Several States Enact Pay Transparency Laws Affecting Employers Nationwide

Amid an effort to push for enhanced worker rights and to reduce pay disparities for women and minorities, pay transparency laws are becoming more common throughout the US. Thirteen states or local governments require employers to be more transparent in communicating pay ranges to applicants and employees. Estimates are that by the end of 2023 1 in 4 workers will be protected by a pay transparency law.

As usual, California’s requirements are among the most stringent requiring employers (even if just one employee or applicant resides in California) to post the pay range in any job posting. This includes jobs posted on a company’s website and on public job boards such as LinkedIn and Indeed. Additionally, employers must provide the pay scale for an employee’s current position upon request by an employee. California also requires employers with 100 or more employees to submit a pay data report to the state’s Civil Rights Department beginning in May 2023. This report must include the media and mean hourly rate for each combination of gender, race and ethnicity.

It’s already illegal to ask applicants about their current salaries in at least 14 states. Other states with state-wide pay transparency laws include Colorado, Rhode Island and Washington.

What Does This Mean for Employers?

Employers should review current job postings, especially those on national platforms and modify them to be compliant with transparency laws. Anticipate that Plaintiff’s will start to pursue this as an avenue with easy proof of non-compliance. Seek counsel if you are uncertain whether your pay or recruiting practices violate these new laws.

Increases to Retirement Plan Contribution Limits

The IRS increased the amount employees can contribute to their 401k plans to $22,500, a $2,500 increase over last year’s limits. The “catch-up” contribution, for employees over 50 years old, also increased to $7.500 from $6,500. These limits apply to 401(k), 403(b) and most 457 plans.

The limit on annual contribution to an IRA increased to $6,500, up from $6,000. And the IRA catch-up contribution remains at $1,000.

This is a great opportunity to share the good news with your employees, some of whom may be interested in maximizing their retirement plan contributions. It’s also a good time to confirm with your payroll processor that they have adjusted their systems to accommodate the new contribution limits.

If you have any questions on how these laws affect you or your business please don’t hesitate to reach out: Terri@BarbasCremer.com. We are here to help you address the day to day questions of balancing business concerns, and employee culture.