Guidance on Washington’s New Pay Transparence Law

A significant amendment to Washington’s Equal Pay and Opportunities Act requiring most employers to include pay ranges, benefits, and other forms of compensation in job listings came into effect on January 1, 2023.[1]

As we discussed here several months ago, these requirements represent a major change from the previous version of the law, which only required employers to provide job applicants with the “minimum wage or salary for the position for which the applicant is applying” after extending a job offer. This change left unanswered questions about important details like who counts as a Washington employer and how specific the pay range and benefits descriptions need to be.

Fortunately, the Washington Department of Labor and Industries (L&I) updated its Administrative Policy[2] on the Equal Pay and Opportunities Act on November 30, 2022, providing much-needed guidance.

So, what are some of the key takeaways?

Many out-of-state employers hiring remote workers will be required to comply.

The law applies to employers “with 15 or more employees, engaging in any business, industry, profession, or activity in Washington.”

• • Notably, the “15 or more employees” threshold includes employees not physically located in Washington if the employer has one more “Washington-based” employees as that term is defined under Washington’s Minimum Wage Act.
  • Employers are also required to disclose a wage scale or salary range and a general description of benefits and other compensation on posting for remote work that could be performed by a Washington-based employee. An employer cannot escape these requirements by indicating within a posting that the employer will not accept Washington applicants.

Excessively broad or open-ended pay ranges do not comply with the law.

• • A wage scale or salary range needs to “provide the applicant with the employer’s most reasonable and genuinely expected range of compensation for the job.” The scale or range’s minimum and maximum need to be clear and cannot be open-ended. Phrases like “$60,000/per year and up” (with no top of the range) or “up to $29.00/hour” (with no bottom of the scale) are not good enough.
  • If an employer uses a reduced starting rate or range for an initial timeframe, such as a probationary period, both the starting rate and the entire pay range must be posted.
  • If an employer posts a job opening that can be filled will varying job titles, depending on experience, the employer must list the wage scale or salary range for each potential job title.

The description of benefits must go into more detail than a list by category.

Per L&L’s guidance, a “general description of all benefits” includes, but is not limited to, heath care benefits, retirement benefits, any benefits permitting paid days off (including more generous paid sick leave accruals, parental leave, and paid time off or vacation benefits), and any other benefits that must be reported for federal tax purposes, such as fringe benefits. The described benefits must be “the employer’s most reasonable and genuinely expected benefits offered for the specific available position.”

• L&I goes on to provide the following guidance for each category of benefit:

• • Retirement Plans: If an employer includes various types of retirement options as part of the benefits package, the employer should list the retirement option in the job posting, such as 401k, employer-funded retirement plans, deferred compensation, and other defined benefit or defined contribution plans.
  • Paid Time Off or Vacation: If the employer includes paid time off or paid vacation time as part of the benefits package, the employer should list the amount of days or hours the hired applicant would expect to receive, such as 8 hours per month or 12 days per year.
  • Paid Holidays: If the employer includes paid holidays as part of the benefits package, the employer should list the number of paid holidays the hired applicant would expect to receive in the job posting, such as 10 paid holidays per year. The employer does not have to list each paid holiday.
  • More Generous Paid Sick Leave: If the employer includes a paid sick leave policy that is more generous than that provided by Washington State law or any local ordinance that applies as a part of the benefits package, the employer should list the number of hours per month or days per year the hired applicant would expect to receive in the job posting that is greater than Washington State law or any local ordinance, such as 3 hours of paid sick leave for every 40 hours worked or 8 hours of paid sick leave per month.

Electronic job postings may link to more detailed benefit and other compensation information.

• • On electronic job postings, employers must include a general description of benefits and other compensation but may choose to utilize a link or hyperlink to lead the applicant to a more detailed description.
  • Employers are responsible for ensuring that any links function continuously and contain up-to-date information even if they are using a third-party administrator for the posting.

The level of detail required under Washington’s pay transparency law goes even further than similar laws in Colorado and New York City. With that in mind, employers are well advised to consult L&I’s guidance – which includes a variety of examples for each of the topics discussed above – and take the time to review and future job postings for compliance.

[1] Codified at RCW 49.58.110.

[2] The Administrative Policy is located at https://www.lni.wa.gov/workers-rights/_docs/ese1.pdf.