Pay transparency laws continue to proliferate nationwide, creating a complex landscape of pay disclosure requirements, particularly for multistate employers. Rayner Mangum of Constangy, Brooks, Smith & Prophete details the background and considerations for compliance, as well as practical recommendations for building a compliance framework.
Pay transparency has shifted from a niche compliance issue to a core operational and strategic concern for employers across the US. What was once an optional disclosure or a matter of internal policy is now governed by a rapidly expanding patchwork of state and local laws that touch nearly every stage of the employment lifecycle — from drafting job postings to reporting compensation data to government agencies.
For employers, the implications are significant. Candidates increasingly expect to see salary ranges before they apply. Existing employees compare posted ranges to their own pay and ask pointed questions. Regulators are scrutinizing disclosures and pay data for inconsistencies. And plaintiffs’ attorneys are actively testing the boundaries of new transparency statutes. Against this backdrop, organizations must move beyond reactive compliance and adopt thoughtful, scalable frameworks that align compensation philosophy, job architecture and legal obligations.
Although pay transparency laws may feel like a recent phenomenon, these laws are the product of years of evolving expectations around pay equity, fairness and accountability. Increased enforcement by federal and state agencies, a rise in pay equity litigation and shifting employee expectations have all contributed. Employees today want to understand not only what a job pays but also how pay is set and how their compensation compares to their peers.
At the same time, lawmakers have increasingly viewed transparency as a mechanism for closing persistent wage gaps, particularly those based on gender and race. Measures like salary history bans and mandatory pay range disclosures are rooted in the belief that greater openness can disrupt the perpetuation of historical pay disparities.
Once a handful of large employers began voluntarily disclosing pay ranges, a domino effect followed. What started as a competitive differentiator quickly became an expectation, and in many jurisdictions, a legal mandate.
The US pay transparency landscape
Federal law: The NLRA
Even in states without pay transparency statutes, employers must remember that the National Labor Relations Act (NLRA) prohibits pay secrecy policies. Employees have a right to discuss their wages and engage in protected concerted activity. Policies or practices that chill those discussions violate federal law.
State and local pay disclosure laws
A growing number of states now require employers to disclose pay information in job postings, including California, Colorado, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Jersey, New York, Vermont, Washington and the District of Columbia. In addition, several cities and counties — particularly in New Jersey, New York and Ohio — have enacted their own requirements.
The details of the laws and their requirements vary considerably, but the core obligation is consistent: Employers must disclose in job postings the pay they reasonably believe they will offer for a position.
Differences among jurisdictions with pay transparency laws include:
- Coverage thresholds (how many employees an employer must have before they are subject to the law).
- Whether additional information, such as benefits, must also be disclosed.
- Whether internal positions (e.g., for promotions or transfers) are covered by the law.
This landscape is ever-evolving. Several states (including Delaware, Maine, Montana, Oregon and Virginia) have recently enacted or are considering pay transparency legislation, which makes ongoing monitoring essential for employers.
What must be disclosed in job postings?
Pay range: A compliant pay range reflects the minimum and maximum compensation an employer reasonably believes it will offer for the role. This range should be grounded in factors like market data, internal equity, job value, budget constraints and the employer’s compensation philosophy.
Common pay range pitfalls include:
- Posting excessively broad ranges (e.g., “$50,000-$200,000).
- Listing a range with no lower or upper point (e.g., “up to $75,000”).
- Providing a range inconsistent with what current employees earn.
- Improperly relying on links or QR codes to provide required information without meeting jurisdiction-specific requirements.
Note that some states like Washington require employers to disclose ranges for multiple job levels if candidates may be slotted into different roles based on their experience level (e.g., Account Analyst I: $60,000-$70,000; Account Analyst II: $70,000-$80,000).
Benefits disclosures: Several jurisdictions also require job postings to include a description of the benefits that will be offered. The types of benefits that must be detailed typically include health insurance, retirement plans, paid time off, bonuses and other forms of benefits that must be reported for tax purposes. Benefits typically do not include minor perks, such as employee discounts or gym memberships. Note that in some states, employers must provide more detail, such as stating the specific number of paid holidays or the amount of vacation time that will be offered (e.g., 12 paid holidays per calendar year).
Additional posting requirements: Certain states impose additional requirements for job postings beyond pay and benefits disclosures. Colorado, for example, requires postings to include information on how candidates should apply and an estimate of when the application window will close. Conversely, New York requires the inclusion of a job description in the posting if one exists for the role.
Remote roles and multistate compliance
Posting for a remote role that could be filled by applicants in many different states can complicate compliance with pay transparency laws. In most jurisdictions, if a remote role could be performed by someone in the state, the state’s pay disclosure requirements will apply to the posting. Some states, such as New York, extend the reach of their pay transparency laws even further, such as to instances where a remote employee would not be located within New York but would report to a supervisor or worksite within the state.
Employers should be aware that they cannot avoid compliance by stating in job postings that positions are open to candidates everywhere except in states that have pay transparency laws. Practical strategies for managing multijurisdictional postings include:
- Developing a standardized posting template that complies with all of the governing jurisdictions’ pay transparency requirements.
