Pay Transparency: Definition and Laws by State

Pay transparency is gaining momentum in the US. A mere five years ago, these laws were limited to a handful of states; as we stand in 2023, you’d run out of fingers to count them all.

With its mission to bridge wage gaps and foster workplace fairness, pay transparency is undoubtedly a worthy cause. But for employers, the path to compliance often feels like a winding road filled with complex twists and turns. These laws, residing at the state level until a nationwide act is passed, present a unique set of challenges as there isn’t a one-size-fits-all approach to compliance across states.

Bearing these complexities in mind, let’s unravel these laws, their effects on employers, and the practical solutions suggested by legal expert Brooke Davis and HR specialist Linda Shaffer.

Table of Contents

• What Is Pay Transparency Law?
• Pay Transparency Laws by State and Region
• Tips on How to Stay Compliant
• Remain Current

What Is Pay Transparency Law?

Pay transparency laws are a general term coined for acts that:

• Require employers to disclose to job applicants and employees pay-related information, including pay system processes and salary ranges;
• Prohibit employers from using prospective employees’ salary histories to determine pay;
• Ensure employees’ rights to discuss their salaries openly.

These laws aim to create accountability for employers, help employees make better career decisions based on personal financial considerations, and, most importantly—minimize pay gaps and establish pay equity.

Although numerous states and cities have enacted pay transparency laws, the details of the requirements vary from region to region. Check below to see how pay transparency requirements apply to your region.

Pay Transparency Laws by State and Region

California

Overview

• Law: Senate Bill 1162
• Effective date: January 1, 2023
• Applicable to: Any in-state employers

Requirements

• Must disclose pay ranges to current employees upon request
• Must NOT ask job applicants about wage history
• Must keep records of job title and wage rate histories for all employees for inspection by the DLSE
• Employers with < 15 employees must disclose pay ranges to job applicants upon request
• Employers with ≥ 15 employees must disclose pay ranges in all job postings
• Employers with ≥ 100 employees must submit annual pay data reports to the CRD

Violation Consequences

• Absence of report submission: Injunction from CRD; civil penalty of up to $100 per employee for a first violation ($200 for a subsequent violation)
• Approved claim from the State Labor Commissioner: Civil penalty of between $100 and 10,000

Colorado

Overview

• Law: The Colorado Equal Pay for Equal Work Act (EPEWA)
• Effective date: January 1, 2021
  • Updates effective Jan. 1, 2024
• Applicable to: Any employer in Colorado OR with employees in Colorado

Requirements

• Must disclose compensation (including benefits) in all job postings
• Must announce, post, or make known all opportunities for promotion to all current employees on the same calendar day
• Must keep records of job descriptions and wage rate histories for all employees during employment and for two years after employment termination
• Must NOT ask job applicants about wage history

Violation Consequences

• Civil lawsuit from aggrieved individual: Civil penalty of between $500 and $10,000 per violation

Connecticut

Overview

• Law: Public Act 21-30
• Effective date: October 1, 2021
• Applicable to: Any employer within the state using the services of one or more employees for pay

Requirements

• Must NOT forbid employees from asking, sharing, or speaking openly of own/others’ wage information
• Must disclose pay ranges to job applicants either upon request OR prior to/at the time they are made an offer of employment
• Must disclose pay ranges to employees upon hiring, changing positions, or at the employee’s first request

Violation Consequences

• The civil lawsuit from aggrieved individual: Compensatory damages, attorney’s fees and costs, punitive damages, other reliefs

Hawaii

Overview

• Law: SB 1057
• Effective date: January 1, 2024
• Applicable to: Any employer with 50 or more employees

Requirements

• Must include a salary range or hourly wage rate in job postings
• Must provide equal pay for substantially similar work (instead of simply requiring them to provide equal pay for equal work)
• Prohibit wage discrimination against any “protected category listed in section 378-2(a)(l)“, whereas they formerly prohibited only gender-based wage discrimination

Violation Consequences

• File a complaint with the Hawaii Civil Rights Commission (HCRC): Civil action for compensatory and punitive damages, plus costs.

