What is Pay Transparency?
Pay transparency is defined as the degree to which employers are open about what, why, how, and how much employees are compensated.
While the decision to disclose salary ranges is largely left to the employer, a growing number of states and cities have started implementing pay transparency laws, requiring the disclosure of pay information to applicants.
A Brief History of Pay Transparency Laws
Salary transparency stems from the Equal Pay Act of 1963, which generally requires men and women receive equal pay for equal work.
This eventually evolved into salary history restriction laws that limited an employer’s ability to ask about a job applicant’s salary history as a way to decide compensation.
In this latest trend of laws, pay transparency regulations promote transparency around pay practices as a method to avoid disparate treatment of employees.
Pay Transparency and Remote Workers
While your company may not have a physical location in a certain area with pay transparency laws, hiring remote workers or even advertising for remote work in these states may subject you to that state or city’s pay transparency laws.
Additionally, stating in job postings that applicants from certain states would not be considered as a way to circumnavigate this requirement may not be sufficient, as both Colorado and California’s Department of Labor offices have determined. Other states may follow suit.
Because of this, it’s important to know what you may be required to disclose, whether during the interviewing process or even in your job posting if hiring remote workers.
Pay Laws by State
States with Salary History Restrictions
Currently, there are 17 states that have salary history restrictions in place. Those states include Alabama, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Nevada, New Jersey, New York, Oregon, Rhode Island (effective January 1, 2023), Vermont, and Washington.
States with Pay Transparency Laws
States that currently have pay transparency laws in place or have implemented laws effective in the near future include California, Colorado, Connecticut, Maryland, Nevada, Rhode Island, and Washington.
Are you unsure of whether or not you may be required to disclose pay ranges? We're here to help.
Clients of FrankCrum have access to additional information on the pay requirements that affect them at the state, city, and county levels. Clients should reach out to their HR Consultant to learn more about pay transparency laws.
If you're not yet a FrankCrum client and would like to become one to gain access to a wealth of information and guidance, contact us today.
