Hey, Warriors and Bosses!
It’s official: pay transparency is sweeping the nation faster than you can say “What’s the salary range?” Over the past year, the number of states requiring employers to publicly disclose compensation details in job ads has ballooned. And as of now, five more states are jumping on board, bringing us to a grand total of 14 states — plus eight individual cities and counties — that have enacted some form of pay transparency legislation. Even more noteworthy, these new additions include three of the country’s heavyweights: California, New York, and Illinois. Together, they cover roughly a third of the entire U.S. workforce.
What Are These New Laws All About?
Much like your favorite homemade cookie recipe, each state has its own unique twist on how these pay transparency laws should be served up. In general, covered employers must include pay scales or ranges for open positions in both internal and external job postings. In many cases, employers must also disclose benefits and other types of compensation (e.g., bonuses, commissions). As usual, there’s a wrinkle or two:
- The threshold for which businesses must comply varies by state. Some base it on the number of employees in that state; others count employees nationwide.
- Certain states (like Illinois and Vermont) also rope in positions located outside their borders if those employees report to a manager in-state.
The Five Newcomers (and When They Start)
If you’re wondering who’s being fashionably late to the pay-transparency party, here’s the rundown:
- Illinois – Employers with 15 or more employees must comply starting January 1, 2025
- Massachusetts – Employers with 25 or more employees must comply starting October 29, 2025
- Minnesota – Employers with 30 or more employees must comply starting January 1, 2025
- New Jersey – Employers with 10 or more employees must comply starting June 1, 2025
- Vermont – Employers with five or more employees must comply starting July 1, 2025
Massachusetts will also begin requiring companies with 100+ employees to submit wage data to the state each year. This puts Massachusetts in league with California and Illinois, which already have reporting requirements.
Illinois is turning the concept of “internal promotion awareness” into a game of hot potato. Employers must post any new external job for at least 14 days internally, giving current employees a chance to level up. New Jersey is a bit looser, only insisting on “reasonable effort” for internal announcements.
If you’re under Illinois’ 2021 Equal Pay Act, your employees can already request anonymized pay data for a given job classification or title from the state Department of Labor.
It’s no secret that pay transparency has become a rallying cry for employees looking to close the wage gap and foster a sense of fairness. These laws are meant to do exactly that, but on the employer side, they can be a compliance maze. If your organization has operations in multiple states — or right across from a municipal boundary with its own rules — this legal patchwork can get complicated.
Here’s what you can do to prepare:
- Audit Your Current Compensation Structures. Check your salary ranges, bonus programs, and benefit offerings to make sure they’re well-defined and justifiable.
- Update Your Job Postings. With these new laws taking effect, you’ll need to include compensation details (and possibly benefit info) in your listings, both external and internal.
- Review Promotion Practices. Are your internal promotion announcements consistent with state requirements? Get those ducks in a row before the new rules come into play.
- Train Your Managers and HR Team. Everyone in a position to talk salary with employees or candidates should be prepared to have transparent and informed discussions.
In short, the tide is turning toward greater pay visibility. Better to prep your sea legs now than be caught off-guard when the next wave of transparency laws breaks — because, as you’ve likely noticed, these rules keep expanding faster than new coffee flavors in winter.
Be Audit-Secure™!
Lisa Smith, SPHR, SCP
Note: This blog post is for informational purposes only and should not be construed as legal advice. Always consult with a legal professional for advice specific to your situation.
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Lisa Smith, SPHR, SHRM – SCP
Certified EEO Investigator (EEOC)
Lead Support and Content Chief – HelpDeskforHR.com
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