The Growing Movement Toward Pay Transparency: What Employers Need to Know
Pay transparency is quickly becoming a central component of modern employment practices. As a growing number of states introduce new laws or expand existing ones requiring open disclosure of compensation ranges and benefits, employers of all sizes must stay informed and compliant to avoid legal pitfalls and build trust among their workforce.
Pay transparency laws typically require employers to disclose salary ranges or pay scales in job postings, to applicants upon request, or to current employees who inquire about their compensation. While these rules vary from state to state, most share a common goal: to reduce wage gaps, promote fair compensation, and increase overall wage transparency.
Why This Matters in 2025
This year marks a turning point, with Illinois, Massachusetts, Minnesota, New Jersey, and Vermont joining many other states that already enforce pay transparency rules. Each law has unique details—such as minimum employer size thresholds, recordkeeping mandates, and penalties for noncompliance—making it even more critical for employers to closely monitor legislation in every state where they operate.
West Coast to East Coast
California
California has long been at the forefront of employment law development. In 2023, the state expanded the rule to require employers with at least 15 employees to list a compensation range in any public job posting and provide applicants with pay scale information for a position if they request it.
Under the law, employers cannot seek information about an applicant’s wage history at the time of hire or any other time leading up to employment, making it more difficult for companies to rely on private negotiation. Employers are adjusting by creating structured pay bands that consider experience, qualifications, and regional market benchmarks to help standardize compensation across roles.
Penalties for violating pay transparency laws in California range from $100 to $10,000 per violation.
New York
In New York, employers with just four employees are covered under the 2023 statewide law. To meet the requirements, employers are obligated to disclose the compensation range (salaried or hourly) and a job description for a position (if it exists) when advertising for a job, promotion, or transfer.
The law also requires employers to keep records of the compensation ranges and job descriptions for all roles that will be physically performed, at least in part, in the state or physically performed outside of New York but reports to a supervisor, office, or work site in the state.
Penalties for violating pay transparency laws in New York start at $1,000 for the first violation, $2,000 for the second, and $3,000 for any subsequent violations.
Preparing for Compliance
For employers operating in multiple states, staying compliant means monitoring—and often adapting to—varying local regulations. Some companies have even voluntarily adopted broad pay transparency policies nationwide to avoid confusion and demonstrate consistency in pay practices.
Both legal and human resources professionals recommend the following actions:
Conduct an Internal Pay Review
Before disclosing salaries publicly, companies should analyze their existing pay practices. This typically involves identifying any unwarranted disparities or gaps.
Draft Salary Ranges
Employers must determine the criteria for setting pay bands—such as experience, education, skill set, and geographic location—and be prepared to justify these ranges if questions arise.
Rewrite Job Descriptions
When posting roles internally and externally, employers must include updated pay details in a manner consistent with local regulations.
Train Managers and HR
Staff members who handle hiring and performance evaluations should be well-versed in how the law works and how to discuss compensation with employees and candidates.
Stay Current with Evolving Laws
Because pay transparency mandates differ across jurisdictions and are evolving, monitoring changes at the state and municipal levels is essential.
One helpful resource for a state-by-state look at these laws is this comprehensive guide.
Looking Ahead
As more states introduce or refine their pay transparency regulations, observers expect the practice of openly disclosing salary ranges to grow. Employers who begin by ensuring their pay structures are fair, market-based, and clearly communicated may find themselves better positioned for this new environment, reducing their legal risks and improving employee satisfaction along the way.
For those seeking more detailed guidance, our firm is always here to help you navigate your organization’s particular needs in your state or across multiple.