Update Applicable to:
All employers and multi-state businesses with at least 1 worker in the state of Hawaii.
Three big changes to pay equity are coming. The first two equal pay expansions are applicable to employers of all sizes, while the pay posting requirement only affects employers with 50 or more employees. All the three laws will be effective on January 1, 2024.
What are the details?
Equal Pay: Not Just for Men and Women Anymore
Equal pay will be required across all protected categories covered by Hawaii’s employment discrimination statute, which include race, sex (including pregnancy, childbirth, and related medical conditions as well as gender identity or expression), sexual orientation, age, religion, color, ancestry, disability, marital status, arrest and court records, reproductive health decisions, or domestic or sexual violence victim status.
The acceptable reasons for a pay differential remain the same: a seniority system, merit system, a system that measures earnings by quantity or quality of production, a bona fide occupational qualification, or a permissible factor other than the protected classes (location would be an acceptable reason for a difference in pay).
Equal Pay: A Lower Standard for Comparison—Equal Work Is Not Required
Instead of requiring that employees or groups of employees be paid the same if they do equal work, the standard for equal pay will now be substantially similar work. This opens the door to significantly more comparisons (and potential claims), even across departments or job types.
Hourly Rate or Salary Range Required in Job Postings
Employers with 50 or more employees will need to include the hourly rate or salary range in job postings. This does not apply to internal transfers or promotions.
The rate or range posted needs to reasonably reflect the actual expected compensation. While the intent of the posting requirement is to promote pay equity and further close the wage gap, it benefits employers by streamlining your hiring processes and attracting more applicants.
As an example, you might pay your project managers anywhere from $55,000–$150,000 depending on their level of experience and responsibility. If you know your project manager position will be filled by someone less experienced (and therefore less expensive), you should advertise the range you believe you will hire in, e.g., $55,000–$70,000, rather than advertising $55,000–$150,000. Aside from the fact that this is required, it benefits you by discouraging people from applying who ultimately would not accept your offer.
- Review and update the necessary posters, policies, payroll inequities and practices.
- Consider a communication plan regarding the new requirements and posters for your managers, leaders, and employees, as well as relevant third parties.
- Consult with a labor attorney for further guidance if needed.
Need help understanding how changes to employment laws will affect your business?
Learn more about how Vensure's Hawaii PEO services can help you navigate complex employment laws and keep your business compliant.
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