Washington State’s New Pay Equity Law

Pay equity legislation is a trend that’s sweeping the country.  Washington State joined the ranks of other cities, counties, and states by passing The Equal Pay Opportunity Act (EPOA).  The law was recently signed by the governor and goes into effect on June 7, 2018. 

Washington State was one of the first jurisdictions to pass a pay equity law in 1943.  The EPOA significantly expands that existing law.  The intended purpose of the law is to narrow the pay gap between men and women.  However, the law focuses on “gender” instead of “sex,” so its application is not limited to discrimination against women.  For example, employees with nontraditional gender identities are also protected by the law. 

All employers employing any employees in Washington are subject to the law.  Here’s a summary of some of the law’s main points:

Compensation Obligations for Employers:

·         The EPOA prohibits discrimination in compensation between “similarly employed” employees.

o   Similarly employed employees are those who:

§  (1) Work for the same employer;

§  (2) Have the same job performance requirements for skill, effort, and responsibility; and

§  (3) Have jobs performed under similar working conditions

 

·         The EPOA prohibits discrimination in payment of discretionary and nondiscretionary wages and employment benefits.

 

·         “Discrimination” does not include wages based in good faith on bona fide job-related factors that:

o   (1) Are consistent with business necessity;

o   (2) Are not based on or derived from a gender-based differential; and

o   (3) Account for the entire differential.

·         Some examples of bona fide job-related factors include:

o   Experience

o   Training

o   Education

o   Merit system

o   Seniority system

o   Production-based earnings system

o   Regional differences in compensation levels (such as local minimum wage laws)

 

·         The EPOA prohibits employers from limiting or depriving employees of “career advancement opportunities” on the basis of gender.

 

·         Employers cannot prohibit their employees from disclosing their wages.

o   But employers can prohibit employees who have access to the employer’s compensation records through the essential functions of their jobs from disclosing the wages of other employees (unless compelled by law or investigation).

 

·         Employers cannot retaliate against employees for:

o   Discussing their wages;

o   Asking the employer to explain their wages;

o   Asking the employer about a lack of opportunity for advancement;

o   Filing a complaint under the EPOA;

o   Testifying in a proceeding under the EPOA; or

o   Aiding or encouraging other employees to exercise their rights.

 

Enforcement and Remedies

A violation of the EPOA occurs any time a discriminatory decision or practice is adopted, each time discriminatory compensation is paid, or any time a discriminatory practice is applied to an employee.

There are two different options for employees to enforce their rights under the EPOA.  First, an employee can file a complaint with the Washington Department of Labor & Industry.  If the claim can’t be resolved and is decided in the employees’ favor, the employer may be liable for actual damages, statutory damages, interest, civil penalties, and investigation and enforcement costs.

Second, an employee can file a lawsuit.  If the employee prevails, the employee could be liable for actual damages, statutory damages, interest, costs, and attorneys’ fees.  The court might also order reinstatement or other non-monetary relief. 

 

Takeaways

The EPOA is a new challenge for Washington State employers.  Prior to the law going into effect, employers should consider the following:

·         Review compensation structures, particularly for similarly employed employees.  Document the reasons for any differences. 

·         Review compensation policies for hiring and promotion. 

·         Institute formal pay scales.

·         Discontinue policies that prohibit employees from disclosing their wages.

·         Discontinue asking for an applicant’s salary history.

·         Be sure management and human resources staff are aware of the new law. 

·         Be watchful for additional new laws or ordinances.  Cities, counties, or other local governments in Washington may pass their own pay equity laws that are stricter than the EPOA.  If that occurs, the more employee-friendly law would control.   

Contact support@myhrcounsel.com for questions regarding the new law. 

 

 

 

 

 

 

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