Connecticut Employers Take Note – Cease Seeking Past Pay Information

Big changes are coming to Connecticut employers and with it, many organizational hiring practices with the passage of HB Number 6380.

HB Number 6380 limits the disclosure of wage information from past positions. Currently, Connecticut employers are prohibited from asking (or directing a third party to ask) about an applicant’s wage and salary history. Employers can, however, ask about other elements of an applicant’s compensation structure, so long as they don’t ask for a value of those components. Conn. Gen. Stat. Ann. § 31-40z(b)(5).

On October 1, 2021, “An Act Concerning the Disclosure of Salary Range for a Vacant Position” will take effect. Under this new statute, employers will be required to provide applicants the wage range for the position(s) the applicant has applied for. Under the statute, “wage range” is defined as the “range of wages an employer anticipates relying on when setting wages for a position.” It can include reference to pay scales, previously determined wages for the position, actual ranges for the employees who currently hold a comparable position, or the employer’s budgeted amount for the position.

For applicants, this information must be provided either when the applicant requests the information, or if the applicant doesn’t request the information, prior to or at the time the applicant is made an offer of employment and compensation. Additionally, employers will have to provide the wage ranges not only to new hires, but also to employees when they change positions with the organization, or more generally, at the time of the employee’s first request for a wage range. An individual may bring a civil action for violations of these new requirements within two years of a violation. Potential remedies include compensatory damages, attorney’s fees and costs, punitive damages, and other legal and equitable relief.

Further, the new law modifies the prohibition against sex-based compensation decisions. While the current statute provides employers cannot pay someone of the opposite sex less for equal work, the amendment updates this language to provide that employees of the opposite sex may not be paid less for “comparable work”. Thus, changing the status from equal work to comparable work. To determine whether work is considered comparable requires evaluation of numerous factors including “a composite of skill, effort and responsibility.” Employers may also use geographic location, credentials, skills, education, and training as differentiating factors that impact compensation decisions.

What should Connecticut employers do next? First, implement a process for your organization to ensure that when an employee or applicant requests wage information, hiring managers and human resources professionals can provide or direct requestors to the appropriate contact person who can provide them with the information in a timely manner. Second, ensure hiring managers and human resources professionals are up to date on the new requirements and what will be expected moving forward. Third, now would be a good time to review your compensation structure and where your employees fall within that structure. Are there any employees or areas of the business who are undercompensated or have been overlooked from a compensation perspective? This is an important step, even for employers with structured compensation processes and guidelines. As this wage data becomes more readily available to applicants and employees, employers will want to ensure they are able to explain their compensation practices to employees who may not have had exposure to this level of information from their employer before.

For further information concerning rights and obligations concerning HB Number 6380, a member of Verrill’s Employment and Labor Practice Group.