Learn about Hawaii's new law that intends to increase pay transparency and reduce pay inequalities in the workplace.
If you're a Hawaii business owner with 50 or more employees, there is a new law on pay transparency you need to know about. On July 3, 2023, Governor Josh Green signed into law SB 1057, a bill that will enhance pay transparency and further promote equal pay in the workplace — and this bill takes effect on January 1, 2024. So, what do you need to know? Keep reading for more information, including bill details and steps to stay ahead of this new requirement.
What is Hawaii's new pay transparency law?
Starting January 1, 2024, private employers in Hawaii with 50 or more employees must:
- Disclose the hourly or salary range on job listings that reasonably reflects the expected compensation for the position.
- Pay workers fairly, not discriminating against employees by paying wages to employees at a lesser rate than other employees who perform substantially similar work because of a “protected category.”
Hawaii's pay transparency law follows similar laws recently enacted in California, Colorado, and New York, intending to reduce pay inequality in the workplace by disclosing more pay information on job applications. Not only does it benefit job applicants, but it benefits current employees too. How? It gives them visibility into wage ranges of open positions, enabling them to seek higher compensation, thereby helping to reduce pay inequalities further.
Exemptions from the law
Hawaii employers do not need to disclose wage ranges for job listings for internal transfers or promotions. Public employers and businesses with less than 50 employees are also not subject to this new rule.
Potected categories in Hawaii
“Protected categories” (sometimes referred to as “protected classes”) refer to groups of people legally protected from being harmed or harassed by laws, practices, and policies.
Protected categories vary by state, but in Hawaii, they include:
- Sex, including gender identity or expression
- Sexual Orientation
- Marital Status
- Arrest and Court Record
- Reproductive Health Decision
- Domestic or Sexual Violence Victim Status (if the employer knows such status)
This means paying employees less than their peers for substantially similar work based on these protected categories is illegal and unacceptable. Instead, Hawaii's new pay transparency law affirms that employees who perform work “which requires equal skill, effort, and responsibility…under similar working conditions” must receive equal pay.
Acceptable ways to pay employees differently
There are several employment categories when pay differentials are acceptable. Common, job-related criteria can include:
- Seniority or tenure in your organization
- Performance or merit
- Quantity or quality of production
- Bona fide occupational qualification
- Any differential except those protected categories listed above
If you don't comply with Hawaii's new law, job candidates or current employees may file a complaint with the Hawaii Civil Rights Commission (HCRC), and ultimately, you could face a lawsuit.
What can Hawaii employers do?
Here are a few steps you can take before the law takes effect on January 1, 2024:
- Step 1: Inform your recruiters and hiring managers about Hawaii's new pay transparency law, and let them know it takes effect soon. You can even share this blog post with them.
- Step 2: Pull an employee census report of everyone in your workforce and see if their current pay meets the hourly or salary ranges your open positions will soon advertise.
- Step 3: If certain employees are underpaid, correct discrepancies. One way is to give these employees merit increases.
- Step 4: Finally, review all job postings and update all listings on every job platform to include hourly or salary ranges. And don't wait until December 31 to make changes. Update your job listings sooner rather than later.
Stay compliant with ProService
Want to stay compliant with today's ever-changing state and federal rules? Partnering with ProService can help! Our HR services keep payroll, benefits, and HR simple for busy employers and provide you with timely updates on critical changes to the business and HR landscape. Sign up for a free 15-minute consult and learn how we can help your people and business.