Relief from Steep Pay Transparency Penalties for Businesses in Washington State

In welcome news for the business community and a shining example of bipartisan cooperation, the Washington State Legislature has almost unanimously passed an amendment to its pay transparency law that led to hundreds of class action lawsuits. Numerous employers are still facing millions of dollars in potential liability through these lawsuits. But, for at least the next two years, employers will have a limited five-day correction window to fix job postings that are missing the required pay and benefits information. The amendment awaits the governor’s signature with an expected effective date in summer 2025.

Pay transparency has been part of Washington’s Equal Pay & Opportunities Act (EPOA) in some form since its passage in 2018, but it has evolved through several amendments over the years to include more specific requirements. Most significantly, since January 1, 2023, employers have been required to include in all job postings the pay range and general description of benefits and other compensation with the goal of providing full disclosure to applicants and employees. The new amendment does not change these requirements but will help businesses comply with the intent of the law.

In response to the business community’s concerns about the new law,¹  the legislature included the following provisions in the amendment:

• Correction Period: From the amendment’s effective date through July 27, 2027, employers must be given an opportunity to correct postings that do not include the required information. Any person may provide written notice of non-compliance, and the employer will have five business days to make corrections before penalties can be imposed.

Tip: The law does not specify how notice will be given. It is hoped the Department of Labor & Industries (L&I) will provide clarity on this point. Because of the short window for correction, it will be essential that notice gets to the right contact person(s) to make immediate changes. Employers should consider establishing an email address for accepting notice and including this contact information in their standard job posting language and on their career website.

• Fixed Wage Amount: L&I had previously taken a strict position that a pay range was required, even if the employer was only offering a fixed amount for the job. The amendment clarifies that employers should disclose the fixed wage amount for the job opening if they are not offering a pay range.
• Unauthorized Third-Party Postings: The statute provides that employers are responsible for recruitment done “indirectly through a third party.” The amendment clarifies that employers are not liable for unauthorized third-party job postings. The amendment also specifies that employers will not be liable for penalties if they contact applicable third-party entities with a demand to correct postings on their sites.

Tip: As part of their auditing and correction process, employers should consider providing written notice to third parties with a demand to correct their postings and retain proof of the notice. This will be particularly important where employers affirmatively use third-party services beyond their career websites.

• Discretionary Statutory Damages: Plaintiffs in the pay transparency lawsuits are arguing that they are entitled to $5,000 in statutory damages per applicant to a non-compliant posting, plus attorneys’ fees and costs. The amendment clarifies that any statutory damages will range from $100 to $5,000 per violation, with a direction to the courts and L&I to consider appropriate factors in setting the penalty amount.

How the amendment will impact pending lawsuits remains to be seen, but at a minimum, the relief going forward will be substantial for businesses that take this opportunity to improve their practices.

Employers can conduct a thorough review of their job postings and implement an auditing system to ensure they disclose the correct pay and benefits information in every posting. Although Washington has seen the most litigation and has some of the most detailed pay transparency requirements, other laws in approximately 21 states and local jurisdictions must be considered for nationwide compliance.