Hawaii-2016-SB2313-Amended

SECTION 1. The legislature finds that pay disparity persists between men and women who do similar work. The Institute for Women's Policy Research reports that if the pace of change continues at the same rate as it has since 1960, women and men will not reach pay parity until 2058.

The legislature further finds that action should be taken to encourage greater gender equality in the workplace. Since first enacting laws against employment discrimination based on sex decades ago, it has been the intent of the legislature to promote gender equality in the workplace. California has taken the initiative to improve equal pay by enacting the Fair Pay Act of 2015. Hawaii should follow suit to effect its intentions to promote gender equality in the work place and close the pay gap between men and women.

Existing Hawaii law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs when the performance requires equal skill, effort, and responsibility, and the jobs are performed under similar working conditions. However, in 2014, the gender wage gap in Hawaii stood at 14.2 cents on the dollar. A woman working full-time and year-round earned an average of 85.8 cents to every dollar a man earned. This wage gap extends across almost all occupations reporting in Hawaii. The gap is far worse for women of color: African American women in Hawaii make only 73.4 cents for every dollar a white male makes; Latina women make only 61.3 cents for every dollar a white male makes; and Asian American women make only 73.3 cents for every dollar a white male makes.

While Hawaii's gender wage gap is lower than the national average of 79 cents to the dollar, the persistent disparity in earnings still has a significant impact on the economic security and welfare of thousands of working women and their families. Collectively, women working full-time in Hawaii lose approximately $1,673,175,520 each year due to the gender wage gap. The wage gap contributes to the higher statewide poverty rate among women, which stands at about 11.7 per cent, compared to approximately seven per cent for men. The poverty rate for female-headed families is extremely high at 26.8 per cent, and approximately 14.4 per cent of Hawaii's children live in poverty.

The legislature additionally finds that pay secrecy undermines efforts to close the pay gap. A 2010 Institute for Women's Policy Research/Rockefeller Survey of Economic Security reported that 23.1 per cent of private sector workers indicates that discussion of wages and salaries was formally prohibited, and an additional 38.1 per cent reported that such discussion was discouraged by managers. Pay secrecy inhibits workers from pursuing claims of pay discrimination because women cannot challenge wage discrimination that they do not know exists. The federal government and many states have taken action to end wage secrecy by prohibiting retaliation against employees who discuss wages. Hawaii can also take this step by banning wage secrecy and banning retaliation against employees who disclose or discuss their wages.

The legislature finds that to eliminate the gender wage gap in Hawaii, the State's equal pay provisions and laws regarding wage disclosures must be improved. The purpose of this Act is to encourage equal pay between men and women by:

(1) Ensuring that employees performing substantially equal work are paid equally;

(2) Changing the requirement of "equal work" to "substantially equal work";

(3) Providing employers affirmative defenses in cases where pay differentials are caused by bona fide seniority systems, bona fide merit systems, and bona fide factors other than sex;

(4) Ensuring that any legitimate, non-sex related factor relied upon is applied in a non-discriminatory manner;

(5) Eliminating the "same establishment" provision, which prevents employees from being able to compare their salary to that of a coworker who did the same job in a different physical location;

(6) Prohibiting retaliation or discrimination against employees who disclose, discuss, or inquire about their own or co-workers' wages for the purpose of exercising rights under the law; and

(7) Prohibiting prospective employers from requesting or considering a job applicant's prior wage or salary history in the job application process.

SECTION 2. Section 378-2.3, Hawaii Revised Statutes, is amended to read as follows:

"[[]§378-2.3[]] Equal pay; sex discrimination[.]; job applicant wage or salary history. (a) No employer shall discriminate between employees because of sex, by paying wages to employees [~~in an establishment~~] at a rate less than the rate at which the employer pays wages to employees of the opposite sex [~~in the establishment~~] for [~~equal work on jobs the performance of which requires equal~~] substantially equal work in terms of skill, effort, and responsibility, [~~and that are~~] performed under similar working conditions[~~. Payment differentials resulting from:~~], except where the employer demonstrates the wage differential is based upon one of the following factors:

(1) A bona fide seniority system; provided that it is established by a collective bargaining agreement, civil service requirement, or formal employer policy that treats employees who do substantially equal work equally;

(2) A bona fide merit system; provided that it is being operated and applied in a nondiscriminatory manner and that it measures merit objectively and consistently across positions involving substantially equal work;

(3) A system that measures earnings by quantity or quality of production;

[~~(4)~~ ~~A bona fide occupational qualification; or~~

~~(5)~~] (4) A bona fide factor other than sex, including education, training, or experience; provided that it is not based on or derived from a sex-based differential [~~based on any other permissible factor other than sex do not violate this section.~~] in compensation, is job-related to the position in question, and is consistent with a legitimate business necessity.

(b) An employer shall not prohibit an employee from disclosing the employee's wages, discussing and inquiring about the wages of other employees, or aiding or encouraging any other employee to exercise rights under this section.

(c) No prospective employer shall, personally or through an agent, screen job applicants based on wage or salary history, including:

(1) Requiring that a job applicant disclose prior wage or salary history to satisfy minimum or maximum wage or salary criteria; or

(2) Requesting or requiring as a condition of being interviewed, or as a condition of continuing to be considered for an offer of employment, that a job applicant disclose prior wage or salary history.

(d) No prospective employer shall request the wage or salary history of a job applicant from any current or former employer of the job applicant; provided that a job applicant may provide written authorization to a prospective employer to confirm prior wage or salary history after the prospective employer has made an offer of employment to the job applicant."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2091.

THE SENATE	S.B. NO.	2313
TWENTY-EIGHTH LEGISLATURE, 2016		S.D. 2
STATE OF HAWAII		H.D. 1