Closing the Gender Pay Gap: State and Local Legislative Efforts Underway to Increase Wage Equity

By Rich Ehisen

A January 2022 report from the National Partnership for Women & Families found that women in the United States are paid 83 cents for every dollar paid to men, amounting to an annual gender wage gap of $10,435 on the median pay for full-time workers.

The gap is even more pronounced for women of color, with Black women earning 64 cents on the dollar, Latinas just 57 cents, and Asian American and Pacific Islander women just 52 cents. Moreover, the wage gap persists regardless of industry, within various occupations and across all education levels.

Legislators at the state and local levels have sought to tackle this gender pay gap by proposing new approaches that emphasize increased employer disclosures of what they are willing to pay new workers.

For example, Michigan, Maine, Hawaii, Vermont and Minnesota are among the states that have enacted laws barring employers from preventing employees from sharing their salary information — or from retaliating against them if they discuss their pay package with co-workers.

Other states such as Nevada, Alabama, Washington, Maryland and Oregon have adopted laws and regulations that prohibit employers from requesting salary information from job applicants.

But the legislative spotlight on gender pay equity has ratcheted up to new heights in three particular jurisdictions:

California

The first sweeping state law to be passed in this recent flurry of activity took place in California back in 2015. Authored by Former State Sen. Hannah-Beth Jackson, the California Fair Pay Act amended state law to eliminate loopholes that had been used for decades by employers to justify inequalities in gender pay by creating a new standard of “equal pay for substantially similar work.” Then in 2021, California became the first state to require companies with 100 or more employees to report wage data by race and gender across 11 pay bands. The goal is to reduce gender pay gaps and make it easier to enforce equal pay laws already on the books.

New York City

The New York City Council approved an ordinance in December 2021 that requires employers in the nation’s largest city to list minimum and maximum salaries on all job openings in New York City. The law, which applies to any employer with four or more employees, goes into effect in May 2022. The New York City law goes above and beyond the State of New York’s Pay Equity Law, which was adopted in 2019 and applied the “substantially similar work” standard to equal pay requirements in the state.

Colorado

Another landmark piece of state legislation on gender pay equity was Colorado’s 2019 Equal Pay for Equal Work Act, which went into effect at the beginning of 2021. The law requires employers to post the compensation range and a general description of all employment benefits in their job postings and prohibits employers from paying any employee a wage rate that is less than the rate paid to an employee of a different sex for substantially similar work (absent legally justified reasons). The law imposes fines of up to $10,000 per violation.

With new laws now on the books in various state and local jurisdictions, gender pay equity advocates are now looking down the road to the next phase of activity. For example, two possible approaches that advocates are exploring now:

(1) Include all forms of compensation (e.g., bonuses, stock awards, etc.) in the calculation of how employees are paid for purposes of pay equity assessments; and

(2) Require annual conversations with employees to evaluate compensation and discuss the factors determining their pay.

Legislative activity on gender pay equity is likely to heat up in state and local jurisdictions nationwide, so it is critical for company executives to stay apprised of the latest legislative and regulatory developments. The LexisNexis State Net service recently hosted a webinar and published a white paper on this emerging topic, which served as the basis for this blog post, and has made it available for free download.

State Net offers government affairs and compliance professionals a comprehensive data source and analytical tools to monitor government activity from beginning to end for the federal government, all states, territories, localities and the District of Columbia. Learn more about how State Net monitors legislative activity in all 50 states to keep executives updated on individual bills as they progress through committee, as well as new laws that are enacted in each jurisdiction.