Complete Guide to Hawaii Pay Transparency Laws: Requirements & Compliance

Hawaii’s pay transparency law is a significant milestone for employers and employees alike. Starting January 1, 2024, the state introduced new requirements to ensure fair and equitable compensation practices. These changes reflect a growing movement toward wage transparency and accountability in the workplace.

Employers with 50 or more employees must now meet specific obligations when sharing information about job openings. The goal is to create a clear and upfront process for disclosing pay ranges, helping both job seekers and current employees understand compensation expectations.

This guide explains Hawaii’s pay transparency and equity state laws, focusing on the requirements for pay disclosure, who the law applies to, and how it promotes fairness across the workforce.

Understanding Hawaii's Pay Transparency Law

Hawaii's pay transparency law, effective January 1, 2024, requires private employers with 50 or more employees to include clear salary ranges or hourly pay rates in all job advertisements. Employers must ensure that every job posting, whether internal or external, provides accurate compensation details. The law applies to all forms of communication regarding advertised roles, including online postings, printed advertisements, and internal listings.

The legislation is designed to address pay equity by making pay expectations visible to job seekers upfront. By requiring employers to disclose pay information, the law aims to reduce disparities across protected categories such as gender and race, fostering a fairer hiring process.

Businesses with fewer than 50 employees are not mandated to follow the law but are encouraged to adopt pay transparency practices proactively. While the law does not outline specific penalties for noncompliance, failure to follow the requirements could impact an employer's reputation and trustworthiness.

Employer Coverage and Exemptions

The Hawaii pay transparency and equity state laws apply specifically to private employers with 50 or more employees. This includes a company's entire workforce, regardless of whether employees are based in Hawaii or elsewhere. The law counts full-time, part-time, and temporary employees toward this threshold. Employers with fewer than 50 workers are not required to comply but can still choose to disclose pay ranges voluntarily to promote transparency.

Roles and Employers Excluded from Compliance

Not all positions and employers are covered by the law. Internal promotions are exempt, meaning employers are not required to disclose salary ranges for roles filled by existing employees moving within the organization.

Public-sector employers, including state and local government agencies, are also excluded. The law focuses on private employers, where wage transparency practices have historically been inconsistent.

Additionally, small businesses with fewer than 50 employees fall outside the scope of the requirements. This exemption acknowledges the unique challenges smaller employers face in implementing structured compliance measures.

Purpose of the Exemptions

The exemptions aim to balance fairness with practicality. Smaller businesses often operate with limited HR resources, making compliance more complex. For public employers, existing pay frameworks already provide a level of transparency.

By targeting larger private organizations, the law concentrates on workplaces where pay inequities are more likely to occur. This approach creates a manageable framework while encouraging equity in compensation practices across the largest employers.

Pay Range Disclosure Requirements

Hawaii requires employers to include specific pay information in every job posting. Employers must disclose either a salary range or an hourly wage range that reflects the compensation intended for the role. The information must be clear and directly relevant to the position being advertised.

What Job Listings Must Show

Employers are required to list:

• Salary or Hourly Wage Ranges: Postings must include a defined numerical range, such as "$45,000 - $55,000 annually" or "$22 - $28 per hour." This ensures applicants understand the expected compensation before applying.

• Uniformity Across Platforms: The same pay range must appear in all advertisements for the role, whether published on job boards, company websites, or printed flyers.

Addressing Benefits and Additional Compensation

Hawaii's pay transparency law does not explicitly require employers to include details about benefits or bonuses in job advertisements. However, providing information about health insurance, retirement plans, or performance-based bonuses can enhance transparency and attract qualified candidates. While optional, offering a full picture of compensation demonstrates fairness and openness.

Setting Accurate Ranges

Pay ranges must closely align with what the company is prepared to offer qualified candidates. Employers should avoid overly broad ranges that could mislead applicants, such as "$30,000 - $90,000 annually." Instead, ranges should reflect market conditions, role requirements, and internal pay structures. Regularly reviewing pay data and benchmarks helps employers set realistic ranges that comply with the law and build credibility.

