On July 3, 2023, Governor Josh Green signed SB1057 SD2 HD2 CD1 into law as Act 203. Hawaii Employers Council has been tracking this bill as it will have significant impacts on how Hawaii employers pay their employees. Act 203 aims to reduce pay inequalities in the workplace by requiring job listings to disclose hourly rates or salary ranges and by prohibiting employers from paying lower wages to employees based on any protected category.
Hawaii law already requires equal pay and prohibits pay discrimination based on sex, and promotes pay transparency by allowing employees to discuss their own or other employees’ wages. HRS §378-2.3.
Act 203 becomes effective Monday, January 1, 2024, and amends Hawaii’s equal pay law to prohibit employers from discriminating between employees because of any protected category established under state law, by paying wages to employees at a rate less than wages to other employees for substantially similar work. Unfortunately, there has been no guidance as to how “substantially similar work” should be interpreted.
The new law will also require almost all job listings to include “an hourly rate or salary range that reasonably reflects the actual expected compensation,” with the following exclusions: (1) positions that are internal transfers or promotions within a current employer; (2) public employee positions for which salary, benefits, or other compensation are determined pursuant to collective bargaining; or (3) positions with small employers having fewer than fifty employees.
Act 203 does not alter the Hawaii Equal Pay Act’s allowance for pay differentials resulting from a:
- Seniority System;
- Merit System;
- System that measures earnings by quantity or quality;
- Bona fide occupational qualification; or
- Differential based on any permissible factor other than a protected classification.
Employers whose pay structure is not clearly based on the above five factors, should consider auditing their pay practices and taking appropriate corrective action to eliminate any impermissible differences in pay.
HEC members may contact their HR Consultant to discuss recruitment and retention strategies, or for more information about how our team can assist with strategic compensation initiatives.