In the last several years, there’s been an increase in focus on the gender and racial pay gap, both internationally and domestically. Despite the growing attention on the pay gap, it’s taken considerable time for companies to be open and honest about worker compensation.
Quite a few states have codified some level of pay transparency into their legal frameworks. Some cities or localities have also enacted pay transparency laws, even if they’ve not been rolled out on a state level. Here’s the most up-to-date overview of which states have done so and some facts behind the initiatives.
California: A new law enacted on Sept. 27, 2022 will require nearly 200,000 companies to be upfront about employee compensation, starting Jan. 1st, 2023. Employers with more than 15 employees must include a pay range in their job descriptions, and companies with more than 100 employees must disclose their payroll data to the Business, Consumer Services, and Housing Agency of California.
Businesses must keep this payroll data for all employees while they are employed and for three years after their employment ends. If companies do not comply, they face an investigation from the Labor Commissioner and potentially an additional fine.
The state has already mandated wage equality and the prohibition of retaliation for wage discussions, thanks to the Equal Pay Act and the Fair Pay Act in 2015.
Colorado: Colorado enacted their Equal Pay Act in 2019, which bans employers from basing wages on prior salaries and retaliating against employees who discuss or inquire about wages.
The act also requires employers to disclose salary, benefits, and advancement opportunities for each job opening, except for those out of state. If businesses refuse to comply, they will face an investigation and fines between $500 to $10,000 for each violation.
The results of this act vary; according to data from Aug. 2022, the labor force participation rate in Colorado increased by 1.5%, but the number of job postings (via Indeed) fell 8.2%. The law has also led to some companies excluding Colorado residents from applying to remote positions.
Connecticut: Since Oct. 1, 2021, the state of Connecticut has required employers to disclose wages upon applicant or employee request since the Act Concerning the Disclosure of Salary Range for a Vacant Position was signed into law on June 7, 2022. The act also prohibits employers from asking about past wages or retaliating against employees who have discussed compensation.
The act applies to all employers within the state that have at least two employees, even if their employees work remotely. If employers fail to follow the act, employees may sue the company for up to two years afterwards and receive compensatory damage, attorney’s fees, and punitive damages. Other consequences for noncompliance are not specified.
Maryland: Effective Oct. 1, 2020, Maryland amended their Equal Pay for Equal Work Act, requiring employers to disclose the wage range for an open position upon request from the applicant.
Regarding the state’s equal pay laws, the Department of Labor says the law applies to every employer in Maryland and prohibits discrimination of all employees. While employers can’t ask employees to not discuss their wages, they can limit the time, day, and manner of these discussions.
Nevada: Senate Bill No. 293 requires all employers within the state to offer a wage or salary range to applicants after an interview, effective Oct. 2021. The bill also specifies that employers must provide salaries for promotions or transfers, if necessary, and may ask about applicant expectations for their pay. However, employers cannot use past salary rates to determine salary offerings or discriminate against certain applicants.
Similar to other pay transparency laws, companies cannot retaliate against an employee if they exercise their rights listed within the law in question. If someone feels their employer has violated the law, they can file a complaint and, after 180 days have passed, file a right-to-sue notice. The company may also have to pay a $5,000 fine.
Interestingly, the law does not apply to certain religious institutions, tax-exempt organizations, and businesses or enterprises near an Indian reservation. The text does not specify what types of businesses are included in these exemptions.
New Jersey: The state at large does not have any pay transparency laws; however, Jersey City does have a pay transparency law, as listed below:
Jersey City: the city council passed a pay transparency ordinance in April 2022 that requires Jersey-City-based employers with more than three employees to post salary or hourly wage ranges. This notice only applies to businesses who had their primary location in Jersey City and who used print or digital media within the city to advertise job vacancies.
In June 2022, the city released another ordinance that amended the original, requiring any employer with five or more employees within Jersey City (including independent contractors) to post wages.
New York: The state of New York has a Labor Law dedicated to equal pay and the discussion of wages, but so far, the bill requiring employers to disclose compensation has not become law.
The following locations within New York have pay transparency guidelines:
New York City: Starting Nov. 1, 2022, all employers who post a job opening, promotion, or transfer opportunity in NYC must include a salary range. All jobs, including remote jobs that could be performed in NYC, are included. The only companies excluded from this pay tranparency law are temporary employment agencies and businesses with either three or fewer employees, or no domestic workers.
This requirement only applies to monetary compensation, not other benefits, and a specific “good faith” range must be included on all forms of job advertisements, included printed material. Violators will first receive a warning and then up to a $250,000 fine for a second offense. However, there is no specified consequence for not paying employees within the range given.
