Pay Transparency Laws Fall Short on Enforcement, Disclosure Scope

Washington, D.C. joined several states in passing wage transparency laws going into effect this year or next. This legislative action is a step in the right direction, but these laws should be strengthened to have a significant impact on gender and racial pay inequities.

Washington, D.C.’s new wage transparency law became effective June 30 and requires private sector employers in the District to disclose the minimum and maximum salary the employer will pay for an advertised job listing and the health-care benefits that employees may receive.

The law also prohibits private sector employers from screening prospective employees based on their wage history. Notably, government employers aren’t subject to it.

The wage transparency law doesn’t contain a private right of action. This means individuals can’t file a lawsuit against an employer even if the employer violates the law. However, D.C.’s attorney general may sue on behalf of an individual or the public at large. Additionally, employers can face civil fines up to $20,000 per violation for repeated violations.

Washington, D.C. joins several states, including California, Colorado, Maryland, and New York, that have enacted similar legislation. Illinois, Minnesota, and Vermont also passed similar pay transparency laws, which will become effective by July 1, 2025. At the federal level, a bill introduced in 2023 hasn’t made any meaningful movement since it was referred to committee.

Pay Inequity

One significant purpose of pay transparency laws is to equip employees with the knowledge they need to investigate—and hopefully, remediate—pay inequity. Racial and gender pay disparities persist in the US. Specifically, Black, Latine, and Indigenous workers, on average, earn less money than White workers—even when controlling for factors such as education levels and geographic location. Women, especially Black, Latine, and Indigenous women, earn less than men, including men of the same race.

Although racial and gender pay disparities are well-documented, rectifying these disparities has proven difficult. Part of the difficulty is that, while discriminatory pay gaps are understood at the macro-level, they are often difficult to establish in individual circumstances or at the micro-level. For example, a Black woman who suspects that her non-Black co-workers are earning more money than her, even though they are performing the same duties, may not have tangible proof of the disparity—especially if her co-workers don’t voluntarily share their salary information.

Historically, asking others about their salary or wages was considered ill-mannered and off limits. Yet, such secrecy tends to only benefit employers and the people who have traditionally benefited from pay inequity—e.g., White men. With pay transparency, however, knowledge is power. Employees who have been forced to endure income inequality, especially Black, Latine, and Indigenous women, can more readily obtain the information they need to assess whether they are being paid fairly.

Shortcomings

Although wage transparency laws help address pay inequity, they contain some fundamental flaws. For example, employers aren’t required to disclose the salary information of current employees or demographic information, which is relevant to whether an individual is being paid fairly.

In Washington, D.C., employers are only required to disclose a salary range based on the employer’s “good faith” belief of what the employer is willing to pay. Arguably, relying on an organization’s “good faith” isn’t the most prudent method because employers can easily skew salary ranges.

In other jurisdictions, for example, employers have been found to advertise wide, unrealistic salary ranges for job listings—some showing a differential of more than $100,000 between the minimum and maximum salary that the employer will supposedly pay.

Also, lack of private right of action inherently weakens the law because individuals can’t readily take their claims to court when their rights have been violated. In jurisdictions like Washington, D.C., individuals must rely on the government to do it for them.

Additional Measures

To remediate some of the shortcomings of Washington, D.C.’s wage transparency law, it should be amended to contain a private right of action so that individuals can prosecute violations instead of relying on D.C.’s attorney general to bring a claim. Washington, D.C. should also implement a requirement that, in addition to disclosing the minimum and maximum salary the employer will pay for an open position, employers must also provide annual disclosures of the actual salary ranges for all positions, including occupied positions.

Even with these changes, closing the race and gender wage gaps largely depends on the commitment of individual decision-makers. As historian Ibram X. Kendi explained in his book, “How to Be an Antiracist,” individuals must consciously commit to making equitable decisions and must actively oppose discriminatory ideas and policies.

Nevertheless, when decision-makers fall short of these ideals, wage transparency laws must have enough force to ensure individuals have sufficient recourse to effectuate them. Washington, D.C.’s version moves the issue forward, but it must be strengthened by creating a private right of action and imposing additional disclosure requirements.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Sacred B. Huff is an associate with Kalijarvi, Chuzi, Newman & Fitch in Washington who focuses her practice on claims of employment discrimination, retaliation, failure to provide reasonable accommodations, wage and hour violations, and claims under the Family and Medical Leave Act.

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