Clear and accurate pay disclosures not only fulfill legal requirements but also strengthen trust with job seekers, creating a more equitable hiring process.

Equal Pay for Substantially Similar Work

Hawaii's pay transparency and equity state laws introduced the concept of "substantially similar work" to replace the older "equal work" standard. This updated framework expands the focus from identical roles to comparable ones, emphasizing the actual responsibilities, skills, and effort involved. The intent is to ensure fair wages for positions requiring similar qualifications, regardless of job titles or departments.

Under the revised standard, jobs no longer need to match perfectly to justify equal pay. Instead, employers must evaluate whether roles share enough overlap in core duties, decision-making responsibilities, and required expertise. This shift encourages a more nuanced approach to assessing pay equity across the workforce.

Accepted Reasons for Pay Differences

While pay equity is emphasized, certain differences in compensation are permitted. Employers can justify these variations if they align with lawful and objective criteria:

• Seniority: Employees with longer tenure often earn more due to their accumulated experience and loyalty to the organization.

• Performance: Documented achievements, such as exceeding goals or completing high-quality work, can result in higher pay.

• Production Output: Roles tied to measurable output, like manufacturing or sales, may include tiered pay based on productivity.

• Specialized Qualifications: Advanced degrees, certifications, or unique expertise relevant to the job can warrant higher compensation.

These factors must be consistently applied across the workforce to avoid any appearance of bias or discrimination. Transparent, written policies are the best way to support decisions and ensure fairness.

Evaluating Comparability in Roles

To implement the "substantially similar work" standard effectively, internal evaluations are necessary. Employers should regularly review and compare roles to identify where pay adjustments may be needed. Steps to assess comparability include:

1. Review Job Functions: Focus on the day-to-day responsibilities and key outcomes of each position rather than relying solely on job titles.

2. Assess Required Skills: Compare the technical expertise, certifications, and training needed for each role.

3. Document Objective Differences: Clearly record why pay varies between two roles with overlapping responsibilities, such as additional leadership duties or required certifications.

4. Create Consistency: Standardize pay ranges and establish written criteria for raises, bonuses, and promotions to prevent favoritism.

Regular evaluations not only ensure compliance but also foster trust among employees. Employees are more likely to feel valued and respected when they see transparency and fairness in compensation practices.

Prohibited Discrimination and Protected Categories

Hawaii's pay transparency and equity state laws are built on a foundation of robust anti-discrimination protections. Employers must ensure wage practices honor these legal safeguards, which shield employees from unfair treatment in the workplace. Compliance isn't optional—it's mandatory, and understanding the full scope of protected categories is key.

Protected Categories in Hawaii

Hawaii's laws explicitly prohibit wage discrimination based on specific characteristics. Employers are required to treat employees equitably, regardless of:

• Race and Color: Pay decisions cannot reflect biases tied to an employee's racial or ethnic background.

• Religion: Religious beliefs or practices must not influence compensation.

• Sex, Gender Identity, or Gender Expression: This includes fairness in pay for transgender and non-binary individuals.

• Sexual Orientation: Employers must ensure that wages are equal for employees of all orientations.

• National Origin and Ancestry: Cultural background or birthplace cannot justify pay differences.

• Age: Workers aged 40 and older are protected from wage disparities.

• Disability: Physical or mental disabilities cannot factor into compensation decisions.

• Marital Status: Employers cannot adjust wages based on whether an employee is single, married, or divorced.

• Arrest and Court Record: Pay cannot reflect biases linked to an employee's criminal history, including non-convictions.

These protections create a clear framework for evaluating pay practices. Employers must align compensation structures with these categories to avoid discrimination and ensure fairness.

How Pay Transparency Prevents Wage Discrimination

Requiring employers to disclose pay ranges addresses inequities across protected categories. Transparent salary information brings hidden disparities to light, making it easier to spot patterns of wage discrimination. Job seekers and employees gain clarity about what fair compensation looks like for their position, while employers are encouraged to standardize pay practices.

When compensation details are openly shared, there's less room for bias to impact pay decisions. Transparency helps create consistency, ensuring that wages reflect qualifications, experience, and role requirements—not personal characteristics. By putting pay information front and center, Hawaii's laws aim to build a more equitable workplace for all employees.

