Rhode Island’s new pay equity law is still more than a year away from taking effect, but Ocean State businesses should be taking steps to ensure they can meet the requirements, or they may face lawsuits, penalties and fines, local labor lawyers say.
Legislation passed by the General Assembly and signed by Gov. Daniel J. McKee on Aug. 4 amends the existing equal pay law so that all businesses must pay equal wages in most cases for “comparable work,” regardless of an employee’s gender, ethnicity, sexual orientation or other potentially discriminatory factors.
Violators could face fines from the R.I. Department of Labor and Training of up to $5,000 for each violation, and they could be liable for damages such as unpaid wages.
The new law doesn’t go into effect until Jan. 1, 2023, and there’s an additional two-year grace period in which no civil penalties will be accessed against violators, but Jessica Schachter Jewell, a labor and employment attorney at Nixon Peabody LLP in Providence, said employers should familiarize themselves with the new requirements now.
“It’s important that all businesses take this law seriously, as it applies to all businesses in the state of Rhode Island,” she said.
Jewell said employers should start planning to conduct a wage audit – it’s referred to as a “self-evaluation” in the law – to identify and fix any pay practices that are prohibited by the new law. While companies may use their own audit methods, the DLT is expected to issue a self-evaluation form for employers, she said.
According to the new law, employers accused of illegal pay inequities could be absolved from liability against legal action if they can prove that they conducted a “good faith” self-evaluation before action was taken against them.
‘It’s important that all businesses take this law seriously.’
JESSICA SCHACHTER JEWELL, Nixon Peabody LLP attorney
By approving the new pay equity law, Rhode Island joins a growing number of states that have enacted measures to combat wage discrimination.
Indeed, according to the National Conference of State Legislatures, 42 states have equal-pay laws, while eight of those states have an exemption for small businesses.
The NCSL said the subject of wage inequality remains a contentious topic, even though it’s been more than 50 years since the federal Equal Pay Act and the Civil Rights Act were passed. The Equal Pay Act provides a cause of action for an employee to sue for damages, while the Civil Rights Act prohibits discrimination in the workplace based on sex and is used in wage discrimination claims.
According to the U.S. Bureau of Labor Statistics, in the first quarter of 2020, full-time female employees earned only 80% of what full-time male employees earned. The bureau said that the gender wage gap has narrowed since 1979, when women’s earnings were only 62% of men’s earnings.
The disparity is even greater for Black and Hispanic women. Black women earn 64 cents and Hispanic women earn 56 cents for every $1 earned by white, non-Hispanic men.
Some legal observers say many of the states with pay equity laws prohibit wage differentials based on sex only, but the changes in Rhode Island’s law expand the classes of people it protects.
The Rhode Island law offers protections to employees based on race, color, religion, sex, sexual orientation, gender identity or expression, disability, country of ancestral origin, or those age 40 and older.
Pay differences for comparable work are allowed if there’s a seniority or merit system, a system of measuring earnings by quantity or quality of production, locations with different costs of living, reasonable shift differentials, education, training, experience, or travel.
Jewell said Rhode Island’s definition of “comparable work” is like the one in Massachusetts – “work that requires substantially similar skill, effort and responsibility, and is performed under similar working conditions,” the law says.
As for how employers will handle the new law, Jewell said there is a lot of activity with businesses trying to get educated to prepare for performing self-evaluations. A concern, she said, is that some of the smaller businesses might not be aware of the law and its requirements and could be cited for noncompliance.
The passage of the amended law marked a victory for state Rep. Susan R. Donovan, D-Bristol, and former Sen. Gayle L. Goldin, D-Providence, both of whom have been pushing improved pay equity legislation for several years.
“I have experienced firsthand what it’s like to be paid unequally when you are doing comparable work,” Donovan said when McKee signed the legislation into law on Aug. 4. “It’s a devastating blow, both emotionally and financially, for so many women and people of color across Rhode Island. Women work just as hard as our counterparts to advance our careers and support our families, and we deserve to be compensated equally.”
Cassius Shuman is a PBN staff writer. Email him at Shuman@PBN.com.
