Washington State Amends their Pay Transparency Law

Washington State has further updated their Equal Pay and Opportunities Act (EPOA) to focus on increasing pay transparency efforts. While it initially prohibited sex- and gender-based pay discrimination, it has expanded upon this base through the years since. Below is a recap since our initial reporting in 2023.

Historical Summary

• January 1st, 2023: Substitute House Bill 5761 went into effect and Washington employers with at least 15 employees were required to disclose “the wage scale or salary range, and a general description of all of the benefits and other compensation to be offered to the hired applicant” on all job postings.
• March 28th, 2024: Substitute House Bill 1905 was signed into law. This bill expanded the protected classes under the EPOA from sex and gender to include all protected classes under the Washington Law Against Discrimination, including age, marital status, race, national original, citizenship status, sexual orientation, presence of a disability, veteran or military status, and more. Substitute House Bill 1905 centered around pay equity and protecting merit-based selection opportunities. With it, pay and advancement decisions are only compared between similarly employed employees, in which the employees are under similar conditions, and perform work that requires “similar skill, effort, and responsibility”. These amendments will go into effect on July 1st, 2025.
• April 22nd, 2025: Substitute House Bill 5408 passed the Washington State Senate. The updates in SB 5408 include a revision to the previous bill requiring a “wage scale or salary range” as some roles only offer a fixed amount of pay. Employers are now permitted to list only that fixed amount if a scale or range does not exist, including for internal transfers. Additional updates also included a clarification of statutory damages and a grace period for employers.

Current Updates

Historically, noncompliance with the EPOA could pose some significant liability. Previously, the EPOA allowed job applicants to seek $5,000 in statutory damages for each noncompliant job posting. This led to a large influx of class action lawsuits, some seeking significant damages for minor noncompliance. It has now been clarified that plaintiffs may seek statutory damages of “no less than $100 and no more than $5,000 per violation”, with $5,000 being the cap and based upon size of the employer, the amount necessary to deter future violations, and whether the violation was willful.

Notable for employers, this Amended SB 5408 will provide Washington employers with a grace period for change. Since the passing of SB 5761, Washington has a spike in litigation related to pay and benefit information in job postings. From now until July 27, 2027, employers must be given the opportunity to correct a job posting that does not meet the requirements of the law. While any person may offer ‘written notice’ to an employer that they believe has created a posting that does not follow the job pay transparency requirements, employers now will receive five business days from receipt of this notice to correct the posting. It has also been clarified that employers are not liable for unauthorized third-party postings. This written notice and five-day correction opportunity must be provided before an individual may seek any legal recourse. If the posting is corrected within that time, no damages, penalties, or lawsuit may be brought forth regarding it. After July 27, 2027, this grace period will be over.

Washington State’s most recent amendment provides employers with good-faith opportunities to improve while continuing to show that pay equity is at the forefront of their minds. This is a good time for employers to make sure they are on top of their employee pay practices. Employers should be mindful that differences in pay between protected groups does not necessarily mean that discrimination has taken place. Pay differences are permissible when they can be attributed to job-related or merit-based factors, such as education, experience, or performance.

Employers should continue to perform pay equity audits on a regular basis and ahead of these upcoming effective dates. Contact the People Insights team at Berkshire to help ensure your compensation system is designed to meet these and other regulations.