JDSUPRA — Washington employers face a deluge of class actions alleging violations of the state’s Equal Pay and Opportunity Act (EPOA). Law firm Emery Reddy PLLC has filed 31 lawsuits since June, the majority in the last few weeks. Legislation came into force on January 1, 2023.
High profile companies feature among those targeted by plaintiffs. These include Adidas AG, Home Depot Inc, Marriott International Inc, Safeway owner Albertsons Companies Inc, and Burberry Group plc. Smaller organizations also face litigation.
Each lawsuit alleges violations of pay transparency laws, centered primarily on the failure of employers to disclose wage information or salary ranges in job listings. Potential remedies include reinstatement, injunctive relief, and civil monetary damages.
Pay transparency laws in Washington State
In three decades, Washington has struggled to make any progress towards closing its gender pay gap. 2021 figures show that women in the state earned on average just 64.4% of their male colleagues’ earnings. That’s a fall from 70% in 1992, but Black, Hispanic, and Indigenous people face an even bigger pay gap.
Legislation is aimed at addressing that gap before it becomes a chasm.
Key pay transparency requirements required under the EPOA include:
- Every employer with 15 or more employees, and has at least one Washington-based employee, must comply. That includes employers that do not have a physical presence in WA.
- Washington employers cannot avoid compliance by refusing to consider Washington-based job applicants.
- Job postings must include the opening wage scale or salary range, and a general description of all benefits and additional compensation offered.
- Open wage scales or salary ranges must clearly specify the lowest to highest salary for the post. Washington Department of Labor and Industry (L&I) guidance provides examples for employer clarity.
- Salary and benefits information is not required in generic adverts, such as “help wanted” or “manufacturing jobs available.”
Emery Reddy files 31 class action lawsuits
A Seattle Times article reports that, of the 31 lawsuits filed, 17 allege the job postings did not disclose a salary range. The remainder accuse companies of failing to include wage information, as well as a description of the general benefits and other compensation available.
As most cases have only recently been filed, it is impossible to predict the outcome, but more are expected. At least 224 further complaints have been received by Washington’s Department of Labor and Industry.
The Seattle Times notes that when L&I investigates a complaint, attempts to resolve it are made by educating the employer. If an agreement is not reached, a fine may be issued, or the employer ordered to pay damages. Neither of those steps has yet been taken.
Bloomberg Law observes that the outcome will be affected by whether the courts affirm class status. The complaints claim to cover “dozens or hundreds” of class members each. Those numbers include people who applied for jobs advertised without salary or wage information.
Additional points for employers to consider include:
- Washington’s pay transparency statute states that job applicants and employees can recover damages for noncompliant job listings.
- Applicants are defined as “All applicants, including existing employees, who apply to a posting recruiting Washington-based employees,” according to L&I guidance.
Destinee Moliga vs Qdoba Restaurant Corporation
An earlier case, filed by Emery Reddy in June 2023 against Qdoba Restaurant Corporation, has been removed to federal court. The case centers on whether the plaintiff is “a job applicant or an employee” and has standing to bring such a lawsuit.
Further proceedings have been stayed while mediation is pursued by Qdoba and the plaintiff. The lawsuit alleges that Qdoba failed to list the wage scale or salary range and a general description of benefits and other compensation its job postings.
Destinee Moliga is the plaintiff in four lawsuits. An additional three lawsuits have been filed in October against Home Depot, Marriott, and Ginsing LLC, according to the Seattle Times.
Pay transparency expands across the US
Eight states have enacted pay transparency laws.
Only Washington and California legislation allows for private right of action by individuals, but California’s SB1162 lacks statutory damages. Washington state statutes allow plaintiffs to recover “statutory damages equal to the actual damages or five thousand dollars, whichever is greater,” plus costs and reasonable attorneys’ fees.
Further pay transparency laws take effect in Hawaii from January 1, 2024, and Illinois from January 1, 2025. More states are expected to introduce similar laws. Massachusetts moved a step closer to introducing legislation in October. National salary transparency bill HR1599 is also pending.
Navigating pay transparency legislation is a challenge in a complex regulatory landscape. But the deluge of lawsuits faced by Washington employers reiterates the urgent need for employers to review pay equity practices.
Strategies for compliance with Washington’s EOPA
Carry out a pay equity audit: A pay equity audit identifies pay disparities in your compensation structure. Trusaic PayParity conducts an intersectional pay equity audit to identify processes that may result in pay disparities, such as unconscious bias. The results also pinpoint areas for remediation and pay gaps within every employee group.
Identify the root causes of pay gaps: Do all employees have equal access to jobs and promotions, for example? Recruiting and hiring policies must be equal and consistent for all employees and job applicants.
Review your job posts to ensure compliance: For many companies, this might mean going back to the basics of analyzing salary ranges and compensation to justify each element. For larger companies operating across multiple jurisdictions this is an essential first step in assessing your potential for liability.
Enjoy the benefits of pay transparency: Pay transparency is included in a majority of US job postings, with more to come as new laws take effect. A ZipRecruiter survey found that three-quarters of employers agree pay transparency attracts more applicants to job posts. Productivity, employee engagement and retention are more of the benefits offered by pay transparency.