- Providing postings that detail state-specific or geographically differentiated pay ranges.
Who can sue for violations?
It depends. In many states, it is the state’s department of labor that has the authority to investigate alleged violations, but in other states (such as Washington) there is also a private right of action. Indeed, the Washington Supreme Court recently ruled that any job applicant can sue for violations of the state’s pay transparency law without the need for the applicant to prove that they applied for the position in good faith or that they were a bona fide applicant.
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Read moreDetailsPay data reporting
Pay transparency does not begin and end with job postings. California and Illinois also require employers to submit detailed pay data to government agencies. Note that New York City also recently passed a pay reporting ordinance. Thus, the list of jurisdictions with these requirements continues to grow.
California pay data reporting
California requires private employers with 100 or more employees and at least one California employee to submit annual pay data reports for all employees who are assigned to a California establishment or who work in California. Employers must report employee-level data by establishment, broken down by EEO-1 category, race, ethnicity and sex, along with pay bands, total hours worked, and mean and median hourly rates. The same type of report must be submitted for labor contractors. These reports are due annually on the second Wednesday of May. California is actively auditing and imposing penalties on employers who fail to respond to the pay data report.
Looking ahead, California will expand its occupational categories from 10 EEO-1 categories to 27 state-specific categories beginning in 2027, which will add another layer of complexity.
Illinois equal pay registration certificate
Illinois takes a different approach. Covered employers — private employers with 100 or more employees in Illinois — must submit an equal pay registration certificate every two years, along with individual employee data for the prior calendar year separated by sex and race/ethnicity, including county of work, date of hire, total wages, job changes and hours worked. Employers must also certify that they are, among other things, in compliance with state and federal equal pay laws and attest that any compensation disparities are justified by legitimate factors. This certification will require employers to have undertaken a detailed analysis of employees’ pay data and the justifications for any disparities in pay among employees. It is highly advisable that employers work with legal counsel and have this analysis conducted under attorney-client privilege. Employers must also certify that they are not restricting employees of one sex to certain job classifications and detail the approach they are taking in determining what level of wages and benefits to pay its employees.
One challenging aspect of Illinois’ equal pay registration certificate requirements is with respect to tracking job changes and reporting pay within each role. Because pay is typically provided per payroll period rather than as of the date of any particular job change, it can be challenging for employers to parse this data out in situations where an employee has changed roles at some point during the year.
Enforcement, litigation and risk
Pay transparency has made compensation practices more visible and more vulnerable to challenge. Regulators and plaintiffs’ attorneys alike are using job postings and pay data to identify potential discrepancies.
Enforcement data from Colorado illustrates the risk. Since Colorado’s equal pay law took effect in 2021, the state has received thousands of complaints and imposed substantial fines on noncompliant employers. As noted above, in states like Washington, there is additional exposure due to the state’s private right of action. Indeed, employers in Washington have faced class-action lawsuits alleging inaccurate ranges or incomplete disclosures, with settlements reaching into the millions. Statutory penalties vary widely by jurisdiction, ranging from hundreds of dollars to hundreds of thousands of dollars per violation.
Building a sustainable compliance framework
Develop a compensation philosophy and job architecture. A clear compensation philosophy is foundational for ensuring pay equity. Employers should implement a consistent system to determine how jobs are evaluated, how ranges are set, how equity is maintained and how geographic differences are handled. Creating job architecture and consistent job families, levels and descriptions supporting credible pay ranges is extremely helpful and can simplify posting and reporting obligations.
Maintain and preserve documentation. It is critical for employers to create and retain detailed records of their internal and external job postings, including documents supporting the pay ranges detailed within job postings and their basis.
Standardize posting processes. Developing a posting template that complies with all applicable jurisdictions’ pay disclosure laws can dramatically reduce the administrative burden of job postings that reach across multiple jurisdictions.
Leverage technology. Utilizing technology can also help simplify the compliance process. For example, employers can use a human resource information system to tie salary ranges to job codes, integrate an applicant tracking system with posting templates and automate posting language and templates.
Manage recruiters. Employers are typically liable for recruiters’ actions, so it is extremely important that employers manage any outside recruiters they are using for job postings. Employers should ensure that there are indemnification provisions in their agreements with recruiters. It is also advisable for employers to require recruiters to obtain preapproval for any postings that will be issued, provide recruiters with standard posting language, implement an oversight process and document any corrections that are made.
Rayner Mangum is a senior counsel at law firm Constangy, Brooks, Smith & Prophete, where she defends employers in a wide range of employment law matters before administrative agencies and state and federal trial and appellate courts. She represents clients in single-plaintiff lawsuits and complex class and collective actions involving claims under Title VII, the Americans with Disabilities Act, Age Discrimination in Employment Act, Fair Labor Standards Act, Family and Medical Leave Act, Title IX, the Rehabilitation Act and the Colorado Anti-Discrimination Act, among other federal and state laws. 
