What You Need to Know About the Rhode Island Pay Transparency Law

Pay transparency continues to gain traction at the state level, and Rhode Island is no exception. Let’s dive into the details of how this law works and how your team can stay compliant.

Here's What You'll Learn

Rhode Island Pay Transparency Requirements

This law has been in place for a few years now. As of January 1, 2023, the state of Rhode Island amended its Equity Pay Law to include some new requirements.

This is an overview of the requirements:

• Employers may not ask applicants for their salary history, or use it, when deciding whether to hire them or how much to pay them. 

• Employers must provide employees with the wage range for the employee’s job both at the time of hiring and when they move into a new role. 

• At the employee’s request, employers must provide the wage range for an employee’s job.  

• Employers can’t require employees or applicants to waive their rights to discuss or inquire about compensation and can’t retaliate if an employee does so.  

The law also covers pay equity. It doesn’t just relate to gender, but multiple categories, like race, religion, sex, sexual orientation, gender identity or expression, disability, age, country of origin for “comparable work.”   

So, what does this mean for HR? It means that your pay practices and job posting process might need updating if you are hiring in Rhode Island.  

Who Must Comply? 

The bottom line is that if your company has a presence in Rhode Island, then this law applies to you. The state has a “universal” approach and does not have a size threshold on company size or number of employees. If you have employees in Rhode Island or accept applications from people who reside or will work in Rhode Island, then the law is relevant.  

As an example, let’s say you’re a national employer recruiting for a remote role. The job is open to remote workers including Rhode Island residents. Even if your office isn’t in Rhode Island, and because you may hire someone there, this law applies.  

What is Required? 

Now, let’s get into more detail about what’s actually required by employers under this law. There are four key areas, including:  

1. No inquiry about salary history  

Before you talk compensation and extend a job offer, you can’t ask for an applicant’s wage history.   

After you make an offer, there’s a narrow exception. If the applicant voluntarily provides salary history, then you may consider it to support a wage higher than the wage you’re offering as an employer. 

2. Wage range disclosure 

You must provide the wage range for the position when requested. Specifically: 

• For applicants, at their request and before discussing compensation.   

• For current employees, at hire, when moving into a new position, and on request. This is true during the course of their employment.  

• The term “wage range” means an employer’s budgeted range, or the actual range paid for those currently in similar roles.   

3. Pay-discussion / non-retaliation protections 

Employees can’t be prohibited from discussing pay or asking about pay for others. You also can’t retaliate against them if they do so.   

4. Justifying pay differentials 

If two employees perform comparable work, then you can’t pay one less because of a certain characteristic, unless you can justify a pay differential through legitimate factors, such as seniority, merit, quantity/quality, training, geographic location, shift differential.   

HR Pro Tip: Document, document, document! Develop or update your documentation and job evaluation processes so if you ever have to justify pay differences, you’ll be ready with supporting documentation. 

Penalties for Noncompliance 

As HR, you know that rules matter, but how much do they matter in this instance? Well, quite a bit. The law gives the state agency, the Rhode Island Department of Labor and Training (RIDLT), the power to investigate pay equity and transparency violations.   

Penalties for violations include: 

• Civil penalties for violations of pay-equity/transparency which can range from $1,000 to $5,000 depending on factors such as employer size, prior violations, whether it was willful, etc.   

• Through December 31, 2024, there were no civil penalties, but unpaid wage claims, compensatory and liquidated damages were still possible in litigation.   

• In addition to civil penalties, an employee or job applicant can sue an employer within three years of the alleged violation or discovery of an alleged violation.  

What does this mean for HR? Failing to provide wage ranges or continuing to ask salary history can lead not only to regulatory action, but also to costly lawsuits.  

Best HR Practices for Pay Transparency  

Now, let’s talk about some best practices and how you can optimize pay transparency in your company.  Being proactive is critical, as well as updating some of your HR processes. There are six main steps including: 

1. Review and update your job posting and recruiting language 

• Remove salary history questions from applications and interviews. 

• Build a process to provide wage ranges on request or include them where your postings already allow. 

• Train hiring managers and HR on the key areas of the law and how they play a role in supporting compliance.  

• Provide some employee training or communication as well, so they are aware of the law and the company’s related policies and processes, and address any questions or concerns.  

2. Create wage-band structures 

Even if you haven’t yet, now is the time to map roles, levels, and corresponding salary bands. That helps you answer the inevitable question of “What is the range we are offering for this role?”   

As an example, say you receive an internal request from a current employee asking for the wage range for their role. If you already have it defined and mapped out, then you can respond promptly, confidently, and demonstrate fairness. 

3. Perform a wage audit now 

Conduct wage audits on a regular basis. This will help you greatly with evaluating your pay practices, as well as finding and correcting any disparities. A wage audit should identify comparable roles, review pay across classes and roles, address any gaps, and document the factors that justify any pay differences. Again, this isn’t a “one and done” task. Build regular wage audits into your HR process and business plans.  

4. Educate your workforce  

If employees think they might get in trouble for talking about pay, that could chip away at their trust. Make sure company policy that wage discussions are allowed and reassure them there will be no retaliation for doing so. HR can help create this type of open environment. Management should lead by example, as well. 

For instance, imagine that you have an employee who asks whether they can compare their pay to a co-worker’s in a different location. Your HR team should be able to answer “Yes, here’s the policy, and tell me why you asked so we can walk through whether the roles are comparable.” That type of open communication is a  "win-win" for everyone involved, and can go a long way towards supporting employees and maintaining and even increasing their trust. 

5. Document thoroughly 

Again, documentation is crucial for HR decisions. Whenever you make compensation decisions, especially those that deviate from the norm, document the reasoning and justification. Include information on the specific role, responsibility, geography, market data, shift schedule, and experience. That record gives you a defensible position if ever challenged. 

6. Engage leadership early 

Compensation isn’t just HR’s issue. It’s also a leadership issue. Senior leaders need to buy into wage band design, transparency approach, and the reasons behind it. If you encounter resistance (“we don’t share ranges” or “It’s always been done this way”), then HR needs to be ready to reinforce business case: transparency builds trust, supports equity, mitigates litigation and regulatory risk. Plus, it’s the law! 

HR Pro Tip: Use this as a chance to connect with your partners in payroll, legal, and finance. A “we’re all on the same team” mindset helps support compliance. For example, if your payroll system can flag offers that fall outside a wage range, then you’ll likely stay ahead of misalignments and subsequent issues.  

What Pay Transparency This Means for Your Organization  

If you’re feeling overwhelmed with all of this, then partnering with a compliance expert may be just what you need.  

That’s where OutSolve comes in. We help HR teams translate the legal requirements into your HR processes and practices. We can help clarify where you stand, map your job levels and salary bands, design training, communications, and workflows so you aren’t scrambling when someone asks for a wage range or raises a pay concern.  

Be sure to check out our Ultimate Guide to Pay Transparency Laws by State article.  

If you’d like a custom session or audit for your Rhode Island workforce, contact us today for a consultation.