Editor's Note
State Pay Transparency Resource
Pay equity is part of workplace fairness. Pay discrimination is prohibited by both federal and state laws. If you are paying anyone less than other people who do comparable work and there is a statistical correlation between lower pay and race, gender, or other protected factors, it's likely you have legal issues.
Pay transparency is part of pay equity, but there may or may not be requirements that apply to you other than don't discriminate in pay. In addition, pay transparency does not mean you have to publish everyone's pay on the internet or the company Slack. It's much narrower and usually relates to disclosing information about pay to people who are applying for jobs.
Pay transparency helps candidates and employees understand the pay for a specific job. It also gets applicants pay information earlier in the application process. This saves everyone time, resources, and a lot of frustration.
Salary history bans are part of pay transparency even though there's nothing transparent about them. The idea there is to prevent employers from asking candidates what they made at their last job, which helps prevent any pay discrimination by the old employer from moving into the new employer. It protects both employees and employers.
There are no federal pay transparency laws and I would not expect to see any for the foreseeable future. But states have been active in passing new pay equity and pay transparency laws, particularly in the past few years. This article provides a great summary and analysis of where we are with pay transparency and how to handle it if you have employees in multiple states.
- Heather Bussing
For multi-state employers, pay transparency requirements often get lost in the shuffle in the ever-changing landscape of federal, state, and local employment laws. A number of states, including California, Colorado, and New York, already have pay transparency laws which require some level of disclosure of employee compensation and salary ranges for job or promotional opportunities.
Additional states, including Illinois and Minnesota, recently passed similar laws which either went into effect at the beginning of this year or will take effect in the coming months. While coverage and disclosure requirements vary by state and can be complex, we have summarized some key provisions below.
New Pay Transparency Laws Effective in 2025
Illinois’ pay transparency law took effect on January 1, 2025. It applies to employers with 15+ employees anywhere, not just in Illinois. The law requires employers to disclose pay scale and benefits in job postings, including to third-parties engaged to promote those opportunities (such as Indeed). Covered employers must also disclose promotional opportunities to current employees within two weeks of posting the job externally.
Minnesota’s pay transparency law took effect on January 1, 2025. It applies to employers with 30+ employees in the state. It requires that starting “salary ranges” and a general description of benefits be included in job postings. Salary ranges may not be open-ended.
New Jersey’s law is scheduled to take effect on June 1, 2025. It applies to employers with 10+ employees that do business, employ persons, or take applications for employment within the state. The law will require hourly wages, salary ranges, and benefit information to be included in internal and external job postings. It will also require covered employers to make “reasonable efforts” to share opportunities for promotion to all current employees in the affected department(s) prior to making a promotion decision, unless the promotion is based on seniority, performance, or emergent needs due to an unforeseen event.
Vermont’s new law will take effect on July 1, 2025, covering employers with five or more employees, with at least one working in Vermont. Employers must post the expected fixed compensation or “range of compensation” in internal and external job postings. This applies to jobs that are both physically located in Vermont or remote positions which will predominantly involve work for an office in Vermont. Different rules apply for certain tipped or commission-based roles.
Finally, Massachusetts’ pay transparency law will take effect on October 29, 2025, and apply to employers with 25+ employees in the state. It will require covered employers to post pay ranges in job postings, provide pay range information to employees offered internal promotions and transfers, and provide such information to current employees upon request.
Ensuring Compliance with Pay Transparency Laws
Multi-state employers may already be covered under pay transparency laws in other places. For example, California’s pay transparency requirements apply to employers with 15+ employees anywhere, not just in California, provided at least one of them works in the state. Covered employers must disclose pay scale information for all job opportunities in California, as well as to current employees upon request, and require any third-parties posting their job opportunities to do the same.
Further, California prohibits employers from asking applicants about their compensation history or relying on an applicant’s salary history in determining what to offer them.
Currently, Colorado has perhaps the most complex pay transparency requirements, which apply to any employer with at least one employee in the state. Among other things, Colorado’s law requires covered employers to make “reasonable efforts” to post job opportunities (excluding “career progression” or “career development”) to current employees on the same date, with certain exceptions under the statute. Employers must also disclose pay range, general benefits and other compensation information, as well as application deadlines in external postings for any position that could be performed in Colorado—including fully remote opportunities which could be performed anywhere. After selecting a candidate, employers must also issue a notice, with specific information required under the statute, to employees with whom the candidate will work.
Like California, Colorado also prohibits employers from asking candidates about their salary history or relying on their salary history in making an offer.
Maryland, Nevada, Rhode Island, Connecticut, Hawaii, New York, Washington, and the District of Columbia also have statewide pay transparency laws with varying coverage. Ohio has more limited local pay transparency requirements in Cincinnati and Toledo, which apply after an applicant with a conditional job offer has made a reasonable request for pay scale information.
Key Takeaways for Employers
Given the complexity of these evolving state and local pay transparency requirements, multi-state employers are encouraged to review their recruiting, hiring and pay practices and consult with employment counsel to ensure compliance.
