Salary transparency laws are a relatively new phenomenon in the US—until Colorado enacted the 2021 Equal Pay for Equal Work Act, no US jurisdictions required businesses to disclose pay information to employees or the public.
Since 2021, eight additional states and multiple jurisdictions have passed similar laws. An increasing number of legislators and policy groups have also called for additional action, identifying wage secrecy as a contributor to both the gender pay gap and wage gaps affecting people of color—and citing a growing body of research showing that salary transparency can increase pay equity.
To stay compliant, business owners and HR teams need to understand and abide by current laws and plan for the likelihood of future salary transparency legislation.
Pay & Salary Transparency Laws by State
There are slight variations between pay transparency laws by state. Each state can adopt and enact its pay transparency policies, and the landscape frequently changes. Many states have enacted new laws in recent years, with some legislation still spending.
Some pay transparency laws by state region differ from the requirements enacted on a state level. The city in which an employer is based may have more of an impact on the specificities of the pay transparency law.
Jump to:
- California
- Colorado
- Connecticut
- Maryland
- Nevada
- Rhode Island
- Washington
- Illinois
- New York
- Ohio
- New Jersey
- Hawaii
Salary transparency laws in effect as of May 1, 2023
A salary transparency law is any law that requires companies to disclose salary information to employees, applicants, or state agencies.
As of May 1, 2023, eight US states (including Colorado, Connecticut, Maryland, Nevada, Rhode Island, Illinois, California, and Washington), five cities, and one county have pay transparency laws in effect. Here’s an overview of active pay transparency laws by state.
California
Legislation Title: CA SB 1162
Effective Date: January 1, 2023
Job posting requirements: If you have 15 or more employees and at least one employee in California, you are required to include pay scales in job postings.
Verbal or written disclosure: All California employers are required to disclose salary information for an employee’s position or an applicant’s targeted position on the employee’s or applicant’s request.
Other: California employers with 100 or more employees must also report pay data to the state’s Civil Rights Department. Required information includes the median, mean, and hourly rate by race, ethnicity, and sex for each job category.
Colorado
Legislation title: Equal Pay for Equal Work Act
Effective Date: January 1, 2021
Job posting requirements: Colorado law requires employers with at least one employee in the state to disclose salary ranges, benefits information, and a description of any other types of compensation (such as bonuses or commissions) in job postings. Note: The disclosure requirement does not apply if hiring takes place without a job posting.
Other: Employers must notify employees of promotional opportunities and keep job descriptions and wage rate records for the duration of the employee’s tenure plus two additional years.
Connecticut
Legislation title: CT HB 6380
Effective Date: October 1, 2021
Verbal or written disclosure: If you have at least one employee in Connecticut, you must disclose salary range for an applicant’s targeted position in the earliest of the following situations:
- On the applicant’s request
- Before you’ve discussed pay for the position with the applicant
- Before or when you make the applicant an offer of compensation
You’re also required to disclose information about pay range for an employee’s current position when an employee is hired, changes position, or requests the information.
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Maryland
Legislation Title: MD HB 123
Effective Date: October 1, 2020
Verbal or written disclosure: All Maryland employers must provide an applicant with a wage range for the applicant’s targeted position on the applicant’s request.
Nevada
Legislation Title: NV SB 293
Effective Date: October 1, 2021
Verbal or written disclosure: Nevada employers must provide salary information to applicants for the role they interview for. They must also disclose salary information to employees about the wage range for a promotion or transfer if they request it and meet at least one of the following conditions:
- The employee has applied for a promotion or transfer
- The employee has completed an interview for the promotion or transfer
- The employee has received an offer for a promotion or transfer
Rhode Island
Legislation Name: RI SB 270
Effective Date: January 1, 2023
Verbal or written disclosure: If you have at least one employee in Rhode Island, you’re required to disclose salary ranges for an employee’s current position or an applicant’s targeted position under the following conditions:
- On the applicant’s or employee’s request
- For applicants, before discussing an individual offer of compensation
- For employees, at the time of hire or when an employee moves into a new position
Washington
Legislation name: WA SB 5761
Effective Date: January 1, 2023
Job posting requirements: If you have 15 or more employees and engage in business in Washington or recruit for jobs that could be filled remotely by Washington-based employees, you must include salary information, a general description of benefits, and information about other compensation (such as bonuses, stock options, commissions, or relocation assistance) in job postings. Note: Washington prohibits employers from avoiding disclosure requirements by stating in job postings the employer will not accept Washington applicants.
