A Pay Transparency Law That Went Array - American Society of Employers - Anthony Kaylin

A Pay Transparency Law That Went Array

The State of Washington has been a leader in pay transparency law.  The Equal Pay and Opportunities Act prohibits gender pay discrimination by addressing business practices that contribute to income disparities between genders.  Further, all pay ranges and benefits for a job advertisement must be in the posting.   Specifically, a “posting” is defined as any solicitation, including recruitment done directly by an employer or indirectly through a third party, intended to recruit job applicants that includes all of the following:  electronic or printed hard copy, qualifications for desired applicants, and specific available position.

The pay range should be clear without open-ended phrases such as “$60,000/per year and up” (with no top of the range), or “up to $29.00/hour” (with no bottom of the scale). A “general description of all benefits” includes health care benefits, retirement benefits, any benefits permitting paid days off (including more generous paid sick leave accruals, parental leave, and paid time off or vacation benefits), and any other fringe benefits that must be reported for federal tax purposes.

So, what is the issue? Under the law, an applicant who applies for a position that does not have the required information may be entitled to a settlement:

RCW 49.58.110

Disclosure of wage or salary range by employer—When required—Remedies.

(1) The employer must disclose in each posting for each job opening the wage scale or salary range, and a general description of all of the benefits and other compensation to be offered to the hired applicant. For the purposes of this section, "posting" means any solicitation intended to recruit job applicants for a specific available position, including recruitment done directly by an employer or indirectly through a third party, and includes any postings done electronically, or with a printed hard copy, that includes qualifications for desired applicants.   . . .

(4) A job applicant or an employee is entitled to the remedies in RCW 49.58.060 and 49.58.070 for violations of this section. Recovery of any wages and interest must be calculated from the first date wages were owed to the employee.

In 2020 an amendment to the law effective January 1, 2023, allows job applicants or employees to sue individually.  Moreover, the law covers employers outside the state that post about "remote work that could be performed by a Washington-based employee."  For Michigan employers with employees working in the state of Washington, this law is troubling. 

There has been a number of class action lawsuits filed against Washington state employers for violation of the job posting requirements.  And since the law is new, no one knows how the courts will rule. 

"Washington's Legislature has been passing laws that impose penalties on employers who don't get it right," Katheryn Bradley, a Seattle-based shareholder at management-side firm Lane Powell PC said. "And that's why we're seeing the class action lawsuits and why I think it's attracting the attention that it is."

Management-side Seyfarth Shaw LLP partner Helen McFarland said the fact that suits were filed under the new statute wasn't a surprise, but the volume of cases was unexpected.  "I think we always knew that this was a possibility, that there would be these kinds of lawsuits that were brought. … But I don't think anyone was prepared for the number that filed in the last week or so," she said.

A lawsuit that was filed shows why employers should be worried.  In a lawsuit filed against Rite Aid, the plaintiffs claimed they "lost valuable time" applying for jobs that lacked a listed range.  In those listings, "the pay scale or salary range, and a general description of all of the benefits and other compensation to be offered was not disclosed to them," the suit said. "As a result of plaintiff's and class members' inability to evaluate the pay for the position, negotiate that pay, and compare that pay to other available positions in the marketplace, plaintiff and class members were harmed," the suit said.

So, the question is what are the damages?  What harm is there for someone who applied or wants to apply for the position who may not be considered at all that is actually compensable?  As McFarland points out, plaintiffs could potentially be "trolling through advertisements, looking for violations without regard to the type of position being advertised, and regardless of whether the plaintiff is actually interested in obtaining the job, or qualified to hold the job." 

Until the Washington state courts decides this issue, employers need to watch out. It will be important for employers with employees in or who could be from the state of Washington ensure that the job postings are correct to the letter of the law otherwise fly by night lawsuits could be a way of life.


Source: Law360 10/23/23

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