News & Events

New Connecticut Law Prohibits "Pay Secrecy"

Submitted By Firm: Day Pitney LLP

Contact(s): Francine Esposito, Glenn W. Dowd, Patrick J. McCarthy

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Date Published: 7/7/2015

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On July 2, Gov. Dannel P. Malloy signed into law Public Act No. 15-196, titled "An Act Concerning Pay Equity and Fairness" (the "Act"). The Act was originally introduced by Gov. Malloy and was designed to narrow the wage gap between men and women in Connecticut's workforce by halting "pay secrecy" – a practice the Connecticut Legislature identified as "hinder[ing] pay discrimination from being pinpointed." The Act encourages wage transparency by permitting employees to voluntarily discuss their wages with other employees and/or with third parties. The Act is effective on the date it was signed by the Governor.

Prohibitions Under the Act

The Act applies to all Connecticut employers, regardless of size. Under the Act, employers shall not:

  1. Prohibit an employee from disclosing or discussing the amount of his or her wages or the wages of another employee of the employer that have been disclosed voluntarily by the other employee; 
  2. Prohibit an employee from inquiring about the wages of another employee of the employer;
  3. Require an employee to sign a waiver or other document that denies the employee his or her right to disclose or discuss the amount of his or her wages or the wages of another employee of the employer that have been disclosed voluntarily by the other employee; 
  4. Require an employee to sign a waiver or other document that denies the employee his or her right to inquire about the wages of another employee of the employer; 
  5. Discharge, discipline, discriminate against, retaliate against or otherwise penalize any employee who discloses or discusses the amount of his or her wages or the wages of another employee of the employer that have been disclosed voluntarily by the other employee; or
  6. Discharge, discipline, discriminate against, retaliate against or otherwise penalize any employee who inquires about the wages of another employee of the employer.

The Act defines wages as "compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation." The definition of "wages" contained in the Act mirrors the definition found throughout Connecticut wage and hour laws. See e.g., Conn. Gen. Stat. § 31-71a(3). The definition of "wages" under those laws has been interpreted broadly and generally includes nondiscretionary bonus payments, but generally does not include discretionary bonuses or severance payments.

Voluntary Disclosure

The Act provides that the disclosure of an employee's wages must be voluntary. The Act does not require any employee to disclose or discuss his or her wages, but it protects any employee who voluntarily elects to make such disclosure or inquiry of another employee. Similarly, employers are not required to disclose the amount of wages paid to an employee.

Overlap With Federal Law

Section 7 of the National Labor Relations Act (NLRA) guarantees employees, whether unionized or not, the right to engage in "concerted activities for mutual aid or protection." The National Labor Relations Board (NLRB) interprets this provision to provide two or more employees the right to discuss their pay and wages. Under Section 8 of the NLRA, employers are prohibited from "restraining" an employee's right to engage in "concerted protected activity" under Section 7, and employers also are prohibited from retaliating against employees for exercising those rights. See e.g., Alternative Energy Applications, Inc., 361 NLRB slip op. 139 (Dec. 16, 2014). Similar to this interpretation of the NLRA, the Act statutorily permits employees in Connecticut to discuss, disclose or inquire about their or other employees' wages.

Additionally, under federal laws such as the Equal Pay Act of 1963 and the Lilly Ledbetter Fair Pay Act of 2009, employers are prohibited from engaging in discriminatory compensation practices based on gender between employees who are performing substantially similar work.

Private Right of Action

The Act provides employees in Connecticut with a private right of action. Employees may file a complaint alleging a violation of the Act in any court of competent jurisdiction. The language of the Act appears to contemplate collective or multiple-plaintiff lawsuits, as it states any action brought for violation of the Act "may be maintained . . . by any one or more employees."  Employers found in violation of the Act's prohibitions may be subject to significant damages, including compensatory damages, punitive damages, attorney fees and costs, and other legal and equitable relief. Any action alleging a violation of the Act must be brought within two years of the alleged violation.

Awareness and Compliance

As noted above, the Act became effective on July 2. Employers should immediately notify their legal, human resources and supervisory personnel of the new prohibitions under the Act and review their handbooks, contracts and policies in order to ensure compliance.

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Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

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Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

Stephen HirschfeldAs an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

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Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

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Vice President, Human Resources

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Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

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Former Senior Director of Human Resources

Rich Products

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Roberts-Gordon LLC

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