From federal guidance to state laws, hiring regulations continue to change quickly. Updates from the U.S. Equal Employment Opportunity Commission (EEOC) and new state pay transparency laws may affect how you post jobs and screen candidates. In this guide, we’ve rounded up the most important changes you need to know, along with some helpful tips for staying compliant.
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EEOC Shifts Focus Away From Disparate Impact Claims
The EEOC will no longer investigate disparate impact claims, according to news reports.
Disparate impact is a type of claim where an apparently neutral policy unintentionally disadvantages protected groups. In the past, the EEOC has used the disparate impact theory to investigate certain hiring policies, such as criminal background checks and pre-employment tests, that may disproportionately impact those groups.
More recently, the concept has expanded to focus on artificial intelligence (AI) hiring tools, which may unintentionally show an algorithmic bias toward certain groups.
What Employers Need to Know
Even though the EEOC has deprioritized these investigations, workers can still file disparate impact complaints privately in federal court. At this point, it’s a good idea to remain informed and proactive by taking these actions:
- Review policies: Audit your hiring and workplace policies for potential disparate impact. In particular, review your screening program to make sure you’re handling background checks consistently and in compliance with all federal requirements.
- Stay informed: Keep up-to-date on state and local regulations regarding background checks. These can vary by jurisdiction and may include additional requirements.
- Train HR staff: Provide training to HR and recruiting teams on identifying and avoiding practices that may lead to disparate impact.
Massachusetts: New Pay Transparency Law Takes Effect in October
Massachusetts will soon become the latest state to require pay transparency in job postings.
The state’s new law, known as An Act Relative to Salary Range Transparency, will take effect on Oct. 29. It requires businesses with 25 or more employees in Massachusetts to disclose salary ranges to both job candidates and current employees.
Under the law, employers must include salary ranges in job postings and provide the same information to employees upon request.
What Massachusetts Employers Need to Know
Before the end of the month, take some time to familiarize yourself with the new law. The state attorney general’s office has released guidance for employers, including answers to some frequently asked questions.
Your organization can also take these steps before the law goes into effect:
- Review compensation structures: Now that salary information will be publicly available, review your compensation structures to determine whether they’re aligned with industry benchmarks.
- Update job postings: Make sure all new job postings, including those on third-party sites and through recruiters, include the required salary information.
- Create internal policies: Document the procedure for handling pay range disclosures and decide how to respond to requests for salary information.
- Train HR and hiring managers: In the next few weeks, train the HR team and all hiring managers on the new practices and the importance of salary transparency moving forward.
Washington: Court Ruling Expands Potential Liability for Employers
A recent court ruling in Washington state clarified who can pursue statutory damages for job postings without the required pay information.
In Branson v. Washington Fine Wine & Spirits, LLC, the Washington Supreme Court ruled that job applicants do not need to prove they applied in “good faith” to seek damages under the state’s Equal Pay and Opportunities Act.
The decision means anyone who applies to a job posting in Washington can file a lawsuit if the employer doesn’t provide the required information, which includes:
- The wage scale, salary range, or fixed wage amount
- A general description of benefits
- Other compensation the role may receive
Recently, the state amended the law to give employers five business days to correct postings without this information before an applicant can seek damages.
What Washington Employers Need to Know
Even with the new five-day leniency period, Washington employers should take some proactive steps to avoid noncompliance with the pay transparency law. These steps include:
- Review job postings: Check your active and upcoming job postings to make sure they meet the pay transparency requirements.
- Develop internal response processes: Decide who will be responsible for addressing claims of noncompliance and how they should respond.
- Maintain documentation: Keep copies of job postings and document all efforts to resolve compliance issues during the five-day period.
Colorado: Job Posting Requirements Under Renewed Scrutiny
Since 2021, Colorado has required employers to follow a law designed to promote pay equity and salary transparency. While the Equal Pay for Equal Work Act isn’t new, recent reports suggest there’s been an increase in enforcement, making it a good time for Colorado businesses to review their compliance practices.
As a reminder, the law requires Colorado employers to include the following information in all internal and public job postings:
- Compensation, including the salary or hourly range
- Employment benefits
- Application instructions, including how and when to apply
What Colorado Employers Need to Know
According to the Colorado Department of Labor and Employment (CDLE), over 2,300 pay transparency complaints have been filed since January 2021, when the law went into effect. To prevent your business from receiving a fine or citation, take these steps:
- Review job postings: Make sure all current and future job postings include the required information about salary, benefits, and how to apply.
- Provide ongoing training for HR staff: Hold regular training sessions with HR personnel on the law’s requirements and compliance processes.
- Monitor compliance: Develop a system for monitoring compliance and take quick action when needed to align with pay transparency requirements.
Get the Compliance Updates You Need with InCheck
Recent EEOC updates and changing state pay transparency laws can impact how you hire and screen candidates. By staying informed, you can help your organization manage risk and remain compliant.
At InCheck, we offer expert guidance to keep your hiring processes fair, transparent, and in line with current requirements. Contact us today for more information about building compliant background screening practices to protect your organization.