Hawaii to require pay disclosure in job listings, expands equal pay law 

July 18, 2023
On July 3, 2023, the governor signed legislation (SB 1057) requiring employers with 50 or more employees to include pay or salary as part of a job listing to increase pay transparency and equal pay for all employees. The law, effective Jan. 1, 2024, also expands the equal pay discrimination protections and will only be applied prospectively. 

Disclosures in job listings

Job listings must disclose an hourly rate or salary range that reasonably reflects the actual expected compensation.

Exemptions

The disclosure requirement does not apply to job listings for:

  • Positions that involve internal transfers or promotions within a current employer
  • Public employee positions for which salary, benefits or other compensation are determined by collective bargaining
  • Positions with employers with fewer than fifty employees

Equal pay nondiscrimination protections

Employers are prohibited from discriminating between employees in a protected category (not just sex) by paying wages to employees in the same establishment at a rate less than the rate at which the employer pays wages to other employees for substantially similar work (previously, this applied to equal work). 

Pay transparency expanding to opportunity transparency

Several states have enacted legislation requiring the disclosure of salary ranges and pay data in recent years. For example, in New York, an employer, employment agency, employee or agent thereof is required to include compensation or the compensation range when advertising a job, promotion or transfer opportunity that will physically (at least in part) be performed in New York. California, Connecticut, Maryland, Nevada, Rhode Island and Washington also require employers to disclose — voluntarily or upon request — information about salary ranges for open positions or promotions. Other states, such as Massachusetts, are considering similar legislation.

In addition to states requiring disclosure of pay ranges, states such as Colorado are focused on increasing the visibility of job opportunities to employees and candidates. In addition to including pay information on postings, they want to ensure potential candidates are aware of such postings.

For more information, please refer to the Roundup: US employer resources on states’ recent equal pay laws.

Next steps

Assess current programs across four key dimensions, and strengthen them as necessary

  • Job organization
    • Are jobs well defined? Well-defined roles can help ensure understanding of the pay for the nature of work.
    • Are jobs organized in a meaningful and logically consistent framework? Ambiguity in the relative contribution of a role might make it difficult to understand the pay associated with the role.
    • Do employees and managers know how to navigate their careers? Once job postings include pay ranges, current employees may want to understand how their career and pay opportunities compare.
       
  • Pay strategy
    • Does the organization have a compensation philosophy, including a well-articulated rationale as to why the pay system is designed as it is, what skills or performances are rewarded, and how pay is delivered — to put pay ranges into context?
    • Are benchmark jobs and salary ranges up to date? Competitive pay ranges will ensure that posted ranges attract the right talent.
       
  • Pay equity
    • Is robust statistical analysis used to identify and remediate disparities? Sharing pay ranges can carry risks if employees’ actual pay relative to those ranges is not defensible from a human capital management perspective.
    • Can pay decisions be soundly defended? Confidence that pay policies and practices mitigate inequities can reassure candidates and employees about pay equity.
       
  • Employee perception
    • How do candidates and employees view the organization? Understanding how the organization’s value proposition is viewed is critical to ensuring pay ranges meet the expectations of candidates and employees.

Define the pay transparency story by answering key questions

  • What is the desired compensation story?
  • What will be shared?
  • With whom will the story be shared?
  • How will the information be shared, and what is the desired reaction?
  • Why is the compensation story important?

Implement changes

  • Create a digital platform where employees and external candidates can access salary information and explore career paths.
  • Develop training toolkits and resources for managers and HR partners to ensure the compensation strategy is effectively and consistently communicated.
  • Enhance performance management and coaching resources to include modeling tools that illustrate earnings potential for various career opportunities.

Share efforts beyond the posting of pay ranges

  • Highlight key experiences and branded employee communication/messaging.
  • Define broad external candidate messaging that is consistent with internal messaging.
  • Create a communication playbook (including target audience, communication objectives for the audience, delivery vehicles, frequency/timing, challenges, metrics, etc.) to ensure clarity and transparency for all employees at various points of the journey.

Measure effectiveness

  • Survey candidates and employees to identify unmet needs and which aspects of the value proposition — including compensation — are most important.
  • Conduct statistical modeling to see how employees' perception of pay affects outcomes (such as turnover).

Related resources

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Mercer Law & Policy resources

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