Washington State Clarifies New Requirement to List Compensation and Benefits in Job Postings

The Washington State Department of Labor and Industries (L&I) provided much-anticipated guidance on Washington’s new job posting requirements. Effective January 1, 2023, employers in Washington must include pay ranges and a general description of benefits and other compensation in all job postings.

BACKGROUND

Since July 28, 2019, Washington has required employers to, upon request and post-offer (1) provide external job applicants with the minimum wage or salary for the position and (2) provide internal job applicants with the wage scale or salary range for the new position. See HB 1696.

Joining a wave of legislation in Colorado, New York City, and California, SB 5761 now requires employers with 15 or more employees to include in each job posting (1) the wage scale or salary range, (2) a general description of all benefits, and (3) a general description of other compensation to be offered to the hired applicant. RCW 49.58.110.

RCW 49.58.110(1) defines a “posting” as “any solicitation intended to recruit job applicants for a specific available position, including recruitment done directly by an employer or indirectly through a third party, and includes any postings done electronically, or with a printed hard copy, that includes qualifications for desired applicants.”

A job applicant or an employee may either file a complaint with L&I or file a civil action for actual damages, statutory damages equal to actual damages, or $5,000 (whichever is greater), interest, costs, attorney’s fees, injunctive relief, and reinstatement. If L&I finds that an employer violated this section, it may also order a civil penalty of up to $500 for the first violation and up to $1,000 or 10% of damages (whichever is greater) for a subsequent violation.

WHAT’S NEW

On November 30, 2022—with just one month remaining before SB 5761 goes into effect—L&I issued Administrative Policy ES.E.1 (ES.E.1), which addresses many of the open questions regarding compliance with the new job posting requirement. This policy reflects L&I’s guidance in the interpretation and application of the law. The below summarizes L&I’s guidance.

Covered Employers

Employers are covered by the job posting requirement if they (1) have 15 or more employees worldwide and (2) engage in any business, industry, profession, or activity in Washington. RCW 49.58.010(5), RCW 49.58.110(3), ES.E.1(3).

Notably, the law applies to any employer who conducts business activity in Washington, regardless of whether the company has any employees in Washington or any physical presence in Washington.

Covered Job Postings

This law only applies to postings that include qualifications for the specific position. Qualifications include, but are not limited to, specific knowledge, skills, or abilities.

For example, the following examples would not be considered covered “job postings” because they do not list qualifications and/or the specific position:

• A window sign that reads, “Help wanted.”
• A window sign that reads, “Help wanted. Part-time receptionist. Experience needed.”
• A website banner that reads, “Hiring now—All jobs. Food handler’s permit required.”
• A social media post that reads, “Warehouse jobs available; apply now online. Weekend shifts required.”
• An electronic reader board outside of a business that reads, “Help wanted—Server. Offering minimum wage plus tips.”

By contrast, the following examples are considered covered “job postings”:

• An electronic reader board outside of a business that reads, “Help wanted—Server. Food handler’s certification needed. Offering $24.00–$26.00 per hour, medical benefits, 70 vacation hours per year, and $500 sign-on bonus.”
• A social media post that reads, “Seeking applicants for a billing specialist position. Must have two years of medical bill processing experience. $30.00–$40.00 per hour, medical, vision, and dental benefits, 401k retirement plan, and stock options available. More information can be found via hyperlink here.”
• An online job board posting that reads, “We are looking for a qualified applicant who has experience with use of spreadsheets and database software for a data analyst role. Salary range is $60,000–$80,000 per year. Medical, vision, dental benefits, tuition reimbursements, and stock options available for the hired applicant. More information can be found via hyperlink here.”

Remote Jobs

A posting for a remote role must comply with Washington law if the position could be performed by a Washington-based employee. Employers cannot avoid coverage by excluding Washington applicants—e.g., “Washington applicants need not apply.”

Whether an employee is a “Washington-based employee” depends on a variety of fact-specific factors, including, for example, the employee’s residence and base of operations. L&I Administrative Policy ES.A.13: Minimum Wage Act – Washington-Based Employee (5/22/2019).

A “Washington-based employee” could potentially include employees who live outside of Washington and/or work outside of Washington.

There is a narrow exception to the posting requirement for jobs that are to be performed entirely outside of Washington. For example, the out-of-state exception would apply to jobs tied to worksites physically located entirely outside of Washington such as waitstaff at restaurant locations in other states.

Covered Applicants

All applicants, including existing employees, who apply to a post recruiting Washington-based employees with a covered employer are covered by the law.

