Alert Icon Washington Requires Pay Ranges in Job Postings
Beginning January 1, 2023, employers with at least one employee based in Washington and 15 or more employees total will be required to post a wage scale or salary range in job postings. Postings must also include a general description of all the benefits and other compensation, like bonuses, paid time off, or profit-sharing, offered for that position. These requirements only apply to job postings that include qualifications for applicants.
According to a draft administrative policy from the Washington State Department of Labor & Industries (L&I), employers must disclose pay information in postings for remote work that could be performed by a Washington-based employee. Employers can’t avoid the requirement to post a pay range by stating they won’t accept Washington applicants in a job posting. While administrative policies don’t have the force of law, they generally indicate how the regulatory agency (L&I) will interpret and enforce the law. Also keep in mind that this is only a draft document and could change before it’s finalized.
The draft policy also addresses other issues, including what constitutes a job posting, examples and explanations of salary ranges, and more. You can read the draft administrative policy here.
The law is not applicable to transfers for current employees if there is no job posting, but employers will still need to disclose this information to employees they offer an internal transfer or promotion to if asked (as required by current law).
Broader Implications
The intent of the requirement to post pay scales in job postings is to promote pay equity and to help close the wage gap for those who are disadvantaged in the job market through no fault of their own. While the approach may feel drastic to private employers, it has been used successfully in the public sector for many years. In fact, after the initial rough patch (which may require a fair bit of work from employers who don’t have established pay structures), these pay transparency requirements are likely to streamline hiring, compensation, and talent development processes and make your business run more efficiently.
Job postings with pay ranges are shown to get significantly more applicants, so while this new requirement may feel burdensome, it will likely provide you with a tactical advantage over competitors in other states, as well as those who choose not to comply or who provide ranges that are so broad as to be meaningless. You’re also in good company—by the end of 2023, it’s estimated that 25% or more of all private employers will be required to post pay ranges with their job ads.
What to Expect
You should anticipate that employees will see your job ads and react to the pay scales provided there.
If the ranges you post in ads seem too wide, employees and applicants may think you’re not acting in good faith. This will breed distrust and could potentially lead to employees or applicants reporting you for failure to comply with the law. If the ranges are reasonable but you have current employees outside of those ranges, that will likely lead to some immediate feedback.
In many cases, employees will begin discussing this new information with their coworkers. Discussing wages is protected by both federal and Washington law, so employers should not attempt to stop or prevent these conversations or punish employees for having them. The result of this sharing may be that employees discover one-off or systematic pay inequality, in which case you may have issues with morale, turnover, union organizing, or lawsuits.
Even if your pay choices are perfectly logical across the board, employees will often not understand why a job like theirs has a lower pay range than a different type of job in your organization. While you’re not required to provide employees with explanations for why you’ve selected the pay ranges that you have, for the sake of morale, retention, and your reputation as an employer, you should be prepared to provide a rationale for your choices.
What to Do Now
Don’t panic. If you don’t have documented pay ranges, start working on them. You may want to consider hiring outside help if you don’t already have a basic, defensible pay structure and detailed job descriptions.
If you are preparing for this on your own, here are some tips:
- Each job description should have a designated pay range.
- Within each pay range, you should have an explanation of how an employee moves from the bottom of the range to the top.
- If you know that you’ll be advertising pay ranges that are above what you pay your current employees for the same work, strongly consider providing them with raises to bring them into that pay range (failure to do so could easily lead to pay equity claims).
- If you are already aware of pay equity issues or become aware of them, start correcting them as soon as possible. You may want to consult with an employment attorney in Washington to strategize how to limit your liability.
Please contact Kruse HR for guidance at krusehr@kruseassoc.com.