Employers in Washington are facing a flurry of class actions alleging violations of the state’s new pay transparency law. While it is too early to gauge the viability of the claims, employers doing business in Washington may want to be on alert and may want to review job postings in light of the new law’s technical requirements.

Quick Hits

• Employers in Washington face a flurry of class actions related to the state’s law requiring disclosure of salary ranges or wage rates, a general description of benefits, and other compensation information in job postings.
• The lawsuits seek damages of at least $5,000 for each alleged job applicant for each job posting that failed to comply with the law.

Background

In March 2022, Governor Jay Inslee signed into law Senate Bill (SB) 5761, which updated Washington’s Equal Pay and Opportunities Act (EPOA) to require pay transparency in job postings. Specifically, the law, codified in the Revised Code of Washington (RCW) 49.58.110, requires employers with fifteen or more employees to affirmatively disclose in each job posting the salary range or wage scale offered for the position, in addition to a general description of all benefits and other compensation offered for the position. The law defines a “posting”—printed or electronic—as “any solicitation intended to recruit job applicants for a specific available position, including recruitment done directly by an employer or indirectly through a third party.”

The pay transparency law made Washington one of a growing number of states, including California, Colorado, and New York, with similar pay transparency laws. These laws are placing burdens on employers with regard to setting and disclosing compensation information to all potential applicants, including those applying for remote positions, and handling the fallout from potential perceived pay discrepancies between job postings and existing positions.

While the Washington law was ostensibly meant to promote pay transparency, some had warned that its statutory damages provisions would increase liability for companies as they grappled with the law’s broad, and somewhat undefined, requirements. Those initial fears appear to be coming true, at least in the short term, as exhibited by this recent slew of lawsuits.

Recent Developments

Since the Washington law went into effect on January 1, 2023, job applicants have filed dozens of putative class actions against employers alleging they applied for job openings for positions in Washington where the employers did not disclose salary ranges or wage scales, describe the benefits, or include other compensation information. The suits seek not only declaratory and injunctive relief but also statutory damages in the amount of actual damages or $5,000 per violation, whichever is greater, for each applicant.

With potential damages of $5,000 per violation per applicant and a nearly inexhaustible pool of applicants for jobs, the lawsuits have the potential for devastating liability for employers.

Next Steps

Many of these lawsuits are still in the early stages and it is unclear how they will play out. Still, employers in Washington may want to take note of the increasing number of suits and the potential for liability.

As such, employers may want to review their job posting policies and agreements with third-party recruiters to evaluate their job postings in light of the pay transparency requirements. They may also want to conduct pay audits and review desired compensation for various positions. In setting compensation ranges, employers may want to consider qualifications, such as experience, education, and geography.