Washington, D.C.: Another Player in the Pay Transparency Trend
As we reported in early 2023, several states have passed pay transparency laws that require certain disclosures in job postings (both internally and externally). That trend has continued, with states like Illinois joining the movement later in 2023. The requirements vary by state, but there continues to be a movement towards jurisdictions passing laws that implement pay disclosure requirements.
Once again, employers should understand jurisdictional requirements, even for states or localities where a company’s job postings could reach. Some pay transparency laws apply to postings that could be viewed by individuals in a specific jurisdiction, looking past the employer’s intent to reach said jurisdiction when posting.
First Things First: Pay Audit
Before we get to the latest development in this area, note that we continue to advise and emphasize the importance of an internal pay audit. Pay audits are a key first step in complying with pay transparency laws. An internal audit allows an employer to understand potential pay discrepancies and pay structures generally. An internal audit also provides an opportunity to correct any disparities, should they exist.
D.C.’s New Law
Most recently, Washington, D.C., joined the pay transparency movement. The D.C. law was signed on January 12, 2024, and allows for a 30-day congressional waiting period before final passage. As it stands, the law’s application begins on June 30, 2024.
Who Is Covered?
The new law applies to all private employers with at least one employee in D.C. Though the law does not address whether this encompasses employees who sometimes work in D.C. (either remotely or otherwise), employers (especially those with remote workers) should remain cognizant of where their workforce is located and whether their workforce has a D.C. presence.
What Are the Key Provisions?
1. Ban on Wage History Inquiry
- An employer cannot screen prospective employees based on their previous pay or wage history.
- The law also prohibits seeking the wage history of a prospective employee from a person who previously employed that individual.
- Wage history is broadly defined to include any information related to compensation received from previous employment. Compensation is further defined to include all forms of monetary and nonmonetary benefits.
2. Disclosures Required
- An employer must disclose the minimum and maximum projected salary or hourly pay “in all job listings and position descriptions advertised.” The law does not define “job listings” or “position descriptions advertised.” Therefore, employers should presume it is meant to encompass both internal and external postings or advertisements. As with other pay transparency laws, this requirement likely also includes any postings or advertised positions posted by recruiters or third parties engaged by the employer.
- An employer must disclose existing healthcare benefits a prospective employee may receive and must do so before the first interview. The legislative history states that a disclosure that healthcare benefits exist suffices.
3. Notice
- A covered employer must post a notice relaying the pay transparency requirements and employees’ rights under the new law.
4. Private Right of Action for Attorney General Only / Penalties
- The law does not create a private right of action for individuals but authorizes the Attorney General (AG) to take certain action. The AG may bring a civil lawsuit for injunctive, compensatory, or other authorized relief for any violations. The law also provides that the AG may investigate potential violations, including the issuing of subpoenas and compelling witness attendance, depositions, and document production.
- The law provides that any person served with a subpoena under the law shall have the opportunity to quash or modify said subpoena, and said protective actions may be heard by the Superior Court of the District of Columbia.
- If an AG prevails, the AG is entitled to reasonable attorneys’ fees and statutory penalties.
What Steps Should Covered Employers Take?
The law will not go into effect until June 30, 2024. However, we recommend taking these steps beforehand to ensure timely compliance.
- Post Notice – Employers should prepare a notice and determine where such notice shall be posted, including means of providing notice to remote workers.
- Implementation of New Disclosures / Internal Training – Employers should decide how to implement disclosure requirements in job postings and advertisements, including how the pay information will be gathered prior to posting or advertising an open position. Employers should also prepare their HR or other respective hiring team to include the disclosure of healthcare benefits prior to the first interview. A training for HR or hiring managers may also be helpful to ensure compliance with the ban on wage history inquiries.
Employers should also consider discussing the new requirements with any third party vendors who provide job posting services and ensure changes are made, should they be necessary. This ensures all job postings and advertisements posted on behalf of the company are compliant with the new law.