Ithaca: A new ordinance effective Sept. 1, 2022, amended the city’s human rights protections and requires employers to disclose salary ranges within all job advertisements. It also requires companies to provide salary ranges for promotions or transfers. The ordinance targets employers with at least four employees within Ithaca andat least four employees within Ithaca, and it does not cover independent contractors.
Westchester county: An amendment to the county’s Human Rights Law now requires all employers with at least four employees to post salary ranges on job listings. Much like other pay transparency laws, it does not apply to temporary employment agencies.
Unlike the other laws in Ithaca and NYC, this amendment states the requirements within it will become null and void when statewide pay transparency laws go into effect.
Legislator Colin Smith said the law will help push against the pay gap for women and people of color.
“This legislation is intended to help combat that inequity by creating transparency in the marketplace to level the playing field—all job seekers, regardless of race or gender, will know what the job is worth to any job seeker of any gender identity or race,” Smith said.
Ohio: The state at large does not have any pay transparency laws relating to salary disclosure; however, the following cities do have pay transparency laws:
Cincinnati: Effective March 2020, Ordinance 83 requires businesses with at least 15 employees to disclose salary information. However, there are two caveats to this rule: salary information is only required after both a job offer has been extended and the applicant makes a “reasonable” request. (The term “reasonable request” has not been defined.)
The ordinance also states that companies may not inquire about applicants’ past salaries. They also cannot screen applicants or make hiring decisions based on the applicant’s past or current salaries. While this ordinance includes temporary employment agencies, it doesn’t apply to independent contractors or employees seeking a promotion or internal transfer.
If an employer does not comply with the ordinance, the applicant can sue for compensatory damages, attorney fees, and other costs for up to two years after the violation. However, companies are exempt if the following two situations are true: if the employer has received external certification within the past three years stating their practices won’t include salary history in the hiring process, and if the company hasn’t had a lawsuit filed against them.
Toledo: The Pay Equity Act, effective June 25, 2020, mimics the language in Cincinnati’s ordinance, requiring employers to provide a salary range after extending a job offer if applicants make a “reasonable” request. Same as Cincinnati, the term “reasonable request” has not been defined within the act.
The rest of the restrictions, exemptions, and rules are the same as those in Cincinnati’s ordinance, save for two instances: the certification exemption is not valid in Toledo, and Toledo’s act doesn’t apply to applicants who are rehired within five years.
Pennsylvania: A bill regarding pay transparency had been introduced in 2019, but it did not pass. Thankfully, legislators tried again, and effective Oct. 1, 2021, the Public Act No. 21-30 requires employers to provide salary ranges for open positions, either upon applicant request or prior to/at the time an applicant receives a job offer.
Employers must also provide salary ranges for employees when either they’re hired, their position changes, or they request a wage range. In addition, employers cannot do the following: stop employees from discussing wages, inquire about an applicant’s salary history, or retaliate or penalize employees for discussing wages.
The act also contains several measures relating to pay equality, including preventing employers from paying male and female employees differently for comparable work.
Rhode Island: Employers will soon have to disclose wage ranges and cease from inquiring about an applicant’s wage history after The Act Relating to Labor and Labor Relations – Fair Employment Practices goes into effect on Jan. 1, 2023. However, employers only need to provide compensation ranges upon applicant request, after hiring an applicant, or after a transfer to a new position.
In the event of noncompliance, there are multiple fines an employer might have to pay depending on which sections they violated. For example, if employers violate section 28-6-18(a) more than two times, they may have to pay up to $5,000. The total amount of the fine will depend on the size of the business, the good faith of the employer, the severity of the violation, the employer’s violation history, and whether the violation was intentional or not. The director or the court can also lower the penalty if the business completes a self-evaluation.
This act expands on the state’s Equal Pay Law, which demands equal compensation for men and women in comparable positions. The new act ensures that all employees in comparable positions will be paid the same regardless of sex, race, religion, color, sexual orientation, gender identity/expression, disability, age, or country of origin.
Washington: The “evergreen state” is the third to require compensation information in job postings, after New York City and Colorado. A recent amendment, effective Jan. 1, 2023, will require employers to provide “a general description of all the benefits and other compensation” to applicants for all job postings, including third party or online recruitment postings.
This amendment modifies their Equal Pay and Oportunities Act enacted in 2019, requiring employers with 15 more employees to tell applicants the minimum salaryfor a position after extending a job offer.
Aggrieved individuals may file a complaint if they feel their employer violated the Act, which may require the company to pay for damages.
Also published here.