Pay Transparency: 17 States Enacted Transparency Legislation
There are currently 17 states in the U.S. that have laws around pay transparency. Generally speaking, these laws allow employees to freely discuss their pay. Come April of 2022, employers in New York City will be required to post the salary range for every job opening they have, including promotions and transfers. This is a result from a bill passed by the NYC Council in September of last year. New York City is following in the footsteps of several states that have shifted the responsibility onto employers—not employees to ensure equal pay.
States that Require Employers to Provide Salary Range
It’s no surprise that California is the first state on our pay transparency list.
California was the first state in the U.S. to legally require employers to provide the pay range for a job—if the candidate asks for it after the first interview. Passed in 2016, and updated annually, California’s Equal Pay Act prevents employers from asking about candidates’ previous salaries, and was the first law to use the phrase “substantially similar work” in regards to gender pay parity.
In effect since January 2021, Colorado’s Equal Pay for Equal Work Act requires employers to list the pay range and benefits for every job opening. Even if you have just one employee working in Colorado, you’re required to post pay for any remote job that could potentially be performed in the state.
Employers must also notify current employees of all promotion opportunities and keep records of job descriptions and wages.
Relatively new to the pay transparency scene is Connecticut.
They passed a bill that took effect in October 2021, requiring employers to provide a salary range for all extended offers, or before then, if the candidate asks for it. This applies to transfers and promotions, too. Employers in Connecticut have to provide a pay range for any instance where someone is moving into a new role. Here’s a link to Connecticut’s House Bill 6380, with links to the latest updates in 2022.
Maryland originally passed its Equal Pay for Equal Work Act in 2016, but updated it in 2020 with language that requires employers to provide pay ranges to candidates upon request. Employers in Maryland are also prohibited from asking candidates about their previous salary history.
Maryland employees should make a consistent practice of asking potential employers for pay ranges prior to accepting an offer.
Senate Bill 293 is the legal precedent for pay transparency in the state of Nevada. Effective October 2021, Nevada employers must provide a salary range to candidates after the first interview automatically. It’s essentially California’s law, but compulsory for the employer.
For internal moves like transfers and promotions, the onus is on the employee to request a pay range.
Introduced and passed in 2021, the Rhode Island Equal Pay Law will require employers to provide candidates with a pay range if the interviewee requests it—starting in January of 2023. This will apply to transfers and promotions as well. Either way, employers are legally required to disclose the salary range for a role before compensation is discussed with the candidate. Again, these laws won’t take effect until 2023, but it’s clear that Rhode Island has taken the side of the worker when it comes to pay transparency.
Not far behind California, Washington amended its Equal Pay and Opportunities Act in 2019 to require employers to provide a salary range after they’ve made an offer to a candidate. However, it’s always at the request of the candidate. If the candidate doesn’t ask, they won’t get a range.
The same goes for transfers and promos. If an employee in Washington
asks for a pay range, the employer must provide one.
Pay Transparency Laws in 2022
Inc. has called 2022 “The Year of Pay Transparency.” LinkedIn listed Pay Transparency among it’s “Ideas that will change the world in 2022.” It’s clear that pay transparency is becoming a trend in the U.S.
More and more states are moving to require employers to provide candidates with clear salary information. There are some variations in the laws, like whether or not a candidate must request a pay range for the employer to provide it. But generally speaking, providing salary information to candidates before they make a final decision seems to be the common thread here. If your company is looking to improve transparency, communication, and documentation around pay and offers, Pequity can help.
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For additional information regarding employer responsibilities, please visit: https://careerandtalenthub.com/blog/