Connecticut Enacts New Pay Equity and Fairness Act

As of  July 1, 2015, Connecticut Governor Dannel P. Malloy signed into law “An Act Concerning Pay Equity and Fairness (“Act”),” which bars employers from taking any action designed to prohibit employees from discussing their wages with other employees. Employers need to be aware of this fundamental change in the law and revise their practices accordingly.

The Act applies to all Connecticut employers with one or more paid employees. Under the Act, employers shall not:

• Prohibit an employee from disclosing or discussing the amount of his or her wages or the wages of another employee of such employer that have been disclosed voluntarily by such other employee;

• Prohibit an employee from inquiring about the wages of another employee of such employer;

• Require an employee to sign a waiver or other document that denies the employee his or her right to disclose or discuss the amount of his or her wages or the wages of another employee of such employer that have been disclosed voluntarily by such other employee;

• Require an employee to sign a waiver or other document that denies the employee his or her right to inquire about the wages of another employee of such employer;

• Discharge, discipline, discriminate against, retaliate against or otherwise penalize any employee who discloses or discusses the amount of his or her wages or the wages of another employee of such employer that have been disclosed voluntarily by such other employee; or

• Discharge, discipline, discriminate against, retaliate against or otherwise penalize any employee who inquires about the wages of another employee of such employer.

The Act is broader in scope than the federal National Labor Relations Act (“NLRA”) which has also been interpreted to prohibit a ban on pay discussions. While the NLRA excludes certain managerial and supervisory employees from its protections, Connecticut’s law does not. Also, while Connecticut’s Act protects voluntary disclosures by employees about their wages, it does not require an employer or employee to disclose the amount of wages paid to any employee.

Employees who believe their employer has violated any part of the Act are authorized by its provisions to file a lawsuit seeking compensatory damages, attorney’s fees and costs, punitive damages and equitable relief. The statute of limitations on such private actions is two years from the date of the alleged violation.

As the Act, which is currently in effect, essentially nullifies traditional notions of the latitude employers should be accorded to maintain as confidential employee wage information, employers should consult with counsel to review their handbooks, policies, contracts, pay communications and other documents in order to ensure proper compliance. For example, it is now likely that an offer letter which requires that compensation be maintained as confidential would be viewed under the law as a “waiver or other document” that denies the employee his or her right to disclose or discuss  the amount of his or her wages.  ­­­­­­­­­­­­­­

Attorneys in our Employment Law Department can assist employers in assuring compliance with this new law.

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