Editor's Note
The Point of Pay Transparency
Talking about money and especially our own pay is still awkward for a lot of us. This is often a social class issue as much as a pay transparency issue.
When we grow up without much money, it's weird and unusual to know anything about 401K accounts, investing, or assessing risk tolerance on returns. It's hard to even save money when you're just trying to get the bills paid and everyone fed regularly. That's the reality for many of us, even those who have been working for a long time.
When employees become managers and leaders, they may learn more about compensation and benefits. But that doesn't mean they're comfortable educating others, especially when they're still figuring it out themselves.
In contrast, those who grew up with wealth or at least comfortable finances often don't learn how to talk about money either because they don't have to think about it much. Sometimes, it's all handled by other people.
We have real financial literacy issues in our culture.
At the same time, money is a proxy for so many things that matter—status, power, access to resources, how the culture values you, and even what you can get away with and what you can't. The rules are different for people depending on their wealth. All of this makes us uncomfortable for a million reasons that are probably better discussed in therapy than at work. But here we are.
At work, pay transparency is a great place to start.
Pay transparency is part of pay equity. Pay equity should not be controversial. Most people can get on board with the concept that if two people are doing comparable work, they should be paid the same regardless of who they are, what they look like, or their personal backgrounds.
The employment relationship is based on the employer and employee agreeing on what the work is and what the pay for the work is. In order to agree to anything, people need to understand what's involved and the reality of what they are agreeing to.
When employers aren't forthcoming about either the work or the pay, then everything goes sideways fast. When employees discover that reality does not conform to their expectations, trust goes out the door. Employees become anxious and distracted worrying about what else they don't know. They spend time protecting themselves instead of doing their best work.
They also spend time looking for a new job. Then they leave. And replacing employees is expensive in the cost of recruiting, training, productivity losses, and employee engagement and morale.
Pay transparency helps all of these areas. When candidates understand how much a job pays from the beginning, they only apply to the jobs with pay that works for them. That saves everyone time and effort. When employees are paid fairly, they are less likely to be looking to leave and stay longer. When employees stay, they build skills, institutional knowledge, become mentors, get really good at what they do, and teach others. What's not to love?
The point of pay transparency is that it helps everyone understand what they're getting into and assures everyone that it's fair. Sure, there's legal stuff to consider. But it's the practical stuff that really matters.
Here's a nice update on new state pay transparency laws coming into effect this summer.
- Heather Bussing
Pay transparency is quickly becoming a major focus in the U.S. While there is no comprehensive federal pay transparency law in the U.S., states and municipalities have been implementing a variety of laws designed to address wage gaps, boost equality, and increase accountability in hiring practices. The trend is expanding, and as we move into summer, more states have regulations that are set to take effect and will have a significant impact on employers and job-seekers alike.
In addition to the new laws going into effect that are addressed below, employers should actively monitor pay transparency developments in their states of operation to ensure compliance, as the trend is likely to continue spreading across the country.
What Are Pay Transparency Laws?
Pay transparency laws generally require employers to disclose salary ranges, compensation details, and benefits in external and internal job postings, at a specified point during the hiring process, and/or when employees request such information. In some cases, they also prevent employers from asking candidates about their salary history or discriminating against applicants who decline to provide such information. These laws are part of broader efforts to reduce discrimination with respect to wages based on gender, race, or other impermissible factors and to ensure fairness in hiring and compensation processes.
The idea is simple: If everyone knows what the pay range is for a role, employers are held accountable for their compensation structure, and pay disparity practices are less likely to be perpetuated. Additionally, workers are better equipped to negotiate a fair wage and make informed decisions about job opportunities. Employers can also benefit from being required to take a closer look at their compensation schemes because they may uncover existing roadblocks with respect to offering competitive compensation packages and can benchmark their pay practices against competitors that will also be required to disclose compensation and benefits information in public postings.
Pay Transparency Landscape to Date
Between 2021 and 2024, several states have led the charge of implementing pay transparency laws, including Colorado, Connecticut, California, New York, D.C., Hawaii, Washington, Nevada, Maryland, Rhode Island, and Vermont. A few other states, such as Illinois and Minnesota, implemented laws that took effect as recently as January 1, 2025. These laws vary in scope, but the central theme remains the same: provide clear accessible pay information to promote equity in the workplace.
Pay Transparency Laws in 2025: Key State Updates
The trend of adopting pay transparency laws is gaining momentum, and several states are ramping up their pay transparency efforts. Of note, some local municipalities are even enacting pay transparency legislation, such as cities in New York and Ohio. Employers must remain diligent in tracking these state and local developments and adapting their pay practices accordingly. The summer and fall of 2025 will see a few new pay transparency laws taking effect. Here’s a look at some of the key developments:
New Jersey: New Jersey Wage Transparency Act
Beginning June 1, 2025, the New Jersey law will require employers with 10 or more employees that do business in or employ people in New Jersey to disclose specific pay information. Covered employers must provide the hourly wage or salary range in any new job postings, including internal transfer opportunities, and must also describe the benefits and compensation programs available to employees. Employers that fail to comply with the new law could face civil penalties ranging from $300 to $600 per violation.
Vermont: An Act Relating to Disclosure of Compensation in Job Advertisements
Effective July 1, 2025, Vermont’s law will require all employers with five or more employees — at least one of whom works in the state — to disclose compensation details in job advertisements. This applies to both positions located in Vermont and remote positions primarily working for Vermont-based offices. Employers must include the good faith minimum and maximum salary or hourly wage range for every job posting, whether for new hires or internal promotions. There are also specific provisions for commissioned or tipped roles as well.
Massachusetts: Massachusetts Act Relative to Salary Range Transparency
On October 29, 2025, Massachusetts will implement a pay transparency law which requires employers with 25 or more employees in the state to disclose pay ranges for all job postings, and the pay range for the position must be included in the job posting itself. Additionally, employers must provide the pay range to employees who are offered a promotion or transfer to a new role. Employees will also be able to request the salary range for their current position or any position they are applying for.
Looking Ahead: A National Movement?
As of November 2025, about 15 states will have pay transparency laws, and the pay transparency law trend is likely to continue expanding. Employers will need to stay proactive in adjusting their hiring and compensation strategies to ensure compliance, which will likely include reviewing pay equity practices and updating internal systems for salary disclosures.
In the coming years, pay transparency laws are expected to reshape the way both employers and workers think about compensation, making workplaces more equitable and ensuring that workers are paid fairly for their work.
With more states taking action, pay transparency is no longer just a buzzword — it’s becoming a cornerstone of the fight for fair pay and workplace equality. Further, given the momentum, states may begin introducing stronger enforcement mechanisms, such as fines, legal action, or loss of business contracts with the state, making compliance even more important as we move forward.
