The topic of salary equality has been prevalent in recent years. As part of this trend, Rhode Island recently passed amendments to its pay equity law. This law applies to employers that employ any one person in the state of Rhode Island. The amended law aims to “…comprehensively address wage discrimination, based on religion, race, color, sex, sexual orientation, gender identity or expression, disability, age or country of origin by expanding employee protections and the scope of the remedies available to employees who have experienced wage discrimination.”
The governor signed the amended law on July 6, 2021. But employers will have plenty of time to review their policies and procedures. The law is not effective until January 1, 2023.
The amended law makes a number of detailed changes related to pay discrimination. In addition to addressing pay equity, the law also creates:
- 1. A wage history ban
- 2. A wage range disclosure requirement
Rhode Island’s Salary History Ban
- Using wage history when deciding whether to consider an applicant for employment.
- Requiring that an applicant’s prior wages meet a minimum or maximum criteria as a condition of being considered for employment.
- Relying on an applicant’s wage history when determining the wages the applicant will be paid after being hired.
- Seeking an applicant’s wage history.
After making an initial offer of employment with an offer of compensation, employers may use an applicant’s wage history to support a wage higher than the wage offered by the employer. However, an employer can only use wage history for this purpose if the wage history was voluntarily provided by the applicant, without prompting from the employer. If an employer does use wage history for this purpose, the employer can seek to confirm the wage history. Employers should take note that employers can only rely on wage history in the circumstances outlined above to the extent that it does not create an unlawful pay differential, as provided by Rhode Island law.
But what if an employer learns of a candidate’s salary history? First, there’s no penalty if the candidate is an employee of the company and the employer has knowledge of the candidate’s wage history with the employer. Employers can still obtain a background check that does not seek wage history. But if the background check discloses the applicant’s wage history – they may want to proceed with caution. Even with the knowledge, employers can’t use it to make certain decisions. That includes determining wages, other compensation, or benefits for an applicant during the hiring process, including employment contract negotiations.
Additionally, employers are allowed to verify voluntarily provided information about an applicant’s unvested equity or deferred compensation that would be cancelled or forfeited by the applicant’s resignation from their current employment or any voluntary disclosure of non-wage related information.
Wage Range Disclosure Requirement
To add more transparency to the hiring process, Rhode Island’s amended law includes a wage range disclosure requirement. Upon request, employers must give applicants the wage range for the job. The law also states that employers should provide the wage range for the job the applicant is applying for before discussing compensation during the hiring process. In addition to applicants, employers must also give employees the wage range for their position at the time of hire, when moving into a new position, and anytime upon the employee’s request during the course of employment.
Employers may not refuse to interview, hire, promote, employ, or retaliate against an applicant or employee who either didn’t provide wage history or requested the wage range for a position.
Employers should work with their trusted legal counsel to determine if changes are needed to their current process.