- Hawaii’s pay transparency law. The law, which takes effect Jan. 1, 2024, requires employers to disclose an hourly rate or salary range in job postings.
- A continued trend. Hawaii is the ninth state to pass a pay-transparency law, joining California, Colorado, Connecticut, Maryland, New York, Nevada, Rhode Island and Washington.
- A key difference in the Hawaii law. Unlike other states’ legislation, the new Hawaii law will not require employers to disclose pay information in job listings for positions that are internal transfers or promotions within the company.
- More urgency for a national plan. Organizations should work toward not only being in compliance with various state laws, but have a national strategy where the foundational elements of pay transparency are strong.
Hawaii just became the ninth state in the U.S. to enact a law that will require pay transparency in job postings.
Hawaii employers will be required to disclose an hourly rate or salary range in job listings that reasonably reflects the actual expected compensation for the role.
The law, which will become effective Jan. 1, 2024, does not define “hourly rate” or “salary range.”
So far, eight other states have salary transparency laws on the books: California, Colorado, Connecticut, Maryland, New York, Nevada, Rhode Island and Washington.
The Hawaii law will not require employers to disclose pay information in job listings for positions that are internal transfers or promotions within the company, according to an analysis by Seyfarth Shaw.
This is a departure from several other jurisdictions’ pay transparency laws, which require internal job postings to follow the same pay transparency requirements as external job postings.
The law explicitly excludes job listings for positions with employers that have fewer than 50 employees and for public employee positions for which salary, benefits or other compensation are determined pursuant to collective bargaining. The law does not specify whether the employee threshold of 50 refers to employees within Hawaii or to a company’s total employee count.
The newly signed bill will also amend Hawaii’s equal-pay law in that it will now prohibit pay discrimination based on any protected category under Hawaii law, not just sex.
As a result, employees may now bring claims of discrimination in pay based on race, sex including gender identity or expression, sexual orientation, age, religion, color, ancestry, disability, marital status, arrest and court record, reproductive health decision, or domestic or sexual violence victim status.
The law’s “equal work” standard has also been updated to a “substantially similar work” standard such that employees may now be compared if they are performing “substantially similar work.”
California and New York have also adopted this “substantially similar work” standard.
Continuing a Trend
Last year, organizations watched as “wave after wave” of pay-transparency laws passed throughout the U.S., said Christine Hendrickson, vice president of strategic initiatives at Syndio.
“This year, the pace has been slower, with Hawaii being the first jurisdiction to adopt a pay transparency law in the U.S.,” she said. “They are unlikely to be the last. There’s already a bill sitting on the governor’s desk in Illinois, and pending bills in Massachusetts and D.C. to name a few.”
Pay transparency is and will continue to be an ongoing effort, Hendrickson said.
“Once you start sharing information about salary ranges, pay equity, representation and pay gaps, then your employees, your board, and your investors will continue to expect it,” she said. “The good news is that we’re still in the early stages of pay transparency, so starting to build a plan now will set you up for success moving forward.”
Riding the Wave
Regardless of the states in which they do business, organizations need to come up with a national plan if they haven’t yet, said Tauseef Rahman, partner and career business leader at Mercer. “It is imperative to go beyond just meeting the legislative requirements, and make sure the foundational elements of pay transparency are strong.”
To do so, employers should partner with key stakeholders to develop a comprehensive strategy with regard to pay transparency practices, said Annette Tyman, a partner at Seyfarth Shaw.
“For instance, employers with a national footprint should consider whether they will implement a jurisdiction-by-jurisdiction approach,” she said, “or if they will adopt an approach that covers employers across the country, including in those jurisdictions where there is no legal requirement to disclose salary ranges.”
Some employers have opted to do so because of the practical implications involved with location-based pay transparency disclosures, particularly those employers that have large remote workforces.
Employers should also be prepared to respond to questions from current employees regarding their specific salary within a posted salary range, Tyman said, as it is a practical implication that can come up when employers begin widely sharing compensation ranges.
It is also important to have a good framework in place, she added, “to help managers and recruiters determine the factors that support whether compensation for any particular candidate should be on the low end or the high end of the range.”
Editor’s Note: Additional Content
For more information and resources related to this article see the pages below, which offer quick access to all WorldatWork content on these topics: