Summary
Although not all states have implemented pay transparency laws, they will continue to expand throughout the nation this year. The nuanced nature of these laws, which vary marginally from state to state, can present compliance challenges for employers.
Bloomberg Law
"I was once taught that it was rude to talk about salary, or, really, anything related to money. Now, scrolling through social media, I regularly see posts about pay transparency, showcasing people discussing their compensation in front of the whole world.
Though employees have long had the right to discuss their compensation with colleagues, many remained in the dark about their employers’ pay practices. Pay transparency laws are changing that.
Each pay transparency law is unique—in states that currently have them—which makes compliance challenging for employers. Companies should ensure they understand which laws apply to them, as well as the laws’ specific requirements.
Some of these laws require employers to post salary ranges in job advertisements, thereby publicizing what an employer intends to pay for a certain position and resetting applicants’ expectations about seeing salary disclosures in job postings. The laws have given employees insight into employers’ pay ranges and revolutionized the way employees talk about pay.
Not all states have adopted pay transparency laws, but we will continue to see them spread across the country this year. These laws can create compliance challenges for employers—as they are nuanced and differ slightly from each other state by state. They also present an opportunity for employers to put their best foot forward with respect to compensation, and to adopt and implement pay philosophies that can help recruit and retain top talent.
Earlier this month, pay transparency laws went into effect in Illinois and Minnesota. New Jersey, Vermont, and Massachusetts have laws scheduled to take effect later in the year.
These states join Colorado, California, New York, Washington, Hawaii, Maryland, Nevada, Washington, D.C., and other jurisdictions in having requirements for pay range disclosures. Given this new wave of laws, employers should reevaluate their existing pay transparency practices and policies to determine whether any need updates.
For example, Illinois’ law has a promotional opportunities requirement instructing employers that if they choose to publish a job posting externally, they must inform all current employees of the opportunity for promotion. This requirement is similar to a requirement in Colorado (though Colorado, which adopted the country’s first pay disclosure law in 2019, has many other unique requirements).”
This article was originally published in Bloomberg Law.
