December 19, 2022

Washington’s Department of Labor and Industries has issued guidance on SB 5761 — signed by the Governor on March 30, 2022 and effective on Jan. 1, 2023 — that requires employers with 15 or more employees to disclose in each job posting the wage scale or salary range, and a general description of all the benefits and other compensation to be offered. "Posting" means 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 any printed or electronic postings that define qualifications for desired applicants.

Highlights

  • The “15 or more employees” threshold includes employees that do not have a physical presence in Washington, if the employer has one or more Washington-based employees.

  • Employers that do not have a physical presence in the state but engage in business in Washington, or recruit for jobs that could be filled by a Washington-based employee, are subject to the requirements.

  • An employer cannot avoid disclosing wage and salary information requirements by indicating within a posting that the employer will not accept Washington applicants.

  • Employers do not need to disclose wage and salary information for jobs to be performed entirely outside of Washington, even if the job posting reaches applicants who would fill the position as a Washington-based employee. This out-of-state exception must be applied narrowly, on a case-by-case basis.

  • Employers are not required to disclose wage and salary information in printed hard copy postings made and distributed entirely outside of Washington. A wage scale or salary range should provide the applicant with the employer’s most reasonable and genuinely expected range of compensation for the job. The range should extend from the lowest to the highest pay established by the employer prior to publishing the job posting. If the employer does not have an existing wage scale or salary range for a position, it should be created prior to publishing the posting. A scale or range’s minimum and maximum should be clear without open-ended phrases. Examples of appropriate wage scales or salary ranges are provided.

  • A “general description of all benefits” includes, but is not limited to, health care, retirement, any benefits permitting paid days off (including more generous paid sick leave accruals, parental leave, and paid time off or vacation benefits), and any other benefits that must be reported for federal tax purposes, such as fringe benefits.

  • “Other Compensation” includes, but is not limited to, bonuses, commissions, profit sharing, stock options, or other forms of compensation that would be offered to the hired applicant in addition to their established salary range or wage scale.

  • On electronic job postings, employers must include a general description of benefits and other compensation but may choose to include a link to a more detailed description.

  • Job postings must include wage and salary information when the posting includes qualifications for desired applicants of a specific position. Qualifications are, but are not limited to, the specific knowledge, skills, or abilities requested for applicants or suitability of the position. Examples as to what is and is not considered a job posting are provided.

Next steps

The guidance has clarified the law’s application, and Washington employers must prepare to be transparent about pay in job postings by Jan. 1, 2023. Here are some steps to consider:

Assess current programs across four key dimensions, and strengthen where necessary 

  • Job organization
    • Are jobs well defined? Well-defined roles can help ensure understanding of the pay for the nature of work.

    • Are jobs organized into a meaningful and logically consistent framework? Ambiguity in the relative contribution of a role might make it difficult to understand the pay associated with the role.

    • Do employees and managers know how to navigate their careers? Once job postings include pay ranges, current employees may want to understand how their career and pay opportunities compare.
       
  • Pay strategy
    • Does the organization have a compensation philosophy? A well-articulated rationale as to why the pay system is designed as it is, what skills or performances are rewarded, and how that pay is delivered puts pay ranges into context.

    • Are benchmark jobs and salary ranges up to date? Competitive pay ranges will ensure that posted ranges attract the right talent.
       
  • Pay equity
    • Is robust statistical analysis used to identify and remediate disparities? Sharing pay ranges can carry risks if employees’ actual pay relative to those ranges is not defensible from a human capital management perspective.

    • Can pay decisions be soundly defended? Confidence that pay policies and practices mitigate inequities can help assure candidates and employees about pay equity.
       
  • Employee perception
    • How do candidates and employees view the organization? Understanding how the organization’s value proposition is viewed is critical to ensuring pay ranges meet the expectations of candidates and employees.

Define the pay transparency story by answering key questions

  • What is the desired compensation story?
  • What will be shared?
  • With whom will the story be shared?
  • How will the information be shared, and what is the desired reaction?
  • Why is the compensation story important?

Implement changes

  • Create a digital platform where employees and external candidates can access salary information and explore career paths.
  • Develop training toolkits and resources for managers and HR partners to ensure the compensation strategy is effectively and consistently communicated.
  • Enhance performance management and coaching resources to include modeling tools that illustrate earnings potential for various career opportunities.

Share efforts beyond the posting of pay ranges

  • Highlight key experiences and branded employee communication/messaging.
  • Define broad external candidate messaging that is consistent with internal messaging.
  • Create a communication playbook (including target audience, communication objectives for the audience, delivery vehicles, frequency/timing, challenges, metrics, etc.) to ensure clarity and transparency for all employees at various points of the journey.

Measure effectiveness

  • Survey candidates and employees to identify unmet needs and what aspects of the value proposition — including compensation — are most important.
  • Conduct statistical modeling to see how employees' perception of pay affects outcomes (such as turnover).

States trend toward pay transparency

In recent years, many states have enacted legislation requiring the disclosure of salary ranges and pay data. For example, in Colorado, each job vacancy posting has to disclose the hourly wage or salary, or the hourly wage or salary range, and give a general description of all benefits and other compensation offered. The implementation rules specify that this requirement does not apply to jobs performed outside of Colorado and job postings entirely outside of Colorado. California, Connecticut, Maryland, Nevada, New York City, Rhode Island and Washington also require employers to disclose — voluntarily or on request — information about salary ranges for open positions or promotions. Other states, such as Massachusetts and New York, are considering similar legislation. For more information, see Roundup: US employer resources on states’ recent equal pay laws.
 

Related resources

Non-Mercer resources

Mercer Law & Policy resources

Other Mercer resources

Tauseef Rahman
by Tauseef Rahman

Partner, Career

Stephanie Rosseau
by Stephanie Rosseau

Principal, Mercer’s Law & Policy Group

Fiona Webster
by Fiona Webster

Principal, Mercer’s Law & Policy Group


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