Washington State Updated Guidance for 2023 Pay Transparency

On January 1, 2023, Washington State’s new law SB 5761 will go into effect, which requires employers with 15 or more employees to include “wage or salary range, and general description of all benefits and other compensation to be offered to a hired applicant on job postings.” Washington State Department of Labor & Industries released a draft administrative policy that provides updated guidance on this new Pay Transparency requirement.

Summary of Guidance

Job Posting Definition:

“Any solicitation intended to recruit job applicants for a specific available position, including recruitment done directly by an employer or indirectly through a third party, and includes any postings done electronically, or with a printed hard copy, that includes qualifications for desired applicants.”

Employers Covered:

All employers with 15 or more employees, including employees that do not have a physical presence in Washington. The requirement also includes employers that do not have a physical presence in Washington but engage in business in Washington or recruit for jobs that could be filled by a Washington-based employee. Per the draft guidance, disclosures are required for remote positions if the work could be performed by a Washington-based employee and employers cannot avoid the disclosure requirements by stating in postings they will not accept Washington applicants. Employers do not need to disclose for jobs that will be performed entirely outside of Washington, even if it reached an applicant who would fill the position as a Washington-based employee, however the guidance specifies that the “out-of-state exception must be applied narrowly,” on a case-by-case basis.

What Information Must be Disclosed on a Job Posting?:

A wage scale or salary range that would “provide the applicant with the employer’s most reasonable and genuinely expected range of compensation for the job.” The range should have the lowest to highest pay that has been established prior to the job posting. The guidance specifies that the range’s minimum and maximum should be clear and not have open ended phrases such as “$60,000/per year and up” or “Up to $29.00/hour.” If the wage scale or salary range changes after a job posting is published, the posting should be updated to reflect the new wage scale/salary range.

In addition to the wage scale/salary range, a “general description of all benefits and other compensation” is also required. This includes, but is not limited to healthcare benefits, retirement benefits, paid days off (including paid sick leave accruals, parental leave, paid time off, and vacation benefits), and any other benefits that must be reported for federal tax purposes such as fringe benefits. If there are multiple options for benefits such as insurance plans or retirement plans, employers should list the options on the job posting. Employers should also list the number of days or hours an applicant would expect to receive for paid time off, vacation, paid holidays, or more general paid sick leave.

“Other compensation” includes, but is not limited to, bonuses, commissions, profit-sharing, stock options or other compensation that would be offered to the hired applicant. For electronic job postings, employers must include a general description of benefits and other compensation, but they can also choose to use a hyperlink that leads the applicant to a more detailed description. It is the employer’s responsibility to “assure continuous compliance with functionality of links, up-to-date information, and information that applies to the specific job posting, regardless of any use of third-party administrators.”

Additional Guidance Provided:

• If an employer wants to implement a starting rate/starting range for a probationary period, the starting rate/range may be listed on the posting, but the entire range must also be listed.
• If an employer publishes a job posting that can be filled with multiple job titles that depend on experience (e.g., Analyst 1, Analyst 2, Analyst 3), the employer should define the salary ranges for each potential position.
• Jobs that are compensated by commission rates should include the commission rate or rate range that would be offered. Jobs that are compensated by piece rate or a wage range plus piece rate both should be included.
• If there are multiple retirement plan options, the employer should list the options.

With these new requirements, Washington joins a growing number of states requiring increased pay transparency on job postings. Employers who operate in multiple states, or seek remote workers in various states, are already confronting a patchwork of different requirements. These employers will need to decide whether they will adopt a uniform approach or respond to each individual disclosure requirement. Organizations should also evaluate their compensation methods and practices to start preparing for the questions that are likely to arise as Pay Transparency becomes more widespread.