Pay Transparency Laws by State 2024

Recently, states have started to become more transparent about their pay. For protected classes in particular, this change is welcome. But a look at pay transparency laws by state 2023 reveals a patchwork of regulations.

If you are hiring, then you will need to keep these laws in mind—particularly if you are hiring remote workers. Your state might not currently have a wage transparency law. But this does not mean that there are no such laws where your job candidates live. 

What Are Pay Transparency Laws by State