Penalties and Enforcement

Hawaii's pay transparency and equity state laws are backed by clear enforcement measures to ensure compliance. Employers who fail to meet the requirements for disclosing pay ranges or maintaining equitable practices risk legal and financial consequences. The Hawaii Civil Rights Commission (HCRC) oversees enforcement and investigates complaints filed by employees or job applicants.

Filing Complaints with the HCRC

Employees or candidates who believe an employer has violated pay transparency laws can file a formal complaint with the HCRC. Complaints may involve issues such as missing salary ranges in job postings, inaccurate compensation disclosures, or wage discrimination tied to protected categories.

Once a complaint is filed, the HCRC conducts an investigation to determine whether the employer has violated the law. If violations are confirmed, the employer may be required to make corrections, pay penalties, or face additional legal action.

Consequences of Noncompliance

Employers found in violation of Hawaii's pay transparency requirements may face several consequences, including:

• Mandatory Corrective Actions: The employer may need to update job postings, revise internal pay structures, or address discrepancies in compensation practices.

• Financial Penalties: Repeated or severe violations can result in fines, creating a financial burden for the organization.

• Civil Litigation: Affected employees may bring lawsuits against the employer, leading to potential damages, settlements, or court-ordered remedies.

Noncompliance can also damage an employer's reputation, making it harder to attract and retain talent. Publicized violations of pay transparency laws can erode trust among employees and job seekers alike.

Staying Ahead with Proactive Efforts

Employers can avoid penalties by taking proactive steps to meet Hawaii's pay transparency and equity requirements. Conduct regular reviews of job postings and ensure all salary ranges are accurate and clearly displayed. Audit compensation practices to identify and correct any inequities across roles or protected categories.

Educate hiring teams and HR professionals on compliance requirements to eliminate errors in job advertisements or hiring practices. Providing clear guidance to those involved in recruitment ensures consistency and reduces the risk of violations.

Focusing on compliance is not just about avoiding penalties. Transparent and equitable pay practices strengthen employee trust, enhance workplace culture, and improve an organization's ability to compete for top talent.

Practical Steps to Comply

Meeting Hawaii's pay transparency and equity state laws requires intentional actions to ensure all job postings and compensation practices align with legal requirements. Employers must take clear, proactive measures to remain compliant while promoting fairness and trust within their workforce.

Conduct Internal Pay Audits

Start with a detailed review of current compensation across all roles. Internal pay audits identify discrepancies and confirm that salary ranges in job postings accurately reflect actual pay practices.

• Evaluate Current Salaries: Compare pay rates for employees performing similar work to uncover any inconsistencies. Focus on roles with overlapping responsibilities, skills, or qualifications.

• Analyze Market Data: Use external salary benchmarks to ensure pay remains competitive within the industry and region. This step helps maintain alignment with market trends.

• Verify Pay Policies: Reassess internal compensation practices to confirm they follow objective criteria such as tenure, performance, or specialized skills. Adjust policies where gaps are found.

Consistent audits ensure compliance and provide a foundation for fair pay across the organization.

Train HR and Hiring Managers

Equip HR professionals and hiring managers with the knowledge to communicate pay ranges clearly and confidently. Their actions directly impact compliance with Hawaii's pay transparency requirements.

• Clarify Expectations: Train hiring teams to include accurate salary or hourly wage ranges in every job advertisement. Provide examples of compliant job postings to guide them.

• Teach Consistent Messaging: Establish a standard approach for discussing pay with candidates and employees. This reduces the risk of inconsistent or unclear communication.

• Prepare for Questions: Help managers confidently address inquiries about pay ranges or how compensation decisions are made within the company.

Training ensures that every team member involved in hiring or pay discussions understands their responsibilities under the law.

Document Compensation Decisions

Thorough recordkeeping supports compliance and provides transparency in how pay is determined. Proper documentation also protects employers in the event of pay-related disputes.

• Record Pay Ranges for Each Role: Maintain detailed records showing how salary or hourly ranges were calculated. Include market research, internal benchmarks, and job-specific criteria.