Illinois

Overview

• Law: HB 3129, expands the Illinois Equal Pay Act (IEPA)
• Effective date: January 1, 2025
• Applicable to: Any employer with 15 or more employees

Requirements

• Must use the previously determined salary range for the position, the actual salary range of employees currently holding the position, or the budgeted amount for the position
• Must provide a general description of the applicable benefits and other compensation
• Must NOT seek the job applicant’s wage and compensation history or use this information when screening the applicant for a job position

Violation Consequences

• File a complaint with the Illinois Department of Labor (IDOL) within one year from the date of the relevant violation:
  • Fines of up to $500 for a first offense.
  • Fines of up to $2,500 for a second offense.
  • Fines of up to $10,000 for a third or subsequent offense.

Maryland

Overview

• Law: House Bill 123
• Effective date: October 1, 2020
• Applicable to: Any in-state employer

Requirements

• Must disclose pay ranges to job applicants upon request
• Must NOT retaliate against job applicants for not providing wage history
• Must NOT rely on job applicant’s wage history to determine wage (except as voluntarily provided)
• Must NOT seek job applicant’s wage history from former employers or agents

Violation Consequences

• Approved claim from the State Labor’s Commissioner: Civil penalties of up to $300 for each job applicant for a second violation; up to $600 for subsequent violations within 3 years

Nevada

Overview

• Law: Senate Bill 293
• Effective date: October 1, 2021
• Applicable to: Any in-state employer and agency

Requirements

• Must disclose pay ranges to job applicants after the interview
• Must NOT rely on job applicant’s wage history to determine wage, except as voluntarily provided

Violation Consequences

• Fines of up to $5,000 per violation
• Civil lawsuit from aggrieved individual: Compensatory damages, attorney’s fees, and costs, punitive damages, other reliefs

Jersey City, NJ

Overview

• Law: Ordinance 22-026
• Effective date: April 13, 2022
• Applicable to: Any employer with a principal place of business in Jersey City OR any employer ≥ 5 employees who are within Jersey City

Requirements

• Must include 1) minimum and maximum base salary/hourly wage and 2) job benefits in job postings

Violation Consequences

• Fines of up to $2,000

Ithaca, NY

Overview

• Law: Ordinance 2022-03
• Effective date: September 1, 2022
• Applicable to: Any job position for which the standard work location is in Ithaca, unless the position is temporary OR the employer of the position has < 4 employees

Requirements

• Must include minimum and maximum pay ranges in advertisements for jobs, promotions, or transfer opportunities

Violation Consequences

• Unspecified

New York City, NY

Overview

• Law: FARE Grant
• Effective date: September 17, 2023
• Applicable to: Any employer in New York City with ≥ 4 employees (including the owner) or ≥ 1 domestic worker

Requirements

• Must include minimum and maximum pay ranges in advertisements for jobs, promotions, or transfer opportunities
• Must include a written description of the job, but only if a description exists

Violation Consequences

• Fines up to $1,000 for a first violation
• Fines up to $2,000 for a second violation
• Fines up to $3,000 for a third and subsequent violations

Westchester, NY

Overview

• Law: Local Law 119-2022
• Effective date: November 6, 2022
• Applicable to: Any employer with work performed within the county

Requirements

• Must include minimum and maximum pay ranges in advertisements for jobs, promotions, or transfer opportunities
• Must NOT rely on job applicant’s wage history to determine wage
• Must NOT seek job applicant’s wage history from former employers or agents, unless having obtained written authorization from a job applicant in order to justify a higher wage than that offered by the employer
• Must NOT retaliate against job applicants for not providing wage history

Violation Consequences

• The civil lawsuit from an aggrieved individual: Compensatory damages, attorney’s fees and costs, punitive damages, other reliefs
• Civil penalties of up to $125,000 ($250,000 for intentional violations)

Cincinnati, OH

Overview

• Law: Prohibited Salary History Inquiry and Use
• Effective date: March 13, 2020
• Applicable to: Any employer located in the city with ≥ 15 employees

Requirements

• Must disclose pay ranges to job applicants upon request
• Must NOT seek job applicant’s wage history from former employers or agents
• Must NOT screen job applicants based on their wage history
• Must NOT rely on job applicant’s wage history when determining wage, offering employment, or negotiating employment contract
• Must NOT retaliate against job applicants for not providing wage history

Violation Consequences

• The civil lawsuit from an aggrieved individual: Compensatory damages, attorney’s fees, and costs, punitive damages, other reliefs