Verbal or written disclosure: For internal transfers and promotions, employers must disclose salary information if requested by current employees.
Illinois
Legislation title: IL SB 1480
Effective Date: March 24, 2023
Other: Employers with 100 or more employees in Illinois must apply for an Equal Pay Registration Certificate by submitting pay and demographic data to the Illinois Department of Labor. Covered businesses must recertify every two years.
New York State Laws
Legislation title: SB 9427A
Effective Date: September 17, 2023
Disclosure Requirement: New York employers with four or more employees to disclose salary ranges for positions that can or will be performed at least partially in the state. This includes jobs that will be performed outside of the state but report to a supervisor, office, or other work site in New York.
New York regional laws
Legislation names:
- City of Ithaca Ordinance 2022 - 03
- New York City 2022 - Local Law No. 59
- Westchester County Amendment to Local Law 2022-119
Effective Dates:
- September 1, 2022 (City of Ithaca)
- November 1, 2022 (New York City)
- November 6, 2022 (Westchester County)
Job posting requirements:
- Ithaca. Employers with four or more employees in the City of Ithaca must publish salary ranges in job, transfer, and promotion postings.
- New York City. If you have four or more employees and at least one of them is in New York City, you are required to include salary ranges and benefits overviews in job listings for positions that can or will be performed in New York City (including remote jobs).
- Westchester County. Any employer posting for a job that can be performed in Westchester County (including a remote job) must disclose salary ranges in job listings.
Cincinnati, OH
Legislation Name: City of Cincinnati Ordinance No. 83 - 2019
Effective Date: March 13, 2020
Verbal or written disclosure: If you have 15 or more employees in Cincinnati, you are required to disclose salary range information to an applicant after extending an offer if the applicant also requests the information.
Jersey City, NJ
Legislation name: City of Jersey City Ordinance 22-026
Effective Date: April 13, 2022
Job posting requirements: If you have five or more employees in Jersey City and a place of business in Jersey City, you must disclose salary ranges and describe benefits in job, transfer, and promotion postings.
Toledo, OH
Legislation Name: Toledo Pay Equity Act
Effective Date: November 1, 2022
Verbal or written disclosure: Employers with 15 or more employees in Toledo must disclose a position’s salary range after extending an offer to an applicant if the applicant also requests the information.
Pending Pay Transparency Laws by State
As of May 1, 2023, three states have proposed or approved salary transparency laws that are not yet in effect. Here’s an overview of pending pay transparency laws by state.
New York
In December 2022, New York state passed SB 9427A, legislation that will require all private New York employers with four or more employees to disclose salary ranges for positions that can or will be performed at least partially in the state, including jobs that will be performed outside of the state but report to a supervisor, office, or other work site in New York. The law will go into effect on September 17th, 2023.
Note: New York law doesn’t specify whether the four-employee threshold refers to total employees or employees in the state.
Hawaii
Hawaii legislators have proposed a measure, SB 1057, that would require employers to disclose expected salary ranges in job listings and to update listings if a range changes before a hire is made. The legislation would also require employers to send employees an annual update on the salary range for their position and for similar roles.
Illinois
Illinois legislators have proposed a bill, HB 3129, that would require all companies with 15 or more employees to disclose salary ranges in job listings.
Note: Illinois law does not specify whether the 15-employee threshold applies to all employees or only to employees within the state.
