On Jan. 12, 2024, Washington, D.C. Mayor Muriel Bowser signed a new pay transparency act. The act takes effect on June 30, 2024, and requires D.C. employers to post salary ranges and benefits information for open positions, and establishes increased protections for current and prospective employees to inquire about and discuss compensation.
The act applies to employers that employ at least one employee in the District.
Pay Disclosure Obligations
This new law requires D.C. employers to disclose pay rates and healthcare benefits for open positions. Specifically, employers must provide “the minimum and maximum projected salary or hourly pay in all job listings and position descriptions advertised.” The act does not clearly define “job listings” or “position descriptions advertised,” but it appears to require the disclosure of projected pay ranges in public job postings as well as internal announcements about promotion and transfer opportunities. The pay ranges disclosed should be “the lowest to the highest salary or hourly pay that the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion, or transfer opportunity.”
Additionally, although not required in job postings, the Act requires employers to disclose to applicants “the existence of healthcare benefits that employees may receive” before the applicant’s first interview. The bill’s legislative history suggests that a simple disclosure of the existence of healthcare benefits, without any more detailed information regarding the schedule of benefits, would be sufficient.
These provisions are part of a trend of pay transparency laws enacted in recent years by states across the country.
Protections for Discussing Compensation and Limits to Inquiring into Pay History
The law also expands protections for employee discussions about and inquiries into compensation. Under existing law, D.C. employers cannot retaliate against employees who discuss “wages” (with exceptions for certain employees such as human resources employees). The new act will expand these protections to protect discussions regarding “Compensation,” defined as “all forms of monetary and nonmonetary benefits an employer provides or promises to provide an employee in exchange for the employee’s services to the employer.”
The new law also prohibits employers from screening applicants based on wage history. This includes a prohibition on employers requiring that an applicant’s wage history satisfy minimum or maximum criteria. It also prohibits employers from requesting or requiring that an applicant disclose his or her wage history. Finally, the law prohibits employers from seeking an applicant’s wage history from a prior employer. The act requires employers to post a new notice regarding employee rights under the act in the workplace.
Although the act does not create a private right of action, it empowers the D.C. Attorney General to investigate potential violations, issue subpoenas, and enforce the act in D.C. Superior Court. The Attorney General can recover restitution, injunctive, compensatory, or “other authorized relief” for any individual or the public at large, as well as attorneys’ fees if the Attorney General prevails in court.
Open Questions Under the Act
The act includes a few ambiguities that raise questions for employers.
First, the full reach of this law appears broad. The act defines “employer” includes individuals and entities that employ at least one employee in the District of Columbia, and excludes the D.C. and federal governments. The act does not specify how close the employee’s relationship to D.C. must be to trigger the applicability of the act. For example, it is not clear if an employee who regularly works in Virginia but occasionally works from home in D.C. would trigger the applicability of the act. Similarly, the law is silent on whether it is intended to cover jobs outside of the District, including entirely remote positions.
Second, the law expands protections to employee discussions and inquiries about “Compensation,” including “all forms of monetary and nonmonetary benefits.” It is not immediately clear the full scope of benefits this law would cover, particularly “nonmonetary benefits.”
Third, the act does not explicitly define what qualifies as a “job listing” or “position description advertised” requiring the disclosure of pay ranges. Presumably the act would apply to public postings on job boards, company websites, or social media, as well as internal job postings, but the parameters of what internal communications about potential openings must include pay information are not immediately clear.
Takeaways for D.C. Employers
Any employer with one or more employees in D.C. should review its job posting and screening requirements to prepare to comply with this new act. Covered employers will need to include salary or hourly wage projections in both internal and external job postings beginning on June 30, 2024. Additionally, employers will need to disclose the availability of healthcare benefits to applicants at the outset of the interview process. Furthermore, employers may need to modify their job applications that ask about wage history, and update screening questionnaires that inquire about such information. Finally, employers should develop and post a notice in the workplace that informs employees of their rights under the act.
McGuireWoods Employers’ Guide to D.C. Employment Statutes
McGuireWoods has developed a comprehensive online guide to help companies navigate the complex employment laws of Washington, D.C. The 130-page, fully annotated publication is designed to help human resources professionals, in-house counsel and small-business owners avoid pitfalls and obtain answers to common questions about the District’s workplace laws.
For further information or questions about these or any other aspects of D.C. employment law, please contact the authors of this alert or any other member of the firm’s labor and employment group.