A new Delaware pay transparency law is set to take effect on September 26, 2027. It requires employers to disclose compensation ranges and benefit information in job postings. Aimed at promoting fairness and wage equity in the workplace, the law introduces several key compliance obligations for businesses with more than 25 employees.
Under the new requirements, employers must include the hourly or salary compensation range for both internal and external job postings. This compensation range must be established in good faith, meaning it should reflect either the actual pay of current employees in similar roles or the budgeted amount for the position. Employers must also provide a general description of benefits offered for the role, ensuring that job candidates are fully informed.
There are some exceptions to these requirements. Commission-based jobs are not required to list a specific pay range, but employers must clearly disclose compensation is commission-based. Similarly, tipped positions must list the base wage and indicate tips are a component of the total compensation. Jobs covered by a Collective Bargaining Agreement (CBA) must include the compensation or range that has been approved in accordance with the CBA. Temporary, interim, or acting positions requiring immediate hiring are exempt from the compensation and benefits disclosure requirements. However, the Delaware Department of Labor (DOL) retains authority to issue regulations specific to these types of roles.
To ensure long-term compliance, employers will also need to maintain records of job descriptions and wage rates for each employee throughout their employment and for three years after termination. This recordkeeping will be essential for any potential audits or investigations carried out by regulatory agencies.
Employers who violate the law could face penalties of up to $10,000 per infraction. The law does not allow for a private cause of action, meaning all enforcement will be carried out by the DOL, which has the authority to investigate complaints and impose penalties.
The law also includes anti-retaliation protections. Employers are prohibited from retaliating against employees or applicants who exercise their rights under the law. This includes filing a complaint, cooperating with a DOL investigation, or participating in legal proceedings enforcing the law.
As the effective date approaches, businesses are advised to audit current compensation practices and review job listing procedures to ensure they meet the upcoming requirements. This includes setting up systems to document and maintain accurate job descriptions and compensation records. Taking proactive steps in advance can help employers avoid costly penalties and ensure compliance when the law takes effect in 2027.
By requiring pay transparency and setting clear expectations for employers, Delaware’s legislature hopes to take a significant step forward in closing pay gaps and creating more equitable workplaces.
Brody and Associates regularly advises management on compliance with the latest local, state and federal employment laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.
