News and Information

Hawaii Employers: What Is Your Pay Equity Picture?

The Equal Pay Act of 1963 aimed to eliminate the gender pay gap by requiring employers across the country to pay equal wages to men and women in the same establishment who perform jobs that require substantially equal skill, effort and responsibility, under similar working conditions. Fifty-five years later, there are still a few states without equal pay laws, and even where laws are in place, the gap still exists

A growing number of states and municipalities across the country seeking to disrupt the cycle of wage inequality are revising pay equity laws by:

• enacting salary history inquiry bans, with varying restrictions (for example, some bans apply only to public employers, some allow employers to consider salary history if an applicant voluntarily discloses it, and one requires employers to disclose the pay range for the position the applicant is applying for); or
• expanding the scope to include race and ethnicity, to include employees statewide (or at least beyond the employer’s establishment); or
• broadening the definition of comparable work.

Effective January 1st, 2019, Hawaii’s amended pay equity law (SB 2351) prohibits employers from asking a job applicant about his or her salary history or relying on it in determining salary and other employment benefits, nor can employers research public records to ascertain salary history. However, an employer may consider (and verify) salary history volunteered by the applicant. In addition, employers may not prohibit employees from disclosing their wages to each other; this measure is designed to eliminate wage secrecy, which undermines efforts to close the pay gap.

What should Hawaii employers do?

• Revise your employment application forms and hiring process to eliminate any questions about salary history. You may replace questions about salary history with questions about salary expectations.
• Train employees involved in the hiring process on the amended law.
• Consider conducting a compensation analysis to establish a point of reference for your company’s overall pay status and identify any existing pay disparities.

For a broader perspective of employment in Hawaii, a workforce analysis released in 2018 by the State of Hawaii of Business, Economic Development and Tourism (DBEDT) Department provides some context. According to “Hawaii’s Working Population: An Analysis by Industry 2012-2016”:

• Pay and occupation by gender:
  • Male to female ratio in Hawaii’s workforce was 51.9% male to 48.1% female. The state average earning for male workers was $51,566, compared to $38,645 for female workers. Male workers earned more on average than females in all industries surveyed except Agriculture, Forestry Fishing & Hunting.
  • Healthcare & Social Assistance had the largest share of female workers (73.3% females to 26.7% males) but females on average earned less than males ($48,434 compared to $79,104).
  • Accommodation & Food Services was the most evenly distributed, with 50.3% male workers and 49.7% female workers; average earning for females ($27,426) was still less than for males ($33,649).
• Pay and occupation by race:
  • Native Hawaiian alone: Represented majority of Construction industry at 10.7%, earning an average $40,096 (compared to White alone workers at 7.5% earning $59,661)
  • Asian alone: Represented majority of Accommodation & Food Services industry at 16.5%, earning an average $30,430 (compared to White alone workers at 9.6% earning $37,451)
  • Other including Mixed: Represented majority of Retail Trade industry at 12.7%, earning an average $28,639 (compared to White alone workers at 9.4% earning $37,308)
  • White alone: Represented majority of Public Administration industry at 10.8%, earning an average $63,698, but highest average earning across all industries was in Professional, Scientific & Technical Services at $76,898.
• Pay and occupation by age:
  • Baby Boomers (born 1946-1964): Represented the greatest share of Agriculture, Forestry, Fishing & Hunting, and earned the highest average pay ($45,310) among all age groups in this industry.
  • Generation X (born 1965-1980): Represented the greatest share of Utilities, and earned average pay of $72,991, slightly less than Baby Boomers, who earned $73,618 in this industry.
  • Millennials (born 1981-1988): Represented the greatest share of Retail Trade, and earned average pay of $23,071, the lowest average of all age groups in this industry.

View the complete report on the DBEDT site.