Eileen Hannigan contributed to this post
Last month, the Washington State Legislature passed a bill updating the state’s equal pay laws for the first time since 1943. The Equal Pay Opportunity Act goes into effect June 7, 2018.
The aim of the bill is to reduce gender disparity in compensation by requiring verifiable data to explain any gaps in pay between employees holding similar jobs. It also gives employees the right to discuss wages with their coworkers without retaliation from their employer.
Here’s what human resources professionals in Washington need to know about this new law:
The bill defines compensation as discretionary and nondiscretionary wages as well as benefits. So it’s looking at the bigger picture, not just a gap in wages.
It prohibits compensation discrimination based on gender, and the employee-to-employee comparisons go beyond job titles. When establishing compensation, the HR team must compare to other employees who are “similarly employed.” Employees are considered “similarly employed” when the jobs require similar skills, effort, and responsibilities, and when the jobs have similar working conditions. That means job titles are not the only way compensation fairness is to be determined.
It prohibits employers from limiting career advancement opportunities because of an employee’s gender.
It allows employees to talk about their own wages and inquire about their coworkers’. Under this law, employers cannot prohibit employees from discussing their own wages. Employees cannot be discharged or otherwise retaliated against for talking about wages with other employees or for asking their supervisors for reasons for their current wages or lack of advancement opportunities. It’s important to note that employers may still prohibit employees whose job function requires knowing other employees’ compensation information (i.e. human resources staff) from disclosing anyone’s information but their own.
When there are compensation disparities between folks who are similarly employed, employers must be able to provide bona fide job-related reasons for those disparities. Allowable reasons include:
- Difference in education, training, or experience
- Employee seniority
- Employee merit
- Quantity or quality of production
- Regional differences in compensation
- Local ordinances that provide a minimum wage that is different from the state’s minimum wage
Note that an employee’s wage history is not a valid reason for compensation disparity under this law.
This post is intended as educational information only and is not a substitute for legal advice or consulting. Xenium HR is a human resources consulting and payroll processing company working with small and mid-sized businesses in Portland, Oregon. For more information, contact Xenium HR at 503-612-1555 or live chat with us by clicking the icon on the bottom right corner of the screen.