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Separate but related: Salary history bans
Many jurisdictions have also passed salary history bans, either as a part of their pay transparency legislation or in a separate bill or ordinance. These bans prohibit employers from asking candidates about their salary history, and, in some cases, from using information about salary history to make an initial offer of compensation.
The following states have active salary history bans as of May 1, 2023: Alabama, California, Colorado, Connecticut, Delaware, DC, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan (state agencies), New Jersey, New York, Nevada, North Carolina (state agencies), Oregon, Pennsylvania (state agencies only), Rhode Island, Vermont, Virginia and Washington (state agencies).
Salary transparency best practices
If you have an employee in a state with an active pay transparency law, you may be required to disclose certain information to maintain business compliance. If you don’t, don’t assume you’re off the hook—laws change, and in some cases, even listing a job that could theoretically be performed by a remote worker in a jurisdiction with a salary transparency law can trigger compliance obligations. If you’re hiring remote employees, it may be safer to assume that pay transparency laws apply to you.
There may be cascading benefits to this approach, too. Pay transparency policies can build trust with employees, promote internal career growth pathways, and allow applicants to self-select based on pay requirements.
If you plan to adopt a salary transparency policy, these best practices can help.
- Create a job listing template. Create a standard templated section for job postings that your HR team can fill in with the necessary information for the role, such as salary range and benefits information. Using a template can ensure consistency and make sure that you don’t forget to post all required information.
- Adopt a consistent policy. If you have employees in multiple states, consider basing your company-wide policies on the most stringent salary transparency laws that apply to you. Applying the same policies to all employees can encourage equitable pay practices and allow you to hire the best people for your team (regardless of their state of residence).
- Create a guide for HR teams. Create a framework for your HR team and managers regarding salary discussions with employees who request information. Identify your minimum disclosure requirements as well as other information you’d like to include. Although you may only be required to disclose the salary range for an employee’s current position, sharing broader pay structure information can demonstrate trust and encourage open communication between employees and management teams.
- Evaluate your current compensation plan. Ask yourself what would happen if you immediately disclosed all salary information. Would your employees be happy? Do you have a pay structure that justifies compensation decisions? If so, you’re in a good position to adopt a salary transparency policy. If not, you may want to rethink your compensation plan through a pay equity and salary transparency lens. Although you shouldn’t necessarily cut a high-performer’s salary to level the playing field or immediately increase your total payroll obligations by 20%, making a plan to move towards a compensation structure you’re comfortable disclosing can set you up for a smooth transition.
- Be proactive. Don’t wait until salary transparency is an immediate concern for you. Even if you aren’t currently subject to salary transparency requirements, you may have (or soon have!) an employee in a state with upcoming legislation, hire a remote employee in a state with laws in effect, or publish a job listing that requires disclosure. Develop a communication plan and outline a pay transparency policy for your company so that when laws apply to you, you’ll be prepared.
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What Is Pay Transparency?
Pay transparency means openly discussing employee compensation within a company. The practice includes sharing salary ranges, pay structures, and even individual salaries in some cases.
These practices were once considered taboo — but now, pay transparency is becoming the norm. This shift is driven by new pay transparency laws (like those in California, Colorado, and New York) and changing workplace expectations. Employees want to know they’re being paid fairly and understand how their pay compares to others.
Pay transparency can take different forms. Some companies disclose salary ranges in job postings or provide current employees with access to salary information. Others go further, publicizing individual salaries or the company’s compensation strategy.
Pay transparency aims to build trust among employees while promoting pay equity. It can empower workers with the information they need to make informed career decisions.
What Are the Benefits of Pay Transparency?
Pay transparency offers many benefits for both employers and employees. Here are some of the pros:
Improved Company Culture
When companies are open about their pay practices, they are encouraged to examine their compensation strategy and address pay inequities. This effect can create a more fair and equitable workplace with more trust, boosting employee morale.
Transparency also aligns with the expectations of younger generations entering the workforce, who value openness and honesty.
