Seyfarth Synopsis: Connecticut has enacted legislation that will require employers to provide applicants and employees with wage ranges for positions. The new law also broadens the standard for gender wage discrimination, requiring employers to provide equal pay for comparable (rather than equal) work; and adds credential, skill and geographic location to the list of examples of bona fide factors that may justify a wage difference.
Employers Must Disclose Wage Ranges to Applicants and Employees
Effective October 1, 2021, Connecticut will join California, Colorado, Maryland, Toledo, Cincinnati, and Washington State in requiring employers to provide wage range information for their positions. Similar to Colorado and Washington, the law will require disclosure to both applicants and current employees.
Provide an applicant the wage range for a position for which the applicant is applying upon the earliest of (1) the applicant's request, or (2) prior to or at the time the applicant is made an offer of compensation.
Provide an employee the wage range for the employee’s position upon (1) the hiring of the employee, (2) a change in the employee's position with the employer, or (3) the employee’s first request for a wage range.
The law defines “wage range” as the “range of wages an employer anticipates relying on when setting wages for a position, and may include reference to any applicable pay scale, previously determined range of wages for the position, actual range of wages for those employees currently holding comparable positions or the employer’s budgeted amount for the position.”
The law provides for a private right of action and requires that an action be brought within two years of an alleged violation. Potential remedies include compensatory damages, attorney’s fees and costs, punitive damages, and such legal and equitable relief as a court deems just and proper.
One potential point of confusion is that the bill is titled “An Act Concerning the Disclosure of Salary Range for a Vacant Position” (emphasis added), but the text of the law does not limit the scope to vacant positions, and appears to allow a current employee to request (at least once) the wage range for his or her currently held position. In addition, the law’s broad definitions of “employer” and “employee” lead to some ambiguity regarding its application for out-of-state employees and/or employers, especially given the lasting impact of the COVID-19 pandemic on remote work. Specifically, it is not clear whether an employee who works remotely in a different state (where the employer is located in Connecticut) or an employee who works remotely in Connecticut (where the employer is located in a different state) will be entitled to wage range information under the law. Further guidance will hopefully clarify some of the ambiguity in the statute before the requirements become effective on October 1.
Pay Equity Law Expanded
The new law also broadens the standard used to determine whether an employer is discriminating in the amount of compensation it pays an employee based on sex. While the current law prohibits employers from paying employees of the opposite sex less for equal work, the amendment will instead prohibit employers from paying employees of the opposite sex less for comparable work. In addition, the list of examples of bona fide factors that may justify wage differences has been expanded to include credential, skill and geographic location.
Connecticut employers should review their personnel practices to ensure that they have a system in place for timely responding to applicant and employee requests for wage range information. Employers should also consider training hiring managers and human resources employees on the amendments. As always, Seyfarth’s Pay Equity Group’s attorneys are available to assist employers in navigating these new requirements and ensuring that they are ready for the ongoing trend toward greater pay transparency generally.