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29 Jul

July 2021 Rhode Island HR Legal Updates

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Protections Against Pay Discrimination Enacted in Rhode Island 

Update Applicable to:
All employers in Rhode Island. 

What happened?
On July 6, 2021, Governor Daniel McKee signed Pay Equity legislation (the “Act”) (H 5261A, S 0270A) into law. 

What are the details?
The Act, effective January 1, 2023, provides multiple protections to employees against pay discrimination that are applicable to all employers while also providing employers an avenue to be completely absolved from liability. 

Wage ranges for the position an applicant is applying for and for a currently held position are required to be provided upon request to promote transparency. While in addition, employers may not prevent employees from discussing pay or refuse to interview, hire, promote, or employ applicants for employment or employees and may not retaliate against them because they requested the wage range for a position.

Employers are prohibited from inquiries about or reliance on salary history. Employers cannot rely on the wage history of an applicant both when deciding whether to consider the applicant for employment as well as when determining what amount of wages to pay the applicant upon hire, require that an applicant’s prior wages satisfy minimum or maximum criteria as a condition of employee, or seek the wage history of an applicant. 

The Act also prohibits an employer from paying “wages” to any of its employees at a rate less than the rate it pays to employees of another race, color, religion, sex, sexual orientation, gender identity or expression, disability, age (40 or older), or country of ancestral origin (“Protected Class”) for the performance of comparable work unless the employer can demonstrate that the wage differential is due to one or more of the below justifications allowed in the Act. The law provides several justifications as well as constraints that will need to be known so that they can be properly utilized. 

An employer can be completely absolved from liability against legal action for wage differentials if it can demonstrate that it conducted a good faith self-evaluation of its pay practices within the previous 2 years and prior to the commencement of the action, as well as if it can show that any unlawful wage differentials revealed by the self-evaluation were eliminated. 

To be eligible for this affirmative defense, the elimination of the wage differentials must occur within 90 days from the completion of the self-evaluation. The expiration date for this defense is June 30, 2026, to avoid all liability even after the expiration, the Act makes clear that employers that have conducted a good faith self-evaluation, eliminated any unlawful wage differentials, and have compensated its employees for any unpaid wages owed under the Act will have a complete affirmative defense to all liability. 

The Act’s legislation can be read here (S0270A) and here (H5261). 

Articles on the Act can be read here and here.

What do employers need to do?
Employers should review and be aware of the restrictions and requirements introduced with the laws in preparation for when the Act’s laws go into effect on January 1, 2023. Employers will also be required to post a notice containing excerpts and other information about the Act for employees. The Rhode Island Department of Labor and Training is required to develop the notice and a set of regulations that should further define and explain the requirements of the Act, and in particular the safe harbor provisions. The notice does not currently have a timeframe of being approved.