New Equal Pay Transparency Laws will Likely Affect PERM Prevailing Wage Determinations

By: Ashima Chock

Many states and localities, including Colorado, New York City, and Washington State, have recently passed Equal Pay Transparency (EPT) laws. In New York City the law will go into effect on November 1, 2022. In Washington State, Rhode Island, and California the requirement will go into effect on January 1, 2023. Meanwhile, New Jersey, Colorado, Ohio, Connecticut, Maryland, and Nevada EPT rules are already in place.

Equal Pay Transparency Law

The exact nature of EPT laws varies from state to state. In Washington, the law requires employers with at least 15 employees to disclose a wage scale or salary range, list of benefits, and any alternative compensation in the initial job posting. While in California, employers with 15 or more employees will be required to post pay ranges and employers with less than 15 employees will need to disclose pay range to any applicant who requests it. Additionally, all employers in California will be expected to keep pay history records for all employees for at least three years after the employment period ends. In Rhode Island, if an applicant requests wage information, an employer must provide it before any discussion of compensation. To ensure compliance, employers should research the EPT requirements in their state.

Equal Pay Transparency Laws Determining Prevailing Wage

As part of the PERM process, labor market testing is used to determine Prevailing Wage rates. As more employers are required to make salary information available publicly, labor market testing will be impacted, and it is expected Prevailing Wage Determinations (PWD) will increase.

It is recommended practitioners conduct wage analyses before testing efforts in order to get a better understanding of where the market currently stands. However, this process is not guaranteed to be accurate, and should only be used for estimations prior to receiving the official test results.

If local EPT protocols require minimum and maximum salaries to be posted on all job advertisements, companies must follow that requirement regardless of federal PERM requirements unless exception to PERM advertisements is adopted so that it is not considered as unlawful discriminatory practice. For example, under PERM regulations, newspaper and journal advertisements do not need to have wage requirements posted. However, most EPT laws require salary range to be posted. In a situation like this, employers will be expected to post salary and wage information as required by EPT.

Conclusion

It is essential all employers comply with Equal Pay Transparency laws. All businesses should make sure all current job postings and records meet EPT standards, especially those with PERM applicants and recipients unless an exception is made. For assistance in ensuring compliance, case-specific questions, or general help with PERM or EPT requirements, please contact the Chugh, LLP immigration attorneys.