Rhode Island joined the growing list of states implementing pay transparency laws when it amended its Equal Pay Law, effective January 1, 2023

In this article, we'll explore the key aspects of Rhode Island's pay transparency legislation and its implications for employers.

Salary Range Disclosure Requirements

Under the new law, Rhode Island employers must disclose wage information to employees and job applicants in several scenarios:

1. When a current employee requests it, employers must provide the wage range for their position.
2. Upon request, employers must provide job applicants with the wage range for the position they are applying for.
3. Employers should provide the wage range for a position prior to discussing compensation with an applicant, even without request.
4. Employers must provide wage range information to employees at the time of hire and when they move into a new position, regardless of request.

Salary History Ban

The amended law also prohibits employers from inquiring about or relying on an applicant's salary history.

Specifically, employers cannot:

1. Use an applicant's wage history when deciding whether to consider them for employment.
2. Require that an applicant's prior wages meet certain criteria as a condition of being considered for employment.
3. Rely on wage history to determine the wages for a new hire.
4. Seek the wage history of an applicant.

However, after making an initial employment offer with compensation, employers may rely on voluntarily provided wage history to support a higher wage offer.

Expanded Pay Equity Protections

Rhode Island's new law broadens the scope of pay equity protections. Employers are now prohibited from paying employees less than those of another protected category for “comparable work”.

According to Rhode Island's amended pay equity law, comparable work is defined as work that requires substantially similar skill, effort, and responsibility, and is performed under similar working conditions

This expands upon the previous requirement of equal pay for equal work. Protected categories include race, color, religion, sex, sexual orientation, gender identity or expression, disability, age, and country of ancestral origin.

The shift from equal work to comparable work potentially increases employers' liability for pay disparities.

Permissible Pay Differentials

While the law aims to eliminate unjust pay disparities, it does allow for wage differences based on certain factors. These include:

1. Seniority systems
2. Merit-based pay systems
3. Systems measuring earnings by quantity or quality of production
4. Geographic location
5. Reasonable shift differentials
6. Education, training, or experience

Employers should ensure that any pay differentials are based on these permissible factors and can be clearly justified.

Penalties for Non-Compliance

Employers who violate Rhode Island's pay transparency law may face significant penalties:

1. Pay equity violations: Employers may be liable for unpaid wages, compensatory damages, and liquidated damages up to twice the amount of unpaid wages.
2. Salary history ban or wage range disclosure violations: Employees can claim compensatory damages or $10,000 in special damages, plus equitable relief.
3. Civil penalties: The Rhode Island Department of Labor and Training can impose fines ranging from $1,000 to $5,000, depending on prior violations.

However, the law provides a grace period for civil penalties until December 31, 2024.

Safe Harbor Provision

To encourage proactive compliance, the law includes a safe harbor provision valid through June 30, 2026.

Employers can protect themselves from lawsuits if they review their pay practices honestly and fix any unfair wage differences within two years before a lawsuit is filed.

After June 30, 2026, employers who conduct self-evaluations and correct disparities will still be protected from some types of damages but may be liable for unpaid wages.

Employer Obligations

To comply with the new law, Rhode Island employers should:

1. Review and update their hiring practices to remove salary history questions.
2. Develop processes for determining and disclosing wage ranges for all positions.
3. Train hiring managers and HR personnel on the new requirements.
4. Conduct regular pay equity audits to identify and address any unjustified wage disparities.
5. Update job postings and application forms to align with the new law.
6. Post the required notice (once available) in the workplace explaining employee rights under the new law.

It's all gaining momentum

Rhode Island's pay transparency law represents a significant shift in the state's approach to pay equity and fairness.

By requiring salary range disclosures and prohibiting salary history inquiries, the law aims to reduce pay disparities and promote more equitable compensation practices.

Employers in Rhode Island must adapt their hiring and compensation processes to ensure compliance with these new requirements