DC’s Wage Transparency Act aims to address one of the worst pay gaps for women of color in the US. Subject to approval by the Mayor and Congress, the bill will take effect on June 30, 2024.
In this article, we consider the current pay gap in DC, the impact of legislation, and take a look at the most recent pay equity laws.
Income disparities in DC
National Women’s Law Center (NWLC) figures reveal an overall wage gap of 15% in DC, below the national average. But that is far from the whole picture. The pay gap for women of color is alarming. Black women who work full-time in DC earn just 52 cents for each dollar White men make. That’s below the national average for Black women of 67 cents, and almost the lowest recorded of any US state.
Pay transparency legislation is aimed at addressing these income disparities.
Salary disclosure: Minimum and maximum projected salary ranges or hourly pay must be included in all job listings and job descriptions.
Employee benefits disclosure: Prior to their initial interview, employers must advise job candidates of the appropriate “schedule of benefits, including bonuses, healthcare and other wellness benefits, stocks, bonds, options, equity, and nonmonetary remunerations.”
Wage history ban: Employers cannot screen job applicants based on their wage history. A salary history ban is also in place.
Some may find the pay gap in DC surprising, given that the federal government is the capital’slargest employerwith over 300,000 employees. But the federal government is committed to strengthening pay protections. Steps taken to address gender and racial pay gap issues include the following:
Advancing equal pay is a targeted priority of the Equal Employment and Opportunity Commission’s (EEOC) strategic enforcement plan.
Updated OFCCP compliance requirements for compensation audits are aimed at closing the gender pay gap at federal level.
If successful, the Paycheck Fairness Act will strengthen the Equal Pay Act and ensure women have the right to challenge pay discrimination.
How does DC’s wage transparency act compare with state pay transparency laws?
District of Columbia pay transparency legislation affects all employers. In contrast, Washington state legislation applies to organizations with 15 or more workers. Legislation applies to employers advertising remote positions that could be carried out in Washington. Further, Washington state allows an individual private right of action against employers.
Pay transparency legislation has had a major impact on Washington state employers. Numerous businesses face class actions alleging violations following the enactment of its Equal Pay and Opportunities Act in January 2023. Law firm Emery Reddy has filed 31 lawsuits since June 2023. Allegations relate to employers failing to disclose wage information in job listings.
State statutes allow plaintiffs torecover “statutory damages equal to the actual damages or five thousand dollars, whichever is greater,” plus costs and reasonable attorneys’ fees.
For employers operating across multiple jurisdictions, considering remote work regulations is an additional challenge. Recent and upcoming changes to pay equity laws highlight those complexities:
Hawaii made major changes to its Equal Pay Act which came into force on January 1, 2024. Employers with 50 or more employers must now include hourly rates or salary ranges in job listings.
Effective January 1, 2024, Colorado’s Equal Pay Act amendments modify pay transparency requirements for job listings and internal promotion opportunities.
A wage history ban takes effect in Columbus, Ohio on March 1, 2024. The ban extends to recruitment agencies acting on behalf of employers. Companies cannot retaliate against job candidates for not disclosing their pay.
Remote work regulations are also a factor for HR managers hiring remote workers living in states covered by legislation.
Next steps for employers
Pay transparency in the US is here to stay. While legislation is only in effect in a few states to date, over half of job postings now include salary disclosures. That’s double the number in August 2020. Further, at least one in four workers is now covered by pay transparency laws.
Ensure employment law compliance in each jurisdiction where your organization operates:
Review job posting templates to comply with legislation. Consider introducing pay transparency as standard regardless of employment law compliance. It offers several benefits, including more motivated and engaged employees.
Establish a system to demonstrate how hourly rates and salary are determined for new employees. That requires an understanding of existing income disparities and gender pay gaps. Carry out a pay equity audit using pay equity software like Trusaic PayParity to identify pay inequities. PayParity carries out analyses at the intersection of multiple factors including race/ethnicity, age, disability and more.
Create equitable pay ranges for your job listings. Salary Range Finder® helps to determine competitive and fair salary ranges by overlaying internal pay equity data with external labor market data.