Salary disclosure: It’s now the law

As appeared in the Fairfield County Business Journal

By Kevin Zimmerman
October 1, 2021

As Among a range of laws that went into effect on Oct. 1 — including allowing medical marijuana users to grow their own on a limited basis, new restrictions on where one can smoke (cannabis and otherwise) and requiring all passengers in the back seats of vehicles to wear seat belts — there is one that a Westport attorney believes many business owners are not fully aware of.

“To be compliant with every statute and regulation is nearly impossible,” FLB Law partner Stephen Fogerty said. “And it becomes much more difficult when they’re simply unaware that such a regulation is on the books.”

The regulation in question is Public Act 21-30, “An Act Concerning the Disclosure of Salary Range for a Vacant Position.” Ostensibly passed to address gender inequality in pay — nationwide in 2020, women who worked full time earned 83 cents for every dollar men took home, up slightly from 82.3 cents in 2019, according to the U.S. Census Bureau — the law has even wider implications for employers and employees alike, Fogerty said.

“A prospective employee can request the salary range for a given position, and the employer must disclose it,” he said. “On the other hand, if the employee doesn’t ask, the employer doesn’t have to provide it.”

Even so, the statute requires employers to provide the salary range not only when discussing the position, but also at the time of hiring.

“You might think they’d be the same thing, and they usually are — but not always,” Fogerty said. “By the time of hiring there may been a change in the job description, so it’s up to the employer to disclose what the new range is.”

The new law might strike some as superfluous — most prospective employees, after all, get around to talking compensation before accepting a job — but Fogerty said the fact that it requires a salary range, rather than a set figure, can play a significant role in negotiations.

“If I’m paying someone who’s already on staff $20 an hour, but want to hire someone new at $17, I have to disclose the $17 to $20 range,” he explained. “And that can make the conversation more difficult — ‘Why are you offering me 17 instead of 20?’ The employer can have a number of reasons, including experience of the established employee, different responsibilities and the fact that the prospective employee is just coming on board and may be eligible for a raise down the line.”

The attorney said he believes that there “is no downside” for the prospective employee in such a situation. For the employer, however, the ramifications can be significant.

Employees can bring civil actions against the employer for violations of the new requirements within two years after a violation. Potential penalties include compensatory damages, as well as attorney fees and costs and punitive damages — none of which are typically recoverable, Fogerty said — along with other relief determined by a jury and/or judge.

Existing employees can also benefit, he said. “They can ask what the salary range is for the position they’re currently in, and that can lead to a conversation about why the new guy is being offered a different range. But the statute says (the existing employee) can ask once” per given circumstance. “You can’t go back every week and ask again,” Fogerty said.

And while most businesses maintain they are an equal opportunity employer, the fact remains that Connecticut too has a gender pay gap. According to research by business.org, women earn an average salary of $55,636 in the Nutmeg State while men earn an average salary of $66,477 — nearly a 16% difference, but still the tenth-smallest such disparity in the U.S.

Fogerty said that the new law should address those gaps as well as those affecting minorities, although, “You can’t bring a claim of unequal pay unless you know what others are being paid” for similar jobs. While that could make for uncomfortable conversations with co-workers, Fogerty noted that that was one of the principles behind Connecticut General Statute 31-40z, to which the new law is an amendment. 31-40z prevents the penalization of employees for discussion or disclosure of wage information.

As for out-of-state workers, Fogerty said the law applies to “every employer doing business in the state of Connecticut.” In other words, a company based in Danbury whose staff includes someone in White Plains is subject to the Connecticut law.

“Fairfield County draws workers from a number of states,” he noted.

If the employer is in a state without such a law, and the employee resides in a state with such a statute, the law does not apply, he added.

The real problem, as Fogerty sees it, is that the new law has not been sufficiently promoted for all employers to understand what their new obligations are. “And it’s not just companies with 250 employees,” he noted. “It says if you have one or more employees, it applies to you.”

Law firms and HR departments have been trying to push out information about the new law since it was signed by Gov. Ned Lamont in July, Fogerty said. “Even so, I believe the business community at large is not fully aware of it.”

FLB Law has “had some inquiries from some of the larger and more sophisticated employers,” he added, “but not very much from smaller employers. We’ve brought it up in conversation with our clients, and they’ve been almost universally surprised to hear about it.

“It’s not a bad law,” Fogerty said. “It’s just one they need to be aware of.”