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Tuesday, July 23, 2024

DC Law Requires Job Ads to Give Salary Range

An update on news folks might have missed — employment news you might be able to use, especially if you’re applying for a new job or even a promotion at your current company.

The DC Wage Transparency Omnibus Amendment Act just went into effect. That law means that as of June 30, every job posting has to say how much it pays. That can be a range from minimum and maximum salary or else hourly pay information. The law applies to new applicants and also to people applying for a new job with the company they already work for, including for promotions and transfers.

Proponents of pay transparency laws say laws like this say they close racial and gender wage gaps. We know that people are not always paid the same money for the same work in particular, across gender and race. A National WOmen’s Law Center Study in 2023 found that Black women in America earn only 52 cents for every dollar made by a white man doing the same job.

So the District’s anti-discrimination law is designed to empower workers — If you’re applying for a job, the law gives you leverage when you’re negotiating your pay. It also means there will be information out there about what other people doing the same work are getting.

That’s because employers can’t decide what they want to pay after they look at the applicants.  Now, job applicants will have some idea what the company is willing to pay.

But potential employers are also not allowed to try to find out what the person applying for the job has been paid in the past —or to use that information as part of the hiring process.  That’s not just about how much money you’ve made in a previous job —that’s also any information “related to compensation”. Guidance isn’t out yet, but that’s pretty thorough protection that could mean that an employer can’t ask about your past benefits or healthcare plans, either.

A potential employer also has to tell people applying for the job about any healthcare benefits *before* the first interview. And they have to have a sign in the workplace telling employees of their rights under the law.

Finally, some companies dislike like it when employees talk about what they’re paid. DC law already prevented bosses from retribution after that kind of talk amongst employees and protected them from retaliation. The law is now expanded from wages to compensation —,meaning employees are now protected if they want to talk about other benefits like healthcare and vacation time.

These kind of laws are already  on the books in about 15 states —the first state to pass one was Colorado in 2019. So the sample is from a short timeline, but evidence seems to show it works: When Colorado passed pay transparency law in 2019, publicized salaries increased by about 3.6% after the law went into effect.

Federal jobs already have to list pay publicly. In 2022, the gender wage gap among federal workers was roughly 6% compared to a 16% gap for national employers overall.

It’s good for business too: companies with pay transparencies have more trust from applicants and employees and greater rention. Those employees are also already using the law.

For instance, a woman in New York, where pay transparency has been in effect since September 2023, posted on X (formerly Twitter): “My company just listed on LinkedIn a job posting for what I’m currently doing… and now, thanks to salary transparency laws, I see that they intend to pay this person $32K to $90K more than they currently pay me. So I applied.” And it apparently caused quite a stir among the workforce.

Don’t get it wrong: the District law doesn’t guarantee people won’t be paid differently for the same job. But if they are, the employer needs to have legitimate reasons, like higher pay is due to more experience, education or a special skillset. The new law should mean that companies will have to document those reasons in a way that can be understood.

But there are some concerns. Earlier versions of the law would have required employers to give more information, including the full “schedule of benefits” – like bonuses, healthcare and other benefits, stocks, bonds, options, equity, and “nonmonetary remuneration” – DC ultimately opted to narrow this obligation and require only a simple disclosure regarding the “existence of healthcare benefits.”

And there is a problem with precision. Just like the New York state law, the DC law is a bit too vague for some— the law says that when an ad gives a salary range, “the range shall extend from the lowest to the highest hourly wage or salary that the employer in good faith believes at the time of the posting it would pay.”

That “good faith” thing can be a problem. One compensation consultant at salary.com said he’s seen organizations being called out in other states for posting ridiculously wide ranges that are the equivalent of not having a range at all. For instance one company posted a job with a range of $90,000 to $900,000 — nearly a million dollars, so basically no information at all. Presumably this is a violation of the law but is hardly helpful to applicants.

Privacy concerns are also not addressed in the law —it’s not clear how a new hire could protect information about their salary from their colleagues. They might be worried that information could used against them.

Finally, the law doesn’t allow workers to directly sue the employer. It’s the attorney general who looks into violations. They can find them: If an employer is found to have violated the law, the penalties add up:  it’s $1,000 for the first violation, $5,000 for the second violation and $20,000 for each subsequent violation of the law. AG can also take an employer to cicl court to get relief for employees. Who knows how good DC will be at this? But in the first two years Colorado had the law on the books, the state fined five companies $237,000, according to Bloomberg, and send citations to 14 more.

But what isn’t clear is if the law applies to remote positions, especially people who are working outside of the District for a DC based company. It isn’t clear how the law applies to jobs posted by recruiting agencies. And finally, it isn’t clear what happens if someone discloses information about their pay or benefits from past jobs during interviews or hiring.

Also worth noting: DC’s legal minimum wage increased as of July 1!

The new minimum wage in the District is $17.50 per hour (up from $17) and the new tipped minimum wage is $10 per hour (up from $8).

 if the average hourly tip earnings in a given weekly plus that $10 don’t add up to at least $!7.50, the employer must pay the difference. Minimum wage is supposed to increase every year to account for the increase in sounder pricing. That was 2.8 percent in the DMV last year. After Initiative 83 passed in November 2022, the tipped wage is being phased out slowly until tipped workers make minimum wage as well in 2027.

Tipped wage goes up to $12 per hour on July 1, 2025, $14 per hour on July 1, 2026, and will be gone, replaced with D.C.’s standard minimum wage as of July 1, 2027.

Report wage and hour violations to OAG. Email workers@dc.gov or

trabajadores@dc.gov or call 202-724-7730

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