• Track Adjustments: Document all changes to pay, including raises, promotions, or role reclassifications. Note the reasons behind each adjustment.

• Standardize Recordkeeping: Use consistent formats to document pay decisions across departments, ensuring uniformity and accuracy.

Solid documentation practices build trust internally and safeguard the business against potential compliance issues.

Update Job Posting Templates

Review every job posting template to ensure compliance with Hawaii's pay transparency law. Templates should include clearly defined pay ranges for all advertised roles.

1. Insert Salary Ranges: Add a specific range for either the annual salary or hourly rate in a prominent section of each posting. For example, "Salary Range: $60,000 - $75,000 annually."

2. Ensure Consistent Formatting: Use the same structure for pay disclosures across all job postings to avoid confusion. Clarity is key.

3. Audit Existing Postings: Check all active job advertisements to confirm they include compliant pay ranges. Revise any postings missing required information.

Updating templates streamlines compliance and ensures every job posting meets legal standards from the start.

Frequently Asked Questions

Hawaii's pay transparency and equity state laws bring clarity to compensation practices while encouraging fairness across the workforce. Below are concise answers to common employer questions about coverage, compliance, and related labor regulations.

What is the pay equity law in Hawaii?

Hawaii's pay equity law works alongside pay transparency requirements to promote fair compensation for employees performing substantially similar work. This regulation ensures wages are determined based on job responsibilities, effort, and skills rather than personal characteristics like gender, race, or age.

Employers must base pay differences on legitimate factors such as seniority, measurable performance, or established production standards. This approach ensures that compensation practices remain consistent and equitable across roles with overlapping duties.

What is the Hawaii Senate Bill 1057?

Hawaii Senate Bill 1057, implemented on January 1, 2024, mandates that private employers with 50 or more employees disclose salary ranges or hourly wages in all job advertisements. This legislation applies to both internal and external job postings and aims to provide greater transparency for job seekers.

Key provisions of SB 1057 include:

• Employer Scope: Applies to organizations with at least 50 total employees, regardless of whether the workforce is located entirely in Hawaii.

• Pay Disclosures: Requires a clear numerical range for pay in every job listing, ensuring candidates understand compensation expectations at the outset.

• Exemptions: Excludes internal promotions, public employers, and businesses with fewer than 50 employees.

This legislation focuses on creating fairness and openness in hiring practices while addressing wage disparities across protected categories.

Does Hawaii's pay transparency law apply to remote job postings?

Hawaii has not explicitly addressed whether SB 1057 applies to remote job openings for positions performed entirely outside the state. However, employers advertising remote roles that could be filled by Hawaii-based candidates should include pay ranges to avoid compliance risks.

Employers can ensure consistency by incorporating pay disclosures into all remote job advertisements, particularly for positions that are open to applicants residing in Hawaii. Taking this approach demonstrates good faith and supports transparency across hiring practices.

What are the labor laws for salaried employees in Hawaii?

Hawaii's labor laws for salaried employees intersect with pay transparency regulations to ensure fair compensation and workplace equity. Employers must adhere to specific pay and reporting standards under the Hawaii Wage and Hour Law.

Key requirements include:

• Minimum Salary for Exemption: Salaried employees classified as exempt must earn at least $38,640 per year (as of 2024) to qualify for exemption from overtime pay.

• Overtime Pay: Non-exempt employees are entitled to 1.5 times their regular hourly pay for any hours worked beyond 40 in a single workweek.

• Payroll Frequency: Employers must issue paychecks at least twice per month and provide detailed records of hours, deductions, and wages for transparency.

By aligning pay ranges and compensation structures with Hawaii's broader labor laws, employers can maintain compliance and build trust with their workforce.

Navigating Hawaii's pay transparency and equity laws can be complex, but understanding the requirements is essential for maintaining compliance and fostering a fair workplace. We're here to support you in aligning your compensation practices with these regulations, ensuring you can attract and retain top talent while promoting trust and equity. Book a demo with GoCo today to learn how our platform simplifies compliance and empowers your organization to thrive.