Rhode Island has enacted (HB 5261), a stringent pay equity law which applies to all employers in the state. The law takes effect January 1, 2023, and broadens pay discrimination protections, requires pay range disclosure and bans salary history inquiries.
Pay Discrimination. Under the new law, employers are prohibited from paying any of its employees less than they pay employees of another race color religion, sex, sexual orientation, gender identity or expression, disability, age, or country of ancestral origin for comparable work.
Employees performing comparable work must be paid equally unless the employer can justify a wage differential based on seniority, merit, job-related education or training, or another reasonable non-discriminatory factor. Comparable work is defined as work requiring substantially similar skill, effort and responsibility and performed under similar working conditions.
Wage Disclosure. The law also includes wage discussion protections. Employers cannot prohibit employees from discussing their, or another employee’s, wages or retaliate against them for any wage discussions. However, employees aren’t required to disclose their wages and the law doesn’t limit their rights under a collective bargaining agreement.
Salary History. The law also prevents employers from inquiring about or relying on an applicant’s salary history to make hiring decisions or pay determinations. However, after making an initial employment offer, an employer may rely on an employee’s voluntarily provided salary history to support a compensation level higher than the initial offer, provided that an unlawful pay differential does not result.
Employers must provide applicants with the wage range for a position upon request. This information must be provided to the applicant before discussing the applicant’s specific compensation. Pay range information must also be provided to an employee:
- At the time of hire;
- When an employee moves into a new position; and
- At an employee’s request during the course of employment.
Employers cannot retaliate or discriminate against an applicant or employee because they did not provide their wage history, or they requested a wage range.
Safe Harbor. The law provides a “safe harbor” if an employer has analyzed pay and rectified any identified problems. An employer would have an affirmative defense to all liability if it evaluated its pay practices within the two years prior to commencement of an action and can show that any unlawful pay differences identified by the analysis have been eliminated. A permissible self-evaluation may be “of the employer’s own design” or on a “standard template or form” to be issued by the Department of Labor and Training.
Penalties. Administrative penalties for violations of the law may reach $1,000 for a first violation and up to $5,000 for an employer with two or more previous violations. However, no penalties will be assessed until 2025. The law also allows a private right of action, with potential remedies including back pay, compensatory damages and attorney fees.
Next Steps for Employers
Employers should review job postings, job applications, interview materials, handbooks, and policies that address compensation and pay practices. Employers should train supervisors, managers and employees involved in interviewing on permissible and prohibited questions and practices.