Washington Governor signs pay equity reform bill
Wage and Hour
On March 21, 2018, Washington officially joined the multitude of states tackling pay disparity as Governor Jay Inslee signed the Equal Pay Opportunity Act (Second Substitute House Bill 1506). The Act significantly expands Washington’s existing pay equity law for the first time since its adoption in 1943. Applying to all employers with at least one employee, the Act:
- Requires gender equality in all compensation and benefits, not just wages;
- Considers employees “similarly employed” if, under similar working conditions, their jobs require similar skill, effort, and responsibility;
- Creates a limited defense if the pay difference is entirely based on job-related, non-gender, bona fide factors, including but not limited to education, training, experience, a seniority system, a merit system, production quality or quantity, or regional market differences;
- States that prior wage or salary history isn’t a defense to charges of pay discrimination;
- Removes “male” and “female” references, and replaces “sex” with “gender;”
- Prohibits policies and systemic actions that prevent career advancement based on gender;
- Allows employees to freely talk about wages (unless their job duties give them access to other employees’ wage information) and bans mandatory non-disclosure agreements;
- Forbids retaliation against employees for talking about wages, filing a complaint, or helping someone else do so;
- Gives the Department of Labor and Industries (L&I) authority to investigate complaints and assess penalties; and
- Allows employees to file civil actions with the opportunity to collect actual damages, statutory damages, and attorney’s fees. Any wages owed would cover a four-year look-back period.
These changes take effect on June 7, 2018.
Tips: At first blush, the revisions seem moderate compared to more aggressive changes that we previously reported for California and Oregon. However, this Act adds significant muscle to Washington’s stance on pay equity and the ability of employees (and their trial attorneys) to raise claims against unsuspecting employers. Here’s a list of things to consider:
- Stop asking about prior pay in the hiring process. Although the Act doesn’t prohibit asking, considering prior wages makes continued wage disparity more likely.
- Consider parity with all compensation, not just wages. Are your benefits or bonus packages different, and, if so, can you fully justify the difference for the listed bona-fide reasons?
- Think more broadly than men and women. By removing sex references, Washington’s Equal Pay Opportunity Act can be applied to all gender-based pay disparity. Have you considered whether you can justify pay differences with transgender employees?
- Review how people get ahead in your business. Do you have a policy or practice of limiting who can apply for certain jobs or receive training? Does the policy or practice intentionally or unintentionally affect one gender more than another?
- Make sure you don’t have any written or unwritten policies that prohibit talking about wages. The National Labor Relations Act (NLRA) already protects wage discussions by most non-management workers, but the new law adds some significant enforcement teeth.
- Think before you leap into a pay equity analysis. If you want to conduct an analysis, use qualified experts and include an attorney (to protect what you find under attorney-client privilege). More importantly, consider what actions you are willing and able to take depending on what you find. Taking no action to known disparities can increase your legal liability.
- Review Vigilant’s Legal Guide, “Measuring Equal Pay, Avoid the Pitfalls” for a discussion of the federal law and first steps to avoid pay equity blunders. To discuss the state law that applies to you, call your Vigilant employment attorney.
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