What Do Rhode Island’s Employers Need to Know About New Pay Equity Requirements?

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What Do Rhode Island’s Employers Need to Know About New Pay Equity Requirements

The Governor of Rhode Island, Daniel McKee, has signed the state’s expansive new pay equity act into law. This leaves employers until January 1, 2023, to ensure compliance with the new standards. Despite the time this allows to put off the significant compliance effort this legislation requires, it is wise to start now in order to ensure your organization is ready when the law takes effect. In order to get started, there are a few things you should know about this new legislation.

Employer Obligations

Employers are forbidden from compensating an employee of a given race, age, gender or gender identity, religion, sexual orientation, country of origin, or disabilities differently from employees who perform comparable duties with other protected characteristics.

This includes all forms of compensation, excluding tips and pay for overtime. The definition for comparable work means all work that, when judged in its entirety, requires similar working conditions as well as similar levels of skill, responsibility, and effort. Minor differences in any of these factors should be disregarded.

The only factors that may be considered for the level of compensation to those with a substantially similar job are:

  • A Seniority System
  • A Merit System
  • A System for Judging Compensation on Quality or Quantity of Work
  • Different Rates for Shifts
  • Geographic Locations
  • Work Travel
  • Applicable Differences in Job Related Education, Training, or Experience

Other reasonable job-related factors may be considered as long as they do not involve membership in any of the aforementioned protected classes. Keep in mind as well that an employee’s compensation may not be reduced in order to meet the act’s requirements. Additionally, employees are not permitted to agree to receive less compensation than the act provides for. An employee’s wage history cannot be used as justification for an unlawful difference in compensation and may only be used for compensation decisions if the information was freely provided by an employee and would not create an unlawful difference in compensation within the organization.

Employers must also provide wage ranges for all positions upon request, and when an employee transfers position within the company, it must be provided for the new position even without a request. All employers are required to post a notice of the rights granted by this act, which will be published by the Rhode Island Department of Labor and Training in a conspicuous location. Failure to comply with posting requirements is punishable by a civil penalty of between $100 to $500. 

Steps for Employers to Take

Employers should begin performing “self-evaluations” in order to identify and remove any unlawful pay practices. To do this, employers may use a sheet issued by RIDLT or one of their own creation. Once identified, employers must be capable of showing that they eliminated any unlawful differences in pay that the evaluation revealed. 

This crucial step, as long as it is performed in “good faith,” will allow employers an affirmative defense for liability arising from unlawful pay practice allegations through June 30, 2026. After this date, employers who take this step will be shielded from compensatory and liquidated damages, as well as civil penalties but not unpaired wages or equitable relief.

Damages for violations can range widely and increase with recklessness, malice, and repeat violations. So, it is important to take these steps quickly to ensure compliance before the Act takes effect.