In a significant move for the business community, the Washington state Legislature has nearly unanimously approved an amendment to the current pay transparency law, which has previously led to a surge of class-action lawsuits against employers.
Though many businesses are still facing the prospect of millions of dollars in liabilities due to ongoing lawsuits, the newly passed amendment offers a temporary reprieve.
Employers will now have a limited five-day correction window to address any job postings that fail to include the mandatory pay range and benefits information mandated by law.
Once it receives the governor’s signature, the amendment is expected to take effect in summer 2025.
This amendment marks an evolution of Washington’s pay transparency measures, which have been included in the state’s Equal Pay and Opportunities Act since its inception in 2018.
Over the years, the law has seen several amendments aimed at refining its requirements to promote more transparency in the hiring process.
Notably, as of January 1, 2023, employers have been obligated to disclose not just the pay range but also a general description of benefits in all job postings.
While the amendment does not alter these existing requirements, it introduces new provisions intended to assist businesses in complying with the law’s aims.
Key features of the amendment include a correction period that extends from its effective date until July 27, 2027.
During this timeframe, employers will have the opportunity to rectify any noncompliant job postings within five business days of receiving a notice of noncompliance from any individual.
One critical aspect of this provision is that the law does not elaborate on how this notice should be issued, creating a space for the Department of Labor & Industries (L&I) to clarify the process.
Given the limited time for corrections, it is imperative for employers to consider designating an email address specifically for receiving such notices and incorporate this information into their standard job postings and careers webpage.
Additionally, the amendment redefines employer obligations when it comes to reporting pay.
Previously, L&I enforced a strict requirement for a pay range even when employers were offering a fixed wage.
The new guidelines specify that if an employer is offering a fixed wage for a position, they are required to disclose that fixed amount in job postings.
Another important clarification revolves around unauthorized third-party job postings.
Under the new statute, employers are held responsible for recruitment activities conducted indirectly through a third party.
However, the amendment indicates that employers will not be liable for penalties stemming from unauthorized postings made by third parties.
Furthermore, the law sets forth that employers will not incur penalties if they reach out to third-party entities demanding the correction of postings listed on their platforms.
As part of implementing these changes, it may also be prudent for employers to send formal written notice to third-party services requesting corrections and maintain proof of such notifications for their records.
This is particularly relevant for those employers who actively utilize third-party recruitment services beyond their official career sites.
The amendment also addresses concerns regarding statutory damages for violations of the pay transparency law.
Plaintiffs in ongoing lawsuits have been arguing for a standardized damage amount of $5,000 per applicant in relation to noncompliant postings, along with claims for attorneys’ fees and costs.
However, the passage of this amendment has clarified that any statutory damages would fall within a range of $100 to $5,000 per violation, with courts and L&I instructed to consider various factors when determining the penalty amounts.
The impact of this amendment on existing lawsuits remains unclear, but it certainly offers significant relief for businesses moving forward, provided they take proactive steps to enhance their posting practices.
Employers are encouraged to undertake a comprehensive review of their job postings and establish auditing procedures to ensure compliance with pay and benefits disclosure requirements.
While Washington has established stringent regulations and witnessed considerable litigation concerning pay transparency, employers across the nation must remember to consider similar laws that exist in approximately 21 other states and local jurisdictions to ensure comprehensive compliance.
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