report that contains workforce demographic and pay data categorized by race, ethnicity, sex, and job category. 3. Avoid Costly Mistakes You should note that most pay transparency laws include penalties for violations. For example, in Illinois : • The employer has 14 days to cure a first offense, seven days for a second offense, and no cure period for a third or subsequent offense. • If the violation on an active job posting is not remedied within the cure period, the employer will be subject to a civil penalty of up to $500 for a first offense, $2,500 for a second offense, and $10,000 for a third or subsequent offense. • For violations on non-active job postings, the employer will be subject to a civil penalty of up to $250 for a first offense, $2,500 for a second offense, and $10,000 for a third or subsequent offense. • A job posting is considered one posting regardless of how many duplicative postings list the job opening. In addition to penalties imposed by the states and cities enforcing the laws, failure to comply with pay transparency laws has begun to spawn costly litigation. For example, the 2023 job posting requirements under Washington State’s pay transparency law have led to an avalanche of class action litigation filed on behalf of “job applicants” seeking to recover statutory damages in the amount of $5,000 per applicant to any noncompliant posting, plus attorneys’ fees and prejudgment interest. This illustrates the importance of developing compliant policies and practices. A best practice is to be proactive. Pay equity and pay transparency are ongoing compliance issues that require vigilance. 4. Create a Compliance Blueprint Now is a good time to create or update your pay transparency compliance plan. Although your specific plan will depend on which state and local laws apply to your operations, you should generally consider taking the following steps: • Review your job postings to ensure compliance with all applicable obligations. • Train your hiring managers , talent acquisition professionals, and human resources employees on the requirements. • Establish a regular review process so that you can evaluate your compensation and benefits on a routine basis and adjust as needed. • Coordinate with third parties you use to assist with job postings to ensure they are complying with the applicable requirements, if needed. • Conduct a privileged pay audit with counsel to ensure compliance with federal, state, and local equal pay requirements. (More on this below.) • If necessary, consider working with your counsel to develop a standardized pay scale format to ensure you comply with pay equity principles. • If you have operations in states with different requirements or in other states that do not require such transparency, consider whether you will adopt a patchwork approach or a uniform
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