Connecticut Passes Law Requiring Employers to Disclose Wage Ranges to Both Applicants and Employees
On June 7, 2021, Governor Lamont signed a bill requiring employers to disclose salary ranges for positions to both applicants and employees. The law also expands Connecticut’s prohibition on gender-based pay discrimination to now require equal pay for “comparable” instead of “equal” work. The new law goes into effect October 1, 2021, and requires an employer to disclose or provide to an applicant the wage range for an open position at the applicant’s first request or prior to or at the time an offer of compensation is made to the applicant; and to provide an employee with the wage range for the employee’s position upon the hiring of that employee, a change in their position, or the employee’s first request for a wage range.
Employees or prospective employees can bring a court action against an employer for violation, subject to a two-year statute of limitations. A successful claim can result in the employer being responsible for paying compensatory damages, attorney’s fees and costs, and even punitive damages in some circumstances.
The law has some troublesome provisions, including defining a “wage range” as “the range of wages an employer anticipates relying on when setting wages for a position.” The definition also includes references to any applicable pay scale, previously determined range of wages for the position, actual wages for those employees currently holding comparable positions, and the employer’s budgeted amount for the position.
Employers also face greater risks from the new law as it includes a “comparable worth” cause of action for wage disparity. Specifically, the law prohibits an employer from paying an employee less than what an employer is paying an employee of the opposite sex for comparable work. Comparable work will be determined when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions. The burden is on the employer to explain and/or justify any difference based on factors other than gender, such as credentials, skills, or geography, as well as education, training, and experience.
Given these significant changes, employers should consider adopting or amending policies to comply with the new law before its effective date and start developing objective criteria and documentation regarding salary ranges. Employers would also be wise to comb through their salary records and employee rosters to identify any potential risks of claims under the comparable worth definition set forth in the gender-based pay prohibition sections of the new law.