Hawaii Enacts Pay Transparency Law and Expands Equal Pay Law

Seyfarth Synopsis: On July 3, 2023, Hawaii Governor Josh Green signed into law a pay transparency bill that will require employers to disclose in job listings an hourly rate or salary range that reasonably reflects the actual expected compensation for the job.  The bill will also expand Hawaii’s equal pay law to (1) prohibit pay discrimination based on any protected category under Hawaii law, not just sex; and (2) compare employees who are performing “substantially similar work,” rather than “equal work.”  The law will become effective January 1, 2024.

 

Required Pay Disclosure in Job Listings

Hawaii has become the latest jurisdiction to enact a law that will require pay transparency in job postings.  Effective January 1, 2024, Hawaii employers with fifty or more employees will be required to disclose in job listings an hourly rate or salary range that reasonably reflects the actual expected compensation for the role.  The law does not define “hourly rate” or “salary range.”

Employers should note, the Hawaii law will not require employers to disclose pay information in job listings for positions that are internal transfers or promotions within the company.  This is a departure from several other jurisdictions’ pay transparency laws, which require internal job postings to follow the same pay transparency requirements as external job postings.

The law also explicitly excludes job listings for positions with employers that have fewer than fifty employees and for public employee positions for which salary, benefits or other compensation are determined pursuant to collective bargaining.  The law does not specify whether the fifty employee threshold refers to employees within Hawaii or to a company’s total employee count.

Expansion of Equal Pay Law

The newly signed bill will also amend Hawaii’s equal pay law in two ways.

First, the law will now prohibit pay discrimination based on any protected category under Hawaii law, not just sex.  Accordingly, employees may now bring claims of discrimination in pay based on race, sex including gender identity or expression, sexual orientation, age, religion, color, ancestry, disability, marital status, arrest and court record, reproductive health decision, or domestic or sexual violence victim status.

Second, the law adopts a different standard for comparing employees.  Hawaii’s equal pay law previously tracked the federal Equal Pay Act’s “equal work” standard and required an employee to establish that they were paid less than another employee for “equal work on jobs the performance of which requires equal skill, effort, and responsibility, and that are performed under similar working conditions.”  This “equal work” standard has now been replaced with a “substantially similar work” standard such that employees may now be compared if they are performing “substantially similar work.”  This tracks recent development in several other jurisdictions, like California and New York, that have adopted this “substantially similar work” standard.

Enforcement and Potential Remedies

While the newly enacted bill does not contain separate provisions on enforcement or remedies, Hawaii law generally allows individuals claiming to be aggrieved by an alleged unlawful discriminatory practice to file a complaint with the Hawaii Civil Rights Commission.  Individuals also have a private right of action under Hawaii law. 

Next Steps for Employers

Hawaii employers should take steps to ensure that they are ready to comply with the new law on January 1, 2024.  Employers should evaluate the practical implications of adding appropriate pay ranges to Hawaii postings and train hiring managers, talent acquisition professionals, and human resources employees on the requirements of the law.

As always, Seyfarth’s Pay Equity Group is available to assist employers in navigating these new requirements and ensuring that they are ready for the ongoing trend towards greater pay transparency generally.

 

*Tatiana Sterling is a Summer Fellow in Seyfarth’s New York office.