What You Need To Know About The Next Wave Of Pay Transparency Laws

• Updated pay transparency laws are expected to affect one in three U.S. workers by 2025. 
• Washington, D.C.’s new pay transparency law is just one of five scheduled to go into effect within 2024 and 2025. 
• The waves of effective salary transparency laws are also expected to play a big role in closing gender and racial wage gaps across the U.S.

Salary transparency laws have quickly become an influential factor that’s shaping both hiring practices and the pay equity movement across the United States. 

While the first policy change came in New York, legislation has proliferated around the country and it’s predicted that salary transparency requirements will collectively affect one in three U.S. workers by 2025.

The latest of those laws went into effect in Washington, D.C. on Sunday. 

The newly effective policy requires employers with 25 or more employees to include “minimum and maximum salary or hourly pay information for all job advertisements or job postings and to disclose the existence of healthcare benefits before the first interview.”

And D.C.’s new policy is just one of five pay new transparency laws scheduled to go into effect within the next year. Maryland, Illinois, Minnesota, and Vermont will all join the nation’s capital with their own regulations by 2025. (See the end of this story for more details on each state’s new legislation.)

These updated pay transparency laws are expected to affect one in three U.S. workers, according to data from Payscale. 

States that already require similar salary disclosures within job ads/postings include: California, Colorado, Washington, Hawaii, and New York. 

Why Mandate Transparency?

The increasing introduction of transparency laws across the U.S. is seen by advocates as a major benefit for employees, but it goes both ways. For employers, the posting of salary ranges is linked to improving attraction and retention efforts. 

According to a report published by job posting platform Monster, “43% would ‘ghost’ or pull out the interview process completely if the salary range for the position they applied for was not disclosed during the interview(s).”

In fact, Monster confirms that these policies also help employers save time in the hiring/negotiation process by setting salary expectations early in the recruitment process. 

Posting salary ranges also helps candidates weigh job opportunities when salary information is available upfront, which reduces the likelihood of a candidate dropping out, or ghosting during the interview process.

While many employers have embraced these changes, some are still hesitant to disclose salaries for competitive jobs. However, Monster’s data suggests that salary transparency significantly improves employer branding and the candidate experience: 82% of U.S. workers are more likely to apply for jobs with listed pay ranges. 

82% of U.S. workers are more likely to apply for jobs with listed pay ranges. 

The waves of effective salary transparency laws within the year are also expected to play a big role in closing gender and racial wage gaps across the U.S. 

By allowing all candidates to have access to the same compensation information, transparency laws allow employees to compare their pay with that of their peers.

“We’re witnessing an exciting cultural shift as pay information emerges from a black box,” said Emily Martin, National Women’s Law Center (NWLC) Chief Program Officer. “Pay disparities thrive in secrecy. Providing salary transparency to workers at the outset of job searches helps level the playing field — especially for women and people of color who are more likely to be shortchanged in pay negotiations. Transparency also incentivizes employers to evaluate their pay practices and proactively correct pay inequities inside their workplaces. It’s a win-win for both workers and employers.”

Transparency also incentivizes employers to evaluate their pay practices and proactively correct pay inequities inside their workplaces.

Research conducted by NWLC reveals these laws could help empower marginalized groups to negotiate more effectively and address these wage gaps. 

The Pay Transparency Ripple Effect

The impact of existing laws has stretched far beyond the borders of the states where they apply. The proportion of Glassdoor job listings that included pay information increased over time in all the selected states, even in those without pay range transparency laws. However, states with pay range transparency laws led the way in including pay information.

“In December 2023, among the six states without pay range transparency law studied, Maine had the highest share of job listings with pay disclosure (50.6%), and D.C. had the lowest share (39.8%),” according to the report. “Although pay disclosure rose in these states, their share of job listings with pay disclosure was far below that of states with strong laws requiring pay ranges in job listings. In December 2023, 94.0% of New York job listings included pay disclosure, 81.4% of Colorado job listings, and 76.3% of California job listings.”

By requiring employers to disclose salary ranges in job posting, it helps reduce wage disparities and ensures that employees are fairly compensated. 

Employers are encouraged to evaluate and standardize their pay practices to comply with these regulations — which is predicted to contribute to fairer compensation policies across the U.S. in the coming years.

With labor laws expected to affect such a high number of job seekers in just one year, more candidates can look forward to a more efficient hiring process.  

Upcoming Legislation For Pay Transparency

In addition to Washington, D.C.’s new policy, within the next year the following states will join the list of places with explicit mandates for salary disclosure. 

• Maryland — effective on Oct. 1, 2024. This is an update to future pay transparency requirement. Under the current rules, employers must disclose the wage range for a position upon an applicant’s request. 

The updated policy mandates that all employers disclose wage ranges for job postings, including internal and external advertisements. This disclosure must include the minimum and maximum salary or hourly rate, along with a general description of benefits and other compensation. 

The laws state employers must set these wage ranges in good faith, based on applicable pay scales, previously determined wage ranges, or the budgeted amount for the position.

A first violation of Maryland’s transparency laws is a warning. However, a second violation is a $300 fine per employee or applicant. A subsequent violation goes up $600/employee or applicant.

• Illinois — effective Jan. 1, 2025. This requires employers with 15 or more employees to include the pay scale and benefits in job postings. 

The Illinois Department of Labor can investigate and impose fines for violations. Penalties start at $500 for the first offense, increasing to $2,500 for a second offense, and up to $10,000 for subsequent offenses. 

• Minnesota — effective Jan. 1, 2025. This new law mandates that employers with 30 or more employees include the pay range or fixed pay rate in all job postings. This requirement applies to job advertisements made both directly by the employer and through third parties.

The postings must also provide a general description of benefits and other compensation, such as health insurance and retirement benefits. The salary range must be a good faith estimate and cannot be open-ended​. 

The state law does not specify exact penalties for non-compliance. Instead, enforcement will likely involve investigations and possible administrative actions, but detailed penalties or fines have not been explicitly outlined in the law itself.

• Vermont — effective July 1, 2025. This will require employers with five or more employees to disclose the compensation or compensation range in job advertisements. This applies to positions located in Vermont and remote roles tied to Vermont-based offices​. The Vermont Attorney General’s Office is expected to provide further guidance on enforcement and compliance before the law takes effect.