DOL Issues Salary Disclosure Guidance, Questions Remain
Days before the state’s new salary disclosure law went into effect, the Connecticut Department of Labor issued non-binding guidance intended to help both employers and employees.
Public Act 21-30 was effective Oct. 1, 2021, and requires that employers disclose the “wage range” of a position to both “applicants” and current employees.
The guidance, while helpful to the extent that it reflects the labor department’s views, does not have the force of law, meaning Connecticut courts may ultimately disregard or decline to follow it.
There are three main takeaways from the department’s Sept. 28 guidance.
1. Employers are required to disclose wage ranges to individuals at specific times, but they are not required to publicly post the information.
The law applies to applicants and current employees.
For an employee, an employer must provide the wage range only for that particular employee’s position in three circumstances: (1) upon their hire; (2) when the employee’s position changes; and (3) the employee’s first request for the information.
For an applicant, an employer must provide the wage range only for the particular position for which the applicant is applying, upon the earliest of two circumstances: (1) the applicant’s request; or (2) when the employer makes an offer.
2. The definition of ‘applicant’ remains vague.
The department notes the new law does not define the word “applicant,” and suggests that the word refers to any person who applies for a job.
This only begs the question as to when someone “applies.” Must they only express interest? Submit a resume? Complete all parts of a required application? Complete an interview? Meet certain qualification standards?
The guidance specifically states employers may not determine “applicant” status themselves in an effort to safeguard proprietary information, and that the word should be interpreted broadly.
Ultimately, it is likely the courts will determine “applicants” to be those who complete at least a minimal level of required application steps. However, this issue remains unclear.
3. Employers have discretion in determining ‘wage range.’
The law (unhelpfully) defines a “wage range” as the range of wages an employer anticipates relying on when setting wages for a position.
It gives four examples of information sources that an employer may use when determining the range: (1) any applicable pay scale; (2) any previously determined range of wages for a position; (3) an actual range of wages for those employees currently holding comparable positions; and (4) the employer’s budgeted amount for the position.
The department’s guidance confirms wages include commissions and predetermined bonuses, but does not include discretionary pay.
Until DOL or the courts provide more detailed guidance on this issue, the broad definition of “wage range” provides employers with some discretion.
The fact that employers may use “budgeted amounts” to determine a range suggests that the range may change from year to year.
In addition, the employer, in its discretion, determines the lowest and highest wage for each position, based on skill level, experience, talent, geographic location, the company’s financial health, etc., with consideration for raises and bonuses.
Employers may pay discretionary bonuses without regard to the range disclosed.
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