Listed Wage Scale or Salary Range

All covered job postings must include the employer’s “most reasonable and genuinely expected” wage scale or salary range for the job. The range must include the lowest to the highest pay established prior to posting. For example, it is non-compliant to post “$60,000 per year and up” or “up to $29/hour.”

If the wage scale or salary range changes after the posting has been published, the employer must update the posting to reflect the updated wage scale or salary range.

Probationary Period: If an employer intends to provide lower pay for a probationary period or other initial timeframe, the job posting must list both the starting pay range/rate and the entire scale or range. For example, a compliant posting could state, “New hires start between $60,000 and $65,000 per year, but the entire salary range is $60,000-$70,000 per year. The hired applicant will be offered pay within the entire range based on qualifications and professional experience.”

Job Opening for Various Job Titles: If an employer has a job opening that could be filled with various job titles, depending on experience, the employer must list all potential wage scales or salary ranges—for example:

• Software Engineer I: $70k-$90k per year
• Software Engineer II: $75k-$100k per year
• Software Engineer III: $80k-$120k per year

Commissions: If the job is compensated by commission, the job posting should include the commission rate or rate range (percentage or otherwise) that would be offered to the hired applicant—for example, “5-8% of net sale price per unit.”

Piece Rate: If the job is compensated by piece rate, the job posting should include the piece rate or wage scale plus piece rate—for example, “$0.55-$0.75 per pound of strawberries picked.” If the job is compensated by the greater of a piece rate or hourly rate, the job posting should include the piece rate or wage scale and the hourly rate—for example, “The greater of $0.75 per pound of strawberries picked or $19 per hour.”

General Description of All Benefits

All covered job postings must include a general description of all benefits offered for the specific available position, which includes, but is not limited to, healthcare benefits, retirement benefits, any benefits permitting paid days off (including more generous paid sick leave accruals, parental leave, and paid time off or vacation benefits), and any other benefits that must be reported for federal tax purposes, such as fringe benefits. If the general description of benefits changes after a posting has been published, the job posting must be updated.

Insurance: Each specific type of insurance offered must be listed in the job posting. For example, “Employees (and their families) are covered by medical, dental, vision, and basic life insurance.”

Retirement Plans: Each retirement plan option offered must be listed in the job posting. For example, “Employees are able to enroll in the Company’s 401(k) plan or deferred compensation plan.”

Paid Time Off or Vacation: If an employer offers PTO or vacation, the job posting must include the specific number of days or hours the hired applicant would expect to receive. For example, “Employees will also receive eight hours of vacation leave every month.”

Paid Holidays: If an employer offers paid holidays, the job posting must include the specific number of paid holidays the hired applicant would expect to receive. For example, “Employees will also receive 10 paid holidays.”

More Generous Paid Sick Leave: If an employer offers paid sick leave that is more generous than that provided by Washington state or local law, the job posting must list the number of hours or days the hired applicant would expect to receive. For example, “Employees will receive three hours of paid sick leave for every 40 hours worked.”

General Description of Other Compensation

All covered job postings must include a general description of all other compensation to be offered to the hired applicant in addition to their salary range or wage scale. “Other compensation” includes, but is not limited to, bonuses, commissions, profit-sharing, or stock options. For example, “Hired applicant will be able to purchase company stock, receive annual bonuses, and can participate in profit-sharing.”

Linked Benefits and Compensation Information

Instead of including benefits and other compensation details on the posting itself, an electronic job posting may include a link to a more detailed description.

ANALYSIS

Although L&I’s guidance answers some open questions, several important issues still remain unanswered:

• When are employers subject to this law if they do not have any Washington employees or a physical presence in Washington? What amount of activity qualifies as being engaged in a business, industry, profession, or activity in Washington?
• For employees who earn commissions in addition to a base salary, must employers list the specific commissions rate or rate range?
• Would the job posting requirement apply to a company employee who posts, without company authorization, in their internal social media network? For example, would it apply if an employee posts, “We’re looking for coders fluent in JavaScript! DM me with questions.”

NEXT STEPS

Employers should consider taking steps now to comply with the new law, including the following:

• Determining whether the company engages in a business or other activity in Washington.
• Determining the salary ranges for all currently posted positions that could be filled by a Washington-based applicant.
• Reviewing existing job posting templates or creating new templates to use after January 1, 2023.
• Training supervisors, managers, compliance personnel, human resources, and legal professionals on the implications of the new law—including with respect to appropriate communications with internal and external applicants.
• Conducting a privileged pay equity audit (either for certain positions in Washington or a broader review of current pay) because salary information provided in external job postings will become public on January 1, 2023.
• Monitoring for additional rulemaking and guidance from L&I on the implementation of the new law.