Legal Alert: New Wage Transparency Requirements for DC Employers

Starting June 30, 2024, many District of Columbia employers will have new obligations related to compensation of prospective employees. With the Wage Transparency Omnibus Amendment Act of 2023 (the Act), DC joins California, Colorado, Washington, and other states in a growing trend towards disclosing projected pay to applicants. These laws aim to reduce wage gaps.

Applicability

The Act’s requirements apply to any individual, firm, association, or corporation that employs one or more employees in DC, other than the federal or DC government. Therefore, any employer in the DC with an employee, even a single part-time employee, must comply with the Act. The Act’s provisions only apply to employees or prospective employees; employers advertising for or engaging properly classified independent contractors for work are not bound by the Act in their interactions.

Employer Restrictions and Obligations

Under the Act, an employer may not screen prospective employees based on their wage history meeting minimum or maximum criteria, or by requesting as a condition of interviewing or being considered for an offer of employment that a prospective employee disclose their wage history. An employer may also not reach out to previous employers of the prospective employee for wage history information.

Here, wage history includes all forms of monetary and non-monetary compensation or benefits to an employee in exchange for the employee’s services to the employer. This should be broadly interpreted to include bonuses, commissions, healthcare benefits, retirement benefits or matches, stock options, and more.

The Act also requires employers to provide certain information early in the process of advertising and interviewing potential employees. Employers must provide expected minimum and maximum pay for all job descriptions and postings. This applies to new positions, vacant positions, promotions, and transfers. Employers may no longer exclude all compensation information or merely include statements to the effect of “compensation will be commensurate with experience.” Further, prior to a first interview, the employer must inform the prospective employee of healthcare benefits.

Notice Requirement

Employers are required to post a notice informing employees of their rights under the Act. The notice poster, which should be placed in the same location as other required labor-related notices, has not yet been released by the DC Department of Employment Services. If no poster is released by June 30, 2024, employers should create and post their own notice satisfying the Act’s requirements.

Existing Obligations

As a reminder, employers have existing obligations under DC law related to employee wage and compensation transparency and disclosure. First, employers may not prohibit employees from inquiring about, disclosing, comparing, or otherwise discussing the employee’s compensation or compensation of another employee. Further, employers may not retaliate against an employee for inquiring about, disclosing, comparing, or otherwise discussing compensation or being believed to do so.

Penalties for Noncompliance

Employees have no right under the Act to sue an employer, but employers failing to comply with the Act are subject to legal action and financial penalties. The attorney general of DC may investigate violations of the Act and initiate civil actions against employers for violations. The attorney general may also seek injunctive, compensatory, or other relief “for any individual or for the public at large.” In an action brought by the attorney general’s office, they can recover attorneys’ fees and costs, as well as statutory penalties, if they prevail. Separately, noncompliant employers are subject to civil fines of $1,000 for the first violation, $5,000 for the second violation, and $20,000 for each subsequent violation of the Act.

Additional information for nonprofits and small businesses is available at the D.C. Bar Pro Bono Center’s resource website: www.lawhelp.org/dc/NPSB.

If you have questions, feel free to contact us at npsb@dcbar.org.

© D.C. Bar Pro Bono Center 2024

This communication is provided by the D.C. Bar Pro Bono Center solely for informational purposes, without any representation that it is accurate or complete. It does not constitute legal advice and should not be construed as such. It does not create an attorney-client relationship between the recipient and any other person, or an offer to create such a relationship. This communication contains information that is based, in whole or in part, on the laws of the District of Columbia and is current as of the date it is written. However, laws vary from state to state and may change from time to time. As a result, the information may not be appropriate for anyone operating outside the District of Columbia and may no longer be timely. Consult an attorney if you have questions regarding the contents of this communication.