Setting compensation involves more than choosing a competitive number. Since Jan. 1, 2023, Rhode Island employers have had to follow expanded pay-equity requirements under the Rhode Island Equal Pay Act. Hiring decisions, salary discussions and pay differences can all raise legal concerns when they do not follow state law.
Knowing these three issues can help you identify possible gaps in how your business handles employee pay:
1. Asking applicants about salary history
The state generally prohibits you from asking applicants what they earned at previous jobs or seeking that information from former employers. Rhode Island’s salary history and wage-range rules also limit how you may use prior wages when setting initial pay.
A narrow exception applies after you make an initial offer that includes pay. If an applicant voluntarily shares their wage history after you make the initial offer, you may consider that information as a basis for increasing the offered pay and may confirm it.
2. Missing required wage-range disclosures
Applicants can request the pay range, or the minimum and maximum pay set for the role, and you should provide that range before discussing compensation. You must also give employees the applicable range at the time of hire. The same rule applies when they take on a different role or request the information.
Setting pay ranges in advance can make these disclosures easier to handle consistently.
3. Paying differently for comparable work
Rhode Island generally prohibits lower pay based on protected traits, such as race, sex or age, when employees perform comparable work. Comparable work generally means jobs that require similar skill, responsibility and effort and are performed under similar conditions.
Not every pay difference violates the law. Differences may be allowed when they are based on factors such as merit, production, seniority or job-related training, education or experience. Different pay may also be allowed for certain shifts, such as overnight work. Clear records showing the reasons behind compensation decisions can help explain legitimate differences. State law may also give employers certain protections when they review their own pay practices in good faith and correct unlawful wage differences.
When a pay decision deserves closer review
Not every compensation decision falls neatly into a simple rule. A raise, new hire or pay difference can involve several rules at once. Legal guidance can help you understand whether your employee pay practices follow state law. It can also help you spot risks before a disagreement turns into a larger dispute.
