Since 2016, hundreds of bills and dozens of new laws aimed at closing the pay gap have been introduced and enacted at both the state and local levels. These laws include jurisdiction-specific pay equity laws, salary history inquiry bans, and wage transparency protections. Each of these types of laws are described more fully below.
Jurisdiction-specific pay equity laws generally prohibit employers from paying employees unequal pay for "comparable" or "similar" work (as opposed to "equal" work required under the federal law and most standard pay discrimination laws). These enhanced pay equity laws vary in scope and complexity, but in general they all expand the scope of comparators required when determining whether an employee is being paid appropriately, narrow the available defenses for employers trying to explain or justify an employee's pay, and increase the penalties available against employers that violate them. The following U.S. states and territory currently have jurisdiction-specific equal pay laws in effect: California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Maryland, Massachusetts, New Jersey, New York, Oregon, Puerto Rico, Vermont, and Washington.
Salary history inquiry bans restrict employers' ability to ask about the salary history earned by applicants and, in many cases, preclude employers from relying on an individual's prior salary to set compensation. In essence, by banning employers from using salary history to set future compensation, any salary that historically was tainted by bias no longer will be relied upon. The theory behind these measures is that, by eradicating reliance on a pay structure that was inherently biased against women and other protected groups, the pay gap will be reduced or eliminated. The following U.S. states and territory currently have salary history bans: Alabama, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, New Jersey, New York, Oregon, Puerto Rico, Vermont, Virginia, and Washington. In addition, the following cities/local jurisdictions have enacted salary history bans: San Francisco, CA; Kansas City, MO; New York City, NY; Albany County, NY; Suffolk County, NY; Westchester County, NY; Cincinnati, OH; Toledo, OH; and Philadelphia, PA.
Wage transparency laws prohibit employers from barring pay disclosures in the workplace and from retaliating against employees who discuss their pay with others. Wage transparency allows employees to talk about their compensation—or the compensation of other employees—without fear of retribution. In theory, when employee compensation data is shared, collected, and reported freely, it promotes fair pay both within companies and across industries. The following states and city have enacted wage transparency protections: California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New York, Oregon, Vermont, and Washington.
The combination of these three types of pay equity laws, particularly when they are juxtaposed against existing federal, state and local non-discrimination requirements, pose complex compliance challenges for employers.
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