Stronger Employee Retention
Employees who feel they are being paid fairly and understand the company’s compensation philosophy are more likely to stay. Pay transparency demonstrates fairness and shows employees that their contributions are valued. It also reduces uncertainty and speculation, which can lead to dissatisfaction.
Increased Pay Parity
Pay transparency helps address the gender pay gap and other pay disparities. By making compensation information available, companies can identify and rectify discrepancies, leading to more equitable pay practices. It also empowers employees to negotiate for fair pay and advocate for themselves.
Better Candidate Experience
Knowing the salary range upfront helps job seekers decide whether a position is a good fit. This effect leads to a more efficient hiring process and attracts candidates who are aligned with the company’s compensation philosophy.
Higher Productivity
Research suggests that pay transparency can boost employee motivation and productivity. When employees understand how their pay is determined and see a clear path for advancement, they are more likely to be engaged in their work.
What Are the Challenges of Pay Transparency?
While pay transparency offers many benefits, it also presents some challenges that companies must be prepared for:
Unhealthy Competition
Openly sharing salary information can sometimes lead to envy or resentment among employees. Companies should focus on individual growth and development to mitigate this effect and ensure fair and transparent performance review and promotion processes.
More Salary Negotiations
Pay transparency may lead to more employees wanting to negotiate their salaries. Companies must be prepared for these negotiations by having a clear compensation strategy and guidelines for salary discussions.
Implementation Issues
Implementing pay transparency requires careful planning and communication. Managers need training on how to discuss compensation with their teams and address employee concerns. Provide clear information about the company’s pay philosophy and how salaries are determined.
Potential Poaching
Companies with higher salaries may attempt to poach top talent from organizations that practice pay transparency. Therefore, companies should emphasize their unique culture, benefits, and career development opportunities.
Reduced Candidate Pool
Some job seekers may be discouraged from applying if the published salary ranges don’t meet their expectations. To counteract this, companies should ensure competitive compensation and highlight non-monetary benefits, such as flexible work arrangements or professional development opportunities.
How To Implement Pay Transparency
Implementing pay transparency requires a thoughtful and strategic approach. Here are five key steps to guide you:
Define Your Approach
Decide what pay transparency means for your company. Will you share salary ranges in job postings? Will you disclose pay structures to current employees? Consider your company culture and values when defining your approach.
Conduct a Pay Analysis
Analyze your current compensation data to identify any pay disparities or inequities. Look for inconsistencies in pay for similar roles and consider factors like experience, performance, and location. Address any discrepancies to ensure fairness and compliance with equal pay laws.
Use Objective Data
Base your salary decisions on objective criteria like market rates, experience, education, and performance. Benchmark salaries against industry standards and consider using tools like Payscale to make sure your compensation is competitive.
Secure Leadership Buy-In
Gain support from company leaders and managers. They will be instrumental in communicating the policy to employees and answering questions, so make sure they understand the benefits of pay transparency and are prepared to address any challenges.
Communicate Clearly
Clearly explain your pay transparency policy to employees. Train managers on how to discuss compensation and answer questions. Consider creating resources like FAQs or a pay transparency guide for employees.
But that’s not all. Here are some other tips you should consider when implementing pay transparency in your company:
- Include salary ranges in all job postings to attract the right candidates.
- Regularly benchmark salaries to make sure they remain competitive.
- Review and update your pay transparency policy as needed, especially if you expand to new jurisdictions or laws change.
- Consider using tools like Mosey to stay compliant with pay transparency laws across different states.
The Bottom Line
As pay transparency becomes the norm in business, companies must fully comprehend the pay transparency laws of the states and localities they operate in, as well as the pros and cons of this compensation strategy and how to develop an effective approach.
If you need a partner in corporate compliance, look no further than the team at Mosey. Our compliance management platform keeps track of up-to-date compliance issues affecting your business so you can focus on your mission instead. Schedule a demo of Mosey and discover how our expertise can elevate your operations.
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