All About Pay Transparency (With a Roundup of State Laws)

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Pay transparency laws are becoming more prevalent across various states and cities in the U.S., leading employers to reevaluate their job listings. Here’s an overview of what you need to know about pay transparency. We outline the definition, objectives, and compliance with laws, as well as define how WorkforceHub can support these requirements.

What is Pay Transparency?

Pay transparency involves the disclosure of salary information either internally within a company or externally to the public or prospective employees. The topic often arises in discussions about whether job listings should include salary ranges. Generally, the level of transparency varies, allowing employers to decide how openly they wish to communicate salary expectations.

Pay Transparency vs. Pay Equity

While discussing pay transparency, the concept of pay equity might also be brought up. Pay equity insists that individuals performing the same work should receive equal pay, regardless of factors such as age, gender, race, or religion. The Equal Pay Act of 1963 established this principle, but discrepancies can still exist, which pay transparency aims to mitigate by providing clearer expectations about salaries.

Pay Transparency: Legal Regulations

Various states have enacted pay transparency laws that require employers to disclose salary information for certain roles:

  • Some states mandate that job postings include pay ranges.
  • Others require the provision of this information upon request or at certain stages of the hiring process.
  • While there is no federal mandate yet, the movement towards pay transparency is growing across states.

Individual state laws (updated May 2024)

  • Alabama: An employer cannot refuse to interview, employ/hire, or promote an applicant based on their decision to not provide pay history.
  • California: Employers with 15 or more employees must include pay ranges in all job postings. Private and public employers cannot request candidate pay history.
  • Colorado: Employers are not allowed to use past information to determine wages or seek candidate pay history. Employers are required to disclose hourly or salary compensation (or a range) and a general description of other compensation and benefits in job listings.
  • Connecticut: Employers can’t seek candidate pay history and are required disclose the pay range for a position when an offer is extended to an applicant or upon applicant request. For internal employees, employers must provide pay ranges when a position change occurs or upon request.
  • Delaware: Employers cannot seek the pay history or candidates, although they are permitted confirm the information after making an offer.
  • District of Columbia: Government agencies cannot seek candidate pay history.
  • Georgia: City agencies operating in Atlanta are not permitted to seek candidate salary history on an application for employment.
  • Hawaii: Employers are required to provide salary range or hourly rate for all advertised positions. They are not permitted to seek candidate pay history.
  • Illinois: Employers are permitted to discuss pay expectations but cannot seek candidate pay history. Employers with 15 or more employees must include pay ranges in all job postings.
  • Kentucky: No statewide law is in effect, although city agencies in Louisville may not request salary history.
  • Louisiana: No statewide law is in effect, although city employers in New Orleans cannot screen applicants based on current/prior pay or request salary history.
  • Maine: Employers can only seek candidate pay history when an offer has been extended.
  • Maryland: Employers are not allowed to seek candidate pay history. However, they can confirm any pay information that an applicant voluntarily provides after an offer has been extended. A pay range must also be provided by all employers.
    • In Montgomery County, the government may not rely on salary history as a factor in establishing the pay rate for or hiring an applicant.
  • Massachusetts: Employers cannot seek candidate pay history. They may confirm pay information that has been provided voluntarily by a candidate or after an offer has been extended.
  • Michigan: State departments are not permitted to seek pay history before extending a conditional offer.
  • Mississippi: No statewide law in effect, although city agencies in Jacksonv are not permitted to seek candidate pay history.
  • Missouri: No statewide law is in effect
    • City departments in St. Louis can’t seek candidate pay history.
    • Employers with 6+ employees in Kansas City cannot rely on or ask for salary history when determining the salary/benefits/other compensation or making an offer of employment.
  • Nevada: Employers are not allowed to seek candidate pay history. They must provide the salary range or hourly rate for all advertised positions, as well as the range for those eligible for transfer or promotion within the company.
  • New Jersey: Employers cannot use pay history to screen applicants.
    • Employers with 5+ employees in Jersey City are required to disclose the hourly or salary range and benefits for all job listings and opportunities for transfer and promotion.
  • New York: Employers may not seek candidate pay history. All employers with 4+ employees must provide the salary range or hourly rate for all advertised positions. Specific cities and counties have additional regulations around pay history and salary transparency.
  • North Carolina: State agencies are not allowed to seek candidate pay history.
  • Ohio: Employers in Cincinnati, Columbus and Toledo with 15 or more employees  cannot seek candidate pay history. The pay scale for all open positions must also be included in listings posted by employers in Cincinnati and Toledo.
  • Oregon: Employers may not seek candidate pay history until they have extended an offer.
  • Pennsylvania: Employers are not permitted to seek candidate pay history at any stage of the hiring process. All postings must also clearly disclose pay range and scale.
  • Rhode Island: Employers cannot seek the pay history of a candidate or rely on this information when determining pay or considering extending an offer. It is also required that employers provide the rate of pay (or pay range) upon the request of the applicant or employee.
  • South Carolina: No statewide law is in effect, but county and city agencies in Richland County and Columbia may not seek candidate pay history.
  • Utah: No statewide law is in effect, but city agencies in Salt Lake City are not allowed to seek candidate pay history.
  • Vermont: Employers cannot seek candidate pay history.
  • Virginia: State agencies are not permitted to seek candidate pay history.
  • Washington: Employers may not seek candidate pay history. Those with 15 or more employees are required to disclose the wage scale or salary range, along with a general description of benefits and other compensation, in each job posting.

Why Embrace Pay Transparency?

Companies benefit from pay transparency as it can prevent job seekers from applying to positions that don’t meet their salary expectations, thereby saving time and resources. Furthermore, demonstrating commitment to fair pay practices can build trust and reduce employee turnover. Transparency in compensation can decrease the intent to quit by 30%, as it fosters a supportive and progressive work environment.

Invest in Hiring Tools that Support Transparency in Listings

The hiring tools built into WorkforceHub make it easier for your company to support pay transparency initiatives. Integration with major job boards and salary comparison tools can assist employers in maintaining compliance with pay transparency regulations while attracting top talent. This software ensures that job listings are accurate and reflective of current market standards, aiding in quicker and more transparent hiring processes.

Embracing pay transparency not only complies with emerging laws but also positions a company as a trustworthy and equitable employer.

Simplify HR management today.

Simplify HR management today.

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