Q: I have employees in Connecticut. What do I need to know about the new pay equity law?
A: Effective January 1, 2019, employers are not allowed to: (1) inquire (whether directly or through a third party) about a prospective employee’s wage history; or (2) prohibit employees from disclosing or discussing the amount of their wages or the wages of another employee that has been voluntarily disclosed by the other employee.
“Wages” are defined as “compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation.” 2018 Conn. Pub. Act No. 18-8, Section 1(a)(3). Employers can inquire about the existence of other elements of a prospective employee’s compensation structure (such as stock options), but cannot inquire about the value of those elements.
Under the new law, employees must be permitted to discuss wages with each other, but the law does not require any employer or employee to disclose the wages paid to any employee. As a result, employees have a right to discuss their wages with other employees, but are under no obligation to do so. Importantly, employers may continue to keep individual employee wage information confidential.
Connecticut joins many other states and localities that have enacted similar laws, including New York City, Delaware, and California. Like New York City’s law, Connecticut’s prohibition on, inquiries about wage history does not apply if the applicant discloses his or her wage history voluntarily. The question of whether such a disclosure was made voluntarily can be tricky, however, especially after the fact, so employers should tread carefully.
The Connecticut law provides a private right of action to both prospective employees and employees, and authorizes suit within two years of an alleged violation. Employers who are found to have violated the law may be liable for compensatory damages, punitive damages, and attorney’s fees and costs.
To ensure compliance, employers should review job applications for positions in Connecticut to ensure that they do not include inquiries about wage history. Employers should also review offer letters and employment agreements to ensure they do not contain language prohibiting disclosure and/or discussion of compensation. Finally, employers should update internal policies and interview guidelines, and ensure that all relevant personnel are aware of the new law.