges on job site postings to prepare for the patchwork of new laws. Other organizations have voluntarily chosen to make pay transparency part of their culture and have voluntarily disclosed salaries for positions posted on their job board.

Stay tuned as we continue to monitor these new developments, including new laws that are being passed. Please ask your Jackson Lewis attorney if you have any questions or need legal advice in this area.

A bill to increase pay transparency in California steps closer to becoming law.

Senate Bill 1162, introduced in February and with some amendments since its initial form, passed the Assembly Appropriations Committee on August 11. Only a few steps are left before it could become law this legislative session: (1) a full Assembly vote; (2) reconciliation with the Senate; and (3) the governor’s signature.

SB 1162 continues to focus on enhanced pay transparency. In its current form, the bill requires employers with at least 15 employees to include the position’s pay scale in any job posting, including those posted through a third party. This reflects larger pay transparency trends nationally, including the requirements in Colorado, New York City, and Washington. The California bill also requires employers to provide the pay scale for a position to applicants and employees upon request.

The bill no longer requires employers to provide employees notice of job opportunities before they are filled. This requirement has required significant process changes for employers in Colorado.

The bill also expands the pay data reporting obligations for California employers. Currently, California employers must submit to the Department of Fair Employment and Housing (now, the Civil Rights Department) a pay data report tabulating (A) the number of employees within each establishment (B) by race, ethnicity, and sex within each (C) job category (for example, Professionals, Technicians, Laborers, and Service Workers) (D) who earned within each of 12 specific pay band during the prior year.

If the current version bill passes, employers also will have to:

  1. Report the median and mean hourly rate for each combination of race, ethnicity, and sex for each job category; and
  2. Submit a separate pay data report for employees hired through labor contractors (i.e., covering temporary staffing agencies) that also discloses the “ownership names of all labor contractors used to supply employees.”

An employer that fails to submit these required reports could be subject to penalties of $100 per employee (or $200 per person for repeat failures).

In short, this bill (if passed) will force employers to face any pay gaps and diversity gaps in their workforces. While pay gaps may be addressed with pay adjustments and strong, fair compensation systems, gaps in diversity can require long-term planning with a concerted external and internal DEI strategy. Identifying and understanding these gaps — and their causes — may also help avoid situations in which discriminatory bias or other unlawful actions can create legal risk.

If you have any questions about SB 1162 or how to evaluate pay, diversity, or opportunity gaps in your organization, please contact a Jackson Lewis attorney.

As the 2022 NILG National Conference was coming to a close, the EEOC released the long-awaited National Academy of Sciences report on the EEOC’s Pay Data Collection Completed in 2020. The study, titled Evaluation of Compensation Data Collected Through the EEO-1 Form, is a dense read at over 275 pages. The report found however, that the process of collection, as well as the actual data to be collected had flaws. The report also recommends the EEOC embark in a trial to field test the process if it decides to roll out a nationwide data collection tool. Read more.

Illinois Governor J.B. Pritzker has signed into law an amendment to the Illinois Equal Pay Act (IEPA) requiring companies with 100 or more employees in Illinois to obtain an equal pay registration certificate from the Illinois Department of Labor (IDOL).

Previously, only companies with more than 100 employees were required to complete the IEPA registration certification.  Read more.

The New York City Council has pushed back implementation of the salary transparency law from May 15, 2022, to November 1, 2022.

On January 15, 2022, New York City enacted legislation requiring all covered employers to include a minimum and maximum salary for the position advertised. The new law was set to go into effect on May 15, 2022. However, following the City Council’s passage of an amendment to the law, assuming the mayor signs it, the effective date will be November 1, 2022.  Read more.

Mississippi Governor, Tate Reeves, had three options. He could have vetoed the state’s pending pay equity bill. He did not.

He could have let it come into effect without action. He passed on this path too.

Instead, on April 20, Governor Reeves signed the bill into law. And now every state in the nation has a law prohibiting pay discrimination in some form.

Mississippi’s new law prohibits employers from paying “an employee a wage at a rate less than the rate at which an employee of the opposite sex in the same establishment is paid for equal work on a job, the performance of which requires equal skill, education, effort and responsibility, and which is performed under similar working conditions.”

Like similar laws from many jurisdictions (including at the federal level), Mississippi exempts pay differences “pursuant to differential based on:

(a) A seniority system;
(b) A merit system;
(c) A system which measures earnings by quantity or quality of production; or
(d) Any other factor other than sex.”

The law mirrors the requirements of the federal Equal Pay Act of 1964. But it differs most notably from the recent trend in pay equity laws by including the catchall “any other factor other than sex.” Most recent state and federal laws have limited this catchall.

Mississippi’s new law also differs from many other state (and perhaps federal) pay laws in that:

  1. It is solely focused on gender, without reference to race-based pay differences;
  2. It expressly permits an employer to rely on (a) an employee’s salary history, (b) the continuity of an employee’s employment, (c) market competition for an employee’s services, (d) employee attempts to negotiate wages, and similar explanations, as “any other factor other than sex;”
  3. It does not prohibit employers from inquiring about salary history; and
  4. It does not require pay transparency for applicants or employees.

This new law goes into effect July 1, 2022.

Mississippi is the only state in the country without an equal pay law. That may change soon.

On March 30, 2022, the Mississippi House and Senate both passed HB 770. The bill (1) requires employers to pay employees without regard to sex and (2) encourages equal pay for equal work. The bill sits with the state’s governor for signature or veto by April 23. If the governor does not act, HB 770 will become Mississippi law.

Mississippi’s HB 770 largely mirrors the federal Equal Pay Act. It prohibits employers from paying employees in the same establishment, but of opposite sexes, different wage rates if they are performing “equal work on a job, the performance of which requires equal skill, education, effort and responsibility, and which is performed under similar working conditions,” unless the pay difference is “based on” (a) a seniority system, (b) a merit system, (c) a system that measures earnings by quantity or quality of production, (d) or any factor other than sex—just like under the federal Equal Pay Act.

Unlike the trend in many states that limit the reasons for permissible pay differences (like California, Colorado, Illinois, Massachusetts, New Jersey, and Washington), HB 770 makes clear that its “any factor other than sex” defense includes factors such as:

  1. The salary history demonstrated by the employee as compared to employees of the opposite sex in the same establishment;
  2. The continuity of employment history demonstrated by the employee as compared to employees of the opposite sex in the same establishment;
  3. The extent to which there was competition with other employers for the employee’s services as compared to employees of the opposite sex in the same establishment; and
  4. The extent to which the employee attempted to negotiate for higher wages as compared to employees of the opposite sex in the same establishment.

This bill runs counter to recent trends for other reasons, too:

  • Court have looked skeptically at the “any factor other than sex” defense into issues such as the use of salary history (or other business-related defenses that disproportionately tend impact pay for women). This law would endorse them.
  • Most recent state and local laws have prohibited requesting or relying on salary history. This law would codify the practice.
  • Most recent state (and city) pay equity requirements and proposals include pay transparency requirements, such as wage range disclosures to applicants or employees. This law would be silent on the issue.

Unless the governor vetoes HB 770, the law will take effect July 1, 2022.