In January, a new law took effect in Washington requiring employers with more than 15 employees to include wage and benefit information in new job postings. It’s intended to use pay transparency to address the gender wage gap, but employers raised concerns back when lawmakers were first debating the idea about possible unintended consequences.
For example, employers warned they might lose the ability to offer alternative positions that a person applying for a job might be interested in accepting. And they said the law might open the door to a flood of lawsuits.
Now, less than a year after the law took effect, we’re seeing there was good reason for concern. The Seattle Times reported Oct. 12 that a Seattle-based attorney filed 31 lawsuits since June against a range of employers accused of posting job ads without the legally required salary information.
The attorney’s law firm had previously published a blog post under the title “Did you know that Washington job seekers could get $5,000 thanks to recent updates to Washington’s pay transparency laws?” the newspaper reported. The blog post reportedly directed workers who applied for a job after Jan. 1 that failed to include salary information to take a screenshot of the ad and contact the law firm.
The burst of litigation lies in contrast to the approach of government regulators, who first try to educate employers about the new law before moving to stricter enforcement measures, like issuing a fine and ordering an employer to pay damages.
It’s also a perfect example of why something called qui tam, or more broadly, “private right of action,” is not a good idea. Basically, a private right of action gives an individual the right to bring a lawsuit against an entity that’s being regulated by a particular law or statute.
So instead of leaving the administrative review and enforcement of state regulations up to state agencies such as the Department of Labor & Industries, the private right of action means an individual can step outside of the government process and sue the employer, often bringing a class-action case. It’s almost as if the state is outsourcing enforcement of its regulations to private-sector attorneys.
The pay transparency law, adopted by lawmakers in 2022, included the private right of action, something that lawmakers in Olympia have increasingly attempted to attach to a range of proposed workplace-related measures including workplace safety, wage and overtime provisions, and privacy protection.
In California, a general private right of action law passed in 2004 has not yielded positive results for either employers or workers, according to a 2021 report prepared for the California Business & Industrial Alliance Foundation. It found that the average payment to a worker from a case decided by a state agency was 4.5 times greater than one decided by a court. In other words, employees were better off not going to court. And yet, without attorney fees involved, overall costs were lower.
For many Washington employers, including salary and benefit information in job postings is nothing new. They have voluntarily provided that information for years. For others, it’s a change in practice that might take some time to adjust to. Unfortunately, the way Washington lawmakers chose to enact the state’s pay transparency law opened the door to regulation by litigation – and that’s costly for both employers and employees.
Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.
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