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November 2022

Evaluating the Risks and Benefits of Remote Workers

In the post-pandemic world, swathes of employees fled the office to work remotely. Employers realized that they were no longer limited to hiring by geography and cast a wider net for workers. While there are some clear benefits to opening the talent pool beyond physical geographical office locations, these remote job postings also carry risk to employers. Employers are often well versed in the law of the states where they operate – but are less likely to be familiar with laws in states where they do not. Failure to comply with other states rules creates exposure for employers. One such area is compliance with the new requirements for job postings with salary ranges.

Recently Colorado[1] and New York City[2] implemented laws mandating a salary range on job postings. California[3], New York,[4] and Washington[5] have similar laws about to take effect. These statutes are intended to make the job application process more transparent to prospective employees and to ensure that employers cannot deflate wages. And other jurisdictions, such as Nevada[6], mandate that employers provide information about salary upon request, at an interview, or when an offer is made.

If an employer posts an opening without including a salary range (in any of these jurisdictions or for a remote role that could be in any of those jurisdictions), they could be in violation of one or more of these laws and face penalties in some or even all these jurisdictions. These laws can impact employers with as little as 4 employees and even if the employer is not based in the state in question.

In addition, employers who exclude remote employees from these states will run afoul of these requirements as some explicitly prohibit such practices.

Further, these new job-posting transparency laws may impact current employees as well. Many of these laws also mandate that employers provide notice of promotional opportunities, including salary, to current employees when postings are made.

Before employers decide to get creative with their workarounds, consider the following scenario: an Oregon company has a new role. The company decides that they can hire someone for the position who is not local and in order to get a larger crop of applicants, they decide to open the role to remote talent. However, the company does not want to post a salary range as it is concerned that doing so might force it to pay more than it might otherwise have to. The company knows that Colorado and New York City have current disclosure requirements so when they post the role, the job posting specifies that the position is not open to Colorado or New York City residents.

Creative? Yes. Legal? No. The disclosure requirements of these jurisdictions apply to any job posting that could be performed by a resident. Colorado law even notes that employers cannot avoid liability under their salary transparency regulations by posting that they will not accept Colorado applicants. This posting would violate the Colorado law.

One discouraging trend we have seen since the Colorado law went into effect, which was the first of all disclosure laws, is employers failing to list the salary range but inviting interested Colorado applicants to call or email the prospective employer to obtain the salary information. While a seemingly clever workaround, this behavior violates both the letter and the spirit of these laws. The information must be included in the job postings – employers cannot force applicants to jump through hoops to get this information.

Further, disclosure laws go beyond the job posting itself. Consider the following scenario: a Massachusetts company posts a position for a remote role. Among the applicants are two candidates that reside in Rhode Island. The first candidate sends an email requesting a job salary. The company does not respond to the request, and does not interview nor offer the position to this candidate. The second Rhode Island applicant is interviewed and offered the position. The offer includes the salary but does not provide the full pay range.

The company’s behavior is prohibited in both scenarios. Rhode Island law applies to any situation where an applicant resides in Rhode Island.[7] First, employers are required to provide a wage range for any applicant when the applicant asks. And second, employers are also required to provide a wage range prior to hiring even if the applicant does not inquire.

Of the various states and cities that have laws in place regarding job postings, there are often small distinctions. Some of these laws take effect depending on the location of the employer but others apply based on the location of the applicant. More and more states are passing laws with requirements  to include a salary range in job postings. Employers will be subject to them even if they are not located in those jurisdictions. And, as seen in some jurisdictions such as Colorado, an employer cannot avoid compliance by openly refusing to consider applicants from those jurisdictions.

Employers should ensure they are in compliance with all of these various state laws to avoid potential penalties and litigation. More and more cities and states are implementing their own requirements for job postings – it behooves employers to get ahead of the curve and provide transparency in their postings for remote workers. Doing so will permit employers to continue to reap the benefits of remote workers while avoiding unnecessary liability and exposure.

[1] Colo. Rev. Stat. § 8-5-201

[2] NYC Admin. Code § 8-107(32)

[3] Cal. Labor Code § 432.3(c)(3)

[4] NY Lab. Law § 194-b

[5] Wash. Rev. Code Ann. § 49.58.110(1)

[6] Nev. Rev. Stat. Ann. § 613.133(2).

[7] 28 RI Gen. Laws § 28-6-22(c)

Employment Law

Employment Law