Understanding the Hawaii Pay Transparency Law

 Understanding the balance between staying compliant and advancing a company culture of transparency and fairness is a top priority for HR and leadership. Act 203 (S.B. 1057), commonly referred to as the Hawaii pay transparency law, was enacted in 2023 and supports both transparency and fairness for workforces in Hawaii. Here are three key takeaways you’ll learn in this article: 

Here’s What You’ll Learn

1. While the law applies to job postings for positions in Hawaii, the 50-employee requirement generally refers to your company's total employee count.
2. Hawaii has shifted from an "equal work" standard to a "substantially similar work" standard, meaning HR must now ensure pay consistency across different job titles that share similar tasks and responsibilities, not just identical roles.
3. Previously limited to sex-based discrimination, Hawaii’s equal pay protections now cover all protected categories (race, age, religion, disability, etc.), significantly increasing the legal surface area for potential pay-related claims.

Overview of the Law and Requirements

The Hawaii Pay Transparency Law was signed on July 3, 2023, and became effective on January 1, 2024. 

Here’s a high-level overview at what the law entails:

• For covered employers, external job postings must include the hourly wage or salary range that “reasonably reflects the actual expected compensation.”  While the new law does not define the meaning of “expected compensation,” it also does not require disclosure of other components of total compensation, such as benefits.
• The law also expands Hawaii’s existing equal pay protections, moving from “equal work” to “substantially similar work,” and from sex‐based discrimination alone to all protected categories under Hawaii law. 
• Internal promotions or transfers, positions with employers with fewer than 50 employees, and public sector roles covered by collective bargaining are currently exempt from the pay-range posting requirement. 

From an HR perspective, this means that pay transparency is now part of the business, job posting disclosures matter more, and internal pay equity needs renewed focus.

Who Must Comply

One of the first questions you’ll get from hiring managers or leadership is: Does this apply to us? Here’s how to answer:

• The posting disclosure requirement (the salary range in job listings) applies to employers with 50 or more employees.
• The statute is ambiguous about whether the 50 employees threshold refers to the number of employees in Hawaii or the employer’s total workforce (including out‐of‐state). 
• The equal pay expansion (the pay discrimination for substantially similar work) applies regardless of employer size. 
• Processes exempted from the posting rule include internal promotions/transfers, public employers under collective bargaining, and employers below the threshold. 

For HR, the takeaway is if your company falls below the 50 employee threshold and isn’t required to disclose salary ranges publicly, you should still consider Hawaii pay transparency best practices.

What Is Required

Let’s break down what you and your HR teams need to execute to satisfy the Hawaii Pay Transparency Law.

External Job Listings

For qualifying employers, job ads must include:

• An hourly rate or salary range that “reasonably reflects the actual expected compensation” for the role. 
• Consistency across job boards, employer websites, third‐party recruiter posts etc., so the candidate sees the same disclosure. 
• Note that the law does not mandate inclusion of other compensation components (bonuses or benefits) in the posting, though including them may support your employer brand. 

Internal Pay Equity and Compensation Practices

Even if you’re exempt from the posting requirement, the law strengthens equal pay enforcement in the following ways:

• Employers must ensure that employees in protected categories (race, sex/gender, sexual orientation, age, etc.) are not paid less than other employees doing “substantially similar work.” 
• “Substantially similar work” is defined based on skill, effort, responsibility and similar working conditions. 
• The law prohibits reliance on salary history in hiring decisions. This complements prior Hawaii laws banning inquiries into a candidate’s salary history. (Source, labor.hawaii.gov)

Documentation and Communication

Good HR practices that support this law include:

• Creating and maintaining a compensation philosophy and structure defining salary ranges or hourly ranges for roles.
• Align job postings with those frameworks and make sure they reflect expected compensation.
• Communicate with employees. Because they may see what is being offered externally, it’s wise for HR to be proactive and develop an internal communication plan around how compensation ranges are determined. 

Penalties for Noncompliance

When it comes to the Hawaii pay transparency law, one of the trickier aspects is enforcement and penalties.

• Unlike some other states, Hawaii’s law does not specify a fixed fine or penalty for failing to include the salary range in job listings. 
• The law is embedded in the equal pay statute enforcement framework, meaning violations may trigger complaints with the Hawaii Civil Rights Commission (HCRC) and potential litigation under Hawaii’s Chapter 378 laws. 

