Hawaii Enacts Pay Transparency Law and Broadens Equal Pay Law

On July 3, 2023, Hawaii joined eight other states, as well as eight cities/counties, by enacting SB 1057, which requires that certain job listings disclose the hourly rate or salary range that “reasonably reflects the actual expected compensation” for the position being posted.1  According to the Hawaii legislature, including information about pay or salary in job advertisements will help increase pay transparency and equal pay for all employees. 

While the posting requirements apply to most job advertisements, the new law does not apply to job listings for:

  • positions that are internal transfers or promotions with the current employer;
  • public employee positions for which salary, benefits, or other compensation are determined pursuant to a collective bargaining agreement; or
  • positions with employers with fewer than 50 employees.

The legislature did not define or provide guidance on the meaning of “reasonably reflects” or how that provision will be interpreted.  The legislature also did not specify whether the 50-employee requirement includes all employees of the employer or only those in the state of Hawaii.

SB 1057 also expands Hawaii’s existing equal pay requirements by prohibiting an employer from paying employees in “any protected category” listed in Hawaii’s employment discrimination statute less than it pays other employees in the establishment for “substantially similar work”—as compared to “equal work.”  These protected categories include race, sex (including gender identity or expression), sexual orientation, age, religion, color, ancestry, disability, marital status, arrest and court record, reproductive health decision, or domestic or sexual violence victim status.  “Substantially similar work” includes work performed under similar working conditions that requires equal skill, effort, and responsibility.

As was previously permissible under Hawaii’s equal pay statute, payment differentials are allowed when due to a seniority or merit system, a system that measures earnings by quantity or quality of production, a bona fide occupational qualification, or another permissible factor other than membership in a protected category.

SB 1057 goes into effect on January 1, 2024. Employers in Hawaii should begin preparing for the January effective date by making sure their human resources and compensation departments, as well as third parties they use for posting positions, are informed of and prepared to comply with the new requirements.  Additionally, employers should consider conducting privileged pay audits to ensure compliance with Hawaii’s equal pay requirements.

See Footnotes

1 See, e.g., Jennifer Harpole, Grace McGuire and Luke Gilewski, Colorado Amends Equal Pay Transparency Posting Requirements, Extends Recovery for Wage Discrimination Claims to Six Years, Littler ASAP (June 7, 2023); Joy C. Rosenquist and Denise Visconti, California Labor Commissioner Releases Limited Guidance on Pay Transparency Law, Littler ASAP (Dec. 28, 2022); Eli Freedberg, Thelma Akpan and Liran Messinger, New York Becomes the Latest State to Require Salary Transparency in Job Postings, Littler ASAP (Dec. 28, 2022); Jennifer Harpole and Luke Gilewski; Washington State Issues Final Policy on Pay Transparency in Job Postings, Setting Most Stringent Requirements in the Country, Littler Insight (Dec. 16, 2022); Trish Martin, Breanne Martell, Denise Visconti, Corinn Jackson, Thelma Akpan, and Jenny Orr, Minding the Pay Gap: What Employers Need to Know as Pay Equity Protections Widen, Littler Report (Sept. 2, 2022).

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.