Hawaii Employers Take Note: Equal Pay is About to Get a Lot More Equal

It has long been the case that pay differences between men and women who perform equal work are unlawful unless they are explained by some factor other than sex. This can be merit, seniority, quantity or quality of work or any other factor other than sex. This is the law under the federal Equal Pay Act as well as Hawaii law. Such pay differences need not be a product of discriminatory intent to be unlawful and give rise to a claim for damages to recover the differences in pay and an equal amount in liquidated damages. While “any other factor other than sex” sounds like a potentially vast catch-all, courts will scrutinize the employer’s rationale and generally confine the exception to legitimate business reasons.

The Hawaii legislature passed a law this session to significantly expand equal pay obligations in two respects. First, and most dramatically, unequal pay will soon be unlawful between ANY protected category, not just on the basis of sex. Second, “equal work” is no longer the standard – the law will soon prohibit unequal pay for the less exacting standard of “substantially similar work.”

?The first of these changes means that any difference in pay between two employees performing substantially similar work will need to be justified by some legitimate criteria. That’s because even identical twins are unlikely to be identical in every category Hawaii law protects from discrimination (think not just race, sex, age, color, and ancestry, but also gender identity or expression, sexual orientation, religion, disability, marital status, arrest and court record, reproductive health decision, and domestic or sexual violence victim status).

Employers, have you granted a raise to an employee because they had the temerity to ask for it and not to those who did not ask? Have you let the pay of longer tenured employees lag behind that of more recently hired employees with higher pay expectations? Do you have other discrepancies that may be similarly characterized as arbitrary between or among employees performing similar jobs? If such discrepancies may exist in your organization, now is the time to audit your pay practices and make a correction. If you are wondering whether you have a legitimate factor “other than any protected category” that can be relied upon, consult an employment lawyer.

The bill, SB1057, is not on Governor Green’s veto list so it will become law, and will take effect January 1, 2024. You can take a look here: https://www.capitol.hawaii.gov/sessions/session2023/bills/SB1057_CD1_.HTM (You may already have heard of this bill as it will ALSO require private Hawaii employers with 50 or more employees to “disclose an hourly rate or salary range that reasonably reflects the actual expected compensation” in all job listings (not including internal transfers or promotions)).?

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This?article?was prepared by John S. Mackey ([email protected]?or (808) 547-5746) of Goodsill’s Labor and Employment Law Practice Group.

Goodsill’s attorneys practicing in the area of Labor and Employment serve the needs of multinational, national and local corporations; nonprofit organizations; small businesses; and individual entrepreneurs in various matters including defense of termination, discrimination, harassment, Americans with Disabilities Act (ADA) claims and other employment-related civil litigation, defense of claims under Employment Practices Liability Insurance (EPLI) and directors and officers (D&O) liability insurance policies, and before the Hawai‘i Civil Rights Commission, the Equal Employment Opportunity Commission, the State of Hawai’i Department of Labor and Industrial Relations and the United States Department of Labor, including the Office of Federal Contract Compliance Programs and the National Labor Relations Board.

Notice:?We are providing this article as a commentary on current legal issues, and it should not be considered legal advice, which depends on the facts of each specific situation.?Receipt of this Goodsill article does not establish an attorney-client relationship.