Pay transparency is a growing trend in many states and cities. Depending on the jurisdiction, employers may be:
- prohibited from asking applicants about salary history;
- required to disclose salary ranges to applicants in a job posting or at another specified point in the interview process; and/or
- required to disclose salary ranges to employees upon request or to an applicant after a conditional offer of employment has been made.
And while there is currently no federal pay transparency law in place, Congresswoman Eleanor Holmes Norton, on Equal Pay Day, introduced three bills, including a national pay transparency bill. Congresswoman Norton chose Equal Pay Day because it marks the additional days women must work to earn what men earned the prior year. This year Equal Pay Day was March 14, 2023.
The Salary Transparency Act would amend the Fair Labor Standards Act and require all employers to provide the salary range for all job advertisements. The salary would include wages and other forms of compensation the employer anticipates offering for the position. The act includes civil penalties and a private right of action.
Even without a federal pay transparency law, as noted above, many states and cities require some form of pay transparency. The states that currently, or will this year, have a pay transparency law are California, Colorado, Connecticut, Maryland, Nevada, New York (effective September 17, 2023), Rhode Island, and Washington. Additionally, the cities of Jersey City, New Jersey, New York City, Ithaca and Westchester County, New York, and Cincinnati and Toledo, Ohio all have pay transparency requirements. Columbus, Ohio will add a ban on the use of salary histories beginning March 1, 2024.
State and Local Requirements
California – Employers with fifteen or more employees, at least one of which works in California, must disclose the salary range in all job postings, including those posted by third parties. All California employers must disclose a position’s salary range to current employees upon request.
Colorado – Employers with one or more employees in Colorado must disclose in all job postings: (1) a salary range; (2) a general description of any bonuses, commissions, or other forms of compensation; and (3) a general description of all benefits.
Connecticut – Employers with one or more employees in Connecticut must provide wage range information to an applicant upon the earlier of (1) the applicant’s request; or (2) upon the offer of employment. Employers must provide a current employee, upon request, the wage range for the employee’s position.
Maryland – All Maryland employers must provide the wage range to applicants upon request.
Nevada – All Nevada employers must provide applicants who have completed an interview with the wage or salary range or rate for the position. Employers must also provide the wage or salary range or rate for a promotion or transfer to a new position if an employee has: (1) applied for the promotion or transfer; (2) completed an interview for the promotion or transfer or been offered the promotion or transfer; and (3) requested the wage or salary range or rate for the promotion or transfer.
Jersey City, New Jersey – Employers with a principal place of business in Jersey City with five or more employees must provide the salary range and description of benefits in all advertisements for any job, promotion, or transfer.
New York – Employers with four or more employees must disclose the compensation or a range of compensation in any advertisement for a job, promotion, or transfer.
Ithaca, New York – Employers with four or more employees must disclose minimum and maximum hourly or salary compensation in any postings for a job, promotion, or transfer.
New York City, New York – Employers with four or more employees with at least one in New York City must disclose a minimum and maximum annual salary or hourly wage in any advertisement for a job that will or may be filled in New York City. Employers must also disclose a minimum and maximum salary range in any posting for internal promotions or transfers.
Westchester County, New York – Employers with four or more employees must disclose minimum and maximum salary ranges on all job advertisements for positions that will or may be filled in Westchester. Employers must also disclose the minimum and maximum salary in any postings for a promotion or transfer.
Cincinnati, Ohio – Employers with fifteen or more employees in Cincinnati must provide a salary range upon an applicant’s request after making a conditional offer of employment.
Toledo, Ohio – Employers with fifteen or more employees in Toledo must provide a salary range upon an applicant’s request after making a conditional offer of employment.
Rhode Island – Employers with one or more employees in Rhode Island must provide: (1) upon request, the wage range to an applicant for the position for which the applicant is applying; (2) the wage range for the employee’s position, both at the time of hire and when the employee moves into a new position; and (3) upon request, the wage range to an employee during the course of employment.
Washington – Employers with 15 or more employees with one or more employees in Washington or if they engage in business in Washington or recruit for jobs that could be filled in Washington must disclose (1) wage or salary range and a general description of all benefits and other compensation in each posting; and (2) wage or salary range for the employee’s new position, upon request of an employee offered an internal transfer to a new position or promotion.
Employer Approach
Given the nuances existing in the current state and local requirements, employers must keep apprised of the pay transparency updates. Even smaller employers can run afoul of the requirements, especially if they have and allow a remote workforce. One approach is to only allow in-office positions (no remote work) and then you would only have to comply if your business is in one of the states or localities that have a pay transparency statute. Given the fact that many employees are now either working fully remote or in a hybrid schedule, that approach may not work. Larger employers are clearly more impacted by these laws. Some employers are trying to be as specific as possible with postings and comply when required but have not yet changed their overall recruiting processes. Other employers are reviewing their recruiting processes, job postings, and compensation structures and are including salary ranges in all job postings, with qualifying language regarding experience and geographic location.
As always, please contact your Stall Legal attorney for further guidance on this trending topic.