Toledo, OH

Overview

• Law: Pay Equity Act (Ordinance 173-19)
• Effective date: June 25, 2020
• Applicable to: Any employer located in the city with ≥ 15 employees

Requirements

• Must disclose pay ranges to job applicants upon request
• Must NOT seek job applicant’s wage history from former employers or agents
• Must NOT screen job applicants based on their wage history
• Must NOT rely on job applicant’s wage history when determining wage, offering employment, or negotiating employment contract
• Must NOT retaliate against job applicants for not providing wage history

Violation Consequences

• The civil lawsuit from an aggrieved individual: Compensatory damages, attorney’s fees, and costs, punitive damages, other reliefs

Rhode Island

Overview

• Law: Senate Bill 270
• Effective date: January 1, 2023
• Applicable to: Any employer located in-state

Requirements

• Must disclose pay ranges to job applicants upon request/prior to discussing pay
• Must disclose pay ranges to current employees upon request
• Must NOT forbid employees from asking, sharing, or speaking openly of own/others’ wage information
• Must NOT rely on job applicant’s wage history when determining wage, offering employment, or negotiating an employment contract

Violation Consequences

• Civil penalties between $1,000 and $5,000

Washington

Overview

• Law: Washington Equal Pay and Opportunities Act
• Effective date: January 1, 2023
• Applicable to: Any employer located in the state with ≥ 15 employees

Requirements

• Must disclose compensation (including benefits) in all job postings
• Must disclose pay ranges for employees offered an internal transfer
• Must NOT retaliate against employees for inquiring, sharing, or speaking openly of own/others’ wage information
• Must NOT seek job applicant’s wage history from former employers or agents, except as voluntarily provided OR after making an offer of employment
• Must NOT rely on job applicant’s wage history when determining wage, offering employment, or negotiating employment contract

Violation Consequences

• Civil lawsuit from aggrieved individual: Compensatory damages, attorney’s fees and costs, punitive damages, other reliefs

Pay Transparency Laws by State and Region: An Overview

Tips on How to Stay Compliant

Pay transparency laws present distinct challenges for employers of all sizes, especially those recruiting across state lines or in the remote work context. When promoting a remote position, it’s vital that the listing complies with all pertinent pay transparency laws.

Furthermore, employers cannot exclude residents of a particular locale or state from an advertised position. There have been attempts from employers to exclude Colorado applicants from applying remote positions, and Colorado’s Department of Labor and Employment has explicitly rejected such attempts to skirt its laws. Employers should expect similar enforcement actions in other jurisdictions.

While adapting to pay transparency could seem intimidating, here are some tips from business lawyer Brooke Davis and HR expert Linda Shaffer from Checkr to help you stay compliant:

• Provide ongoing training. Train managers and staff on pay transparency laws, fair compensation practices, and bias awareness. Equip them with the skills to effectively communicate about compensation and handle salary negotiations in a compliant and fair manner.
• Establish a fair and consistent pay structure. Develop job levels, salary ranges, and criteria for determining compensation based on factors like experience, skills, and performance. Tie compensation to performance by implementing performance evaluation systems and offering bonuses or incentives based on objective criteria. This approach considers individual contributions and helps justify salary differences.
• Document salary decisions. Maintain thorough records of salary decisions, including the rationale behind each decision.
• Be smart and consistent with your job ads. Rather than trying to distribute different job postings in different locations to control the dissemination of information by using different salary ranges, include salary information in all job postings. Moreover, consider sharing salary ranges instead of specific figures in job postings or during initial discussions.
• Highlight total compensation. Unless the pay transparency laws of Washington or Colorado (which ask employers to disclose both salary ranges and job benefits) apply to you, consider modifying your compensation structure to include variable compensation components (i.e., bonuses) that are excluded from the required disclosure. Emphasize the overall compensation package and the value of benefits, bonuses, stock options, retirement plans, and other perks to demonstrate the comprehensive nature of the offer.
• Conduct internal pay reviews. Regularly review your internal pay practices to identify and resolve potential disparities or biases and ensure that compensation aligns with your established pay structure.

Remain Current

The trend of implementing pay transparency seems unavoidable. While this could mean additional challenges for employers, it’s a chance to realign with the law’s aim – pay equity. With appropriate employment documents, creating an environment that supports open conversations about compensation becomes more manageable, helping employers stay updated and compliant.