NATIONAL PAY TRANSPARENCY LAWS

Author: Carley Weinberg, Senior Editor

Pay transparency is the employer practice of disclosing information about employee compensation standards to others – internally, externally, or both.[1] Pay transparency is not defined by a single level or degree.[2] Instead, it is described as a spectrum on which employers can choose varying degrees of transparency based on state and local mandates or their own pay strategy.[3] Pay transparency is a tool that state and local governments are using to combat pay gaps through salary range disclosure laws, pay data reporting mandates, and bans on pay secrecy.[4]

In continuing a trend that began a number of years ago, several states and local jurisdictions have recently enacted or are considering enacting salary and pay transparency laws.[5] While these laws have some variations, they generally require employers to provide job candidates and employees with position-specific salary information and pay ranges.[6] These laws differ regarding at what point in the hiring process the employer must provide salary information, whether the candidate or employee must ask for salary information in other to be entitled to receive it, whether the law applies to independent contractors, and through what medium salary information needs to be communicated.[7] The new pay transparency laws follow a trend aimed at increasing worker protected and ending gender and racial wage inequality.[8]

New York, Connecticut, Colorado, and Washington have all enacted different versions of pay range transparency laws by requiring pay range disclosures.[9] For example, New York City employers must post salary ranges for all internal and external job postings.[10] This law applies to employers that have four or more employees or one or more domestic workers.[11] This applies even if the job is only partially performed in New York City or if a remote applicant in New York City can apply.[12] In recent years, working remotely has taken over in some careers. It is worth nothing that these laws may operate differently with the remote opportunities that are available to out-of-state employees. Although the laws are enacted state by state, it will affect multiple jurisdictions because of remote work. 

In Cincinnati, Ohio, employers with fifteen or more employees within Cincinnati must, upon request, provide the pay scale for a position to an applicant who has received a conditional offer of employment.[13] Pursuant to Cincinnati Ordinance No. 83, passed in 2019, the employer must disclose the pay scale for a position if asked, but the employer cannot inquire about the salary history of an applicant for employment or screen job applicants based on their current or prior wages.[14] Some key findings show that nearly two-thirds of organizations that list pay ranges on job postings say that doing so has increased the quality of applicants they are seeing.[15] Sixty-five percent of organizations that list pay ranges on job postings say that doing so makes them more competitive in attracting top talent.[16] With the trend towards transparency, it will be interesting to see whether Cincinnati will update its Ordinance to require employers to disclose the pay scale without being asked.

[1] Hannah Beppel, Pay Transparency Laws: Your Questions Answered, ADP https://www.adp.com/spark/articles/2023/03/pay-transparency-laws-your-questions-answered.aspx#:~:text=As%20of%20early%202023%2C%20states,have%20also%20enacted%20similar%20legislation (last visited).  

[2] Id.

[3] Id.

[4] Id.

[5] New Laws and Trends Affecting the Workplace in 2023, Winston & Strawn, llp (Jan. 23, 2023) https://www.winston.com/en/thought-leadership/new-laws-and-trends-affecting-the-workplace-in-2023.

[6] Id.

[7] Id.

[8] Lisa Scidurlo, New Pay Transparency Laws Require Salary Range Information on Job Postings, JD Supra (Jan. 6, 2023) https://www.jdsupra.com/legalnews/new-pay-transparency-laws-require-5657370/.

[9] Beppel, supra note 1.

[10] Id.

[11] Id.

[12] Id.

[13] Janet BerryJohnson, Up to Date With Pay Transparency Laws? Here’s What to Know,  ADP https://www.adp.com/spark/articles/2022/12/up-to-date-with-pay-transparency-laws-heres-what-to-know.aspx#:~:text=Cincinnati%2C%20Ohio%3A%20Employers%20with%2015,a%20conditional%20offer%20of%20employment (last visited).  

[14] Cincinnati, Oh., Code of Ordinances § 804-03 (2019) (emphasis added).

[15] New SHRM Research Shows Pay Transparency Makes Organizations More Competitive, Leads to Increase in Qualified Applicants, SHRM  (March 14, 2023) https://www.shrm.org/about-shrm/press-room/press-releases/pages/new-shrm-research-shows-pay-transparency-makes-organizations-more-competitive-leads-to-increase-in-qualified-applicants-.aspx#:~:text=Nearly%20two%2Dthirds%20(66%25),competitive%20in%20attracting%20top%20talent.

[16] Id.