Legal Resources

Are You Ready? Washington's Pay Transparency Law Becomes Effective January 1, 2023

The Washington Equal Pay and Opportunities Act (the “Equal Pay Act”) and its new wage disclosure requirements take effect on January 1, 2023. Under the Equal Pay Act, certain employers must disclose a wage scale or salary range along with a general description of benefits and other compensation on their job postings.

Which employers must comply?
The Equal Pay Act applies to employers engaging in any business, industry, profession, or activity in Washington with 15 or more employees. The 15-employee threshold includes those who are not based in Washington if the employer has one or more employees with a physical presence in Washington. By way of example, the requirements would apply to an employer with one employee based in Washington and fourteen working remotely.

What is a job posting under the Equal Pay Act?
A “posting” is defined as “any solicitation intended to recruit job applicants for a specific available position.” Postings done directly by an employer or through a third party, like a recruiter, are subject to the Equal Pay Act.

When does the Equal Pay Act apply?
In addition to job postings, if requested, employers must provide an employee who is offered an internal transfer or promotion with the wage scale or salary range of their new position.

What information must be disclosed on a job posting?
Under the Equal Pay Act, Washington job postings must include the wage scale or salary range; a general description of all benefits; and a general description of other compensation. Importantly, employers may use links to lead an applicant to more detail regarding the required job posting information.

Wage Scale or Salary Range
A wage scale or salary range should provide the applicant with the employer’s most reasonable and genuinely expected range of compensation for the job. The wage scale or salary range should extend from the lowest to the highest pay established prior to publishing the job posting, with required updates if that range changes.

General Description of All Benefits
All benefits” includes, but is not limited to, health care benefits, retirement benefits, and any benefits permitting paid days off. The Washington Department of Labor and Industries provides this example of an acceptable general description of all benefits: “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.”

General Description of Other Compensation             
“Other compensation” includes, but is not limited to, bonuses, commissions, profit-sharing, and stock options. The Washington Department of Labor and Industries provides this example of an acceptable description of other compensation: “Hired applicant will be able to purchase company stock, receive annual bonuses, and can participate in profit-sharing.”

What should employers do in preparation?
Employers should take proactive steps to be prepared for the Equal Pay Act’s January 1 effective date. Penalties for failure to comply can be significant. Remedies may include actual damages, statutory damages (or $5,000, whichever is greater), and interest of one percent per month on all compensation owed. Civil penalties may also be levied and range from up to $500 for the first violation to $1,000 or 10% of the damages for repeat violations. Some steps employers might consider taking include the following:

  • Verifying all job postings are compliant with the Equal Pay Act.
  • Maintaining updated electronic links to streamline job postings.
  • Reaching out to recruiters and other third parties to make sure they are familiar with the Equal Pay Act and are complying with it in any postings they make on the employer’s behalf.
  • Conducting pay equity audits and making adjustments where necessary to avoid damaging morale.

For more information regarding the new law, or for assistance in reviewing and revising your job postings, please feel free to contact members of our employment law group, including Eric Lansverk, Mustafa Hassoun, Robert Van Cleve, and Matt Weger.