Salary Transparency Laws Are Making their Way Across the U.S.

Starting this Sunday, Sept. 17, employers in the state of New York will be required to disclose the minimum and maximum salary or hourly range on their job postings. The state mandate is part of a broader trend sweeping across the U.S., with states like California, Washington, and Rhode Island also championing wage equality through similar legislation, as reported by Worklife.

New York City had previously enacted laws in 2022 that addressed salary transparency for employees in the city. However, the state-wide movement towards salary transparency follows a larger trend which took off in California in 2017. That year, California required employers to provide a salary range to job applicants upon request. By 2019, Colorado was the first state to require all employers to include the salary range in every job posting when hiring. Transparency laws in the workforce show no signs of slowing down, with over 10 states and cities either introducing or fortifying their salary transparency laws.

The historic reason for pushes in pay transparency are disparities in pay, especially among women and people of color. By making pay scales more transparent, advocates and policy makers are aiming to bridge such gaps and ensure fairness in the workforce.

In today’s workforce, employees are found to gravitate towards organizations that are more thoughtful and transparent about their compensation structures. When employees have clarity about their compensation and the employer’s rationale, it helps cultivate trust and a sense of equity, and more companies are becoming aware of how this impacts their brand reputation.

Even before the state-wide implementation, the percentage of job postings in New York displaying salary details doubled to 61% in August, which is a significant leap from the previous year, according to Indeed data analyzed by Hiring Lab. This was likely due to New York City’s laws. In comparison, Colorado, a major pioneer in the transparency movement, boasts 81% of job listings with salary details. Other early states with pay transparency legislation, like California and Washington follow closely, with 70% and 75% respectively.

Businesses must be cognizant of their brand reputation as employee preferences and demands continuously change. As the workforce navigates the post-pandemic economy, transparency in compensation is positioned to become more adopted in more cities and states in the coming years.