From a practical HR risk standpoint, negative impacts may include:

• Reputational risk (candidates/future employees seeing non-transparent postings)
• Increased scrutiny of pay practices and potential litigation for pay discrimination
• Internal morale issues if past or current pay structures are inconsistent

In other words, even though there isn’t a specific fine or dollar amount for posting without a salary range, HR teams should not treat this as optional or low risk. Proactive compliance and fair compensation structure are the best mitigation.

Best Practices for Pay Transparency and HR Teams

Given this pay transparency requirement and its equal pay implications, HR teams should consider the following best practices:

1. Audit your job postings now. Review all external job ads and ensure they contain a salary range or hourly rate where required. Build the posting language so that it easily integrates into your ATS or recruitment workflows.
2. Define reasonable salary/ hourly ranges. Determine how to calculate ranges that “reasonably reflect the actual expected compensation.” Consider market data, internal equity, job requirements, and geography. Document the rationale so you can stand behind the numbers.
3. Review pay equity internally. Even if your organization has fewer than 50 employees, the equal pay rules apply. Conduct a pay equity review to identify any pay differentials across protected classes for substantially similar work.
4. Train hiring managers and HR partners. Make sure recruiters, hiring managers and HR business partners are aware of the new law, the posting requirements, and the concept of “substantially similar work” so they understand why pay ranges matter.
5. Communicate with your current workforce. Since employees will see salary ranges in job posts, it’s beneficial to have an internal message outlining how pay decisions are made, ensuring transparency about career progression, and showing your organization’s commitment to fairness.
6. Be ready for candidate questions. Candidates may come in asking: “I saw your posted range. How was it determined?” or “How do I move up in your range?” HR should be prepared with an explanation of range structure and how performance, tenure, geography, and market pressure factor in.
7. Leverage transparency in employer branding. Transparency can be a recruitment advantage and strategy. Use the “we disclose our salary range” message as part of your candidate value proposition to attract talent and build trust.
8. Document compliance and framework. Maintain a record of how salary ranges were derived, how job postings were updated, and how internal audits were conducted. This documentation will support you in case of audits or litigation.

What the Hawaii Pay Transparency Law Means for Your Organization

Hawaii’s Pay Transparency Law highlights the continued commitment to pay transparency by states across the U.S. For those in HR, it’s an opportunity not only to ensure compliance but to build a stronger foundation of fairness, transparency, and trust with both candidates and current employees.

If you’re looking for assistance, OutSolve is well positioned to help. We can support you in many ways, including:

• Conducting a job posting review to identify any non-compliant job ads and update your workflow to include the required salary/hourly disclosure.
• Facilitating an internal pay equity audit, benchmarking roles, identifying disparities and advising corrective actions.
• Creating communication and training materials for your HR team and hiring managers that explain pay transparency, the law requirements, and how they impact recruitment and pay decisions.
• Helping you develop a compensation philosophy and range structures aligned with market data and internal equity.

In summary, view the Hawaii pay transparency law not just as an item in a compliance checklist, but as a strategy. A transparent pay culture supports better recruitment, drives equity, strengthens employee trust, and helps with retention.

If you’d like to explore how OutSolve can help your team implement best practices and support full compliance, contact us today to get started. If you are looking for insight from other HR professionals on how they manage pay transparency laws, join our Slack community, HR Gumbo City. 

Neil Dickinson

Leading Compensation Services at OutSolve, Neil helps organizations align pay, performance, and compliance through data-driven benchmarking, pay equity analytics, and global pay transparency initiatives. His team partners with employers across industries to design and operationalize compensation programs that are fair, competitive, and compliant—supporting business growth, workforce trust, and readiness for evolving regulations, including the EU Pay Transparency Directive. Neil brings over 20 years of experience working with HR, Talent Acquisition, and Compensation teams across the country to build best-in-class compliance programs. He has supported clients in EEOC equal pay charges and has also designed Pay Equity Analytics to provide federal contractors better visibility to pay gaps within their organizations. Neil regularly delivers training on compensation topics for SHRM, ILG, and other industry HR group events. Neil received his undergraduate degree from the University of South Carolina and The University of Hull in England and his MBA from The Citadel. He is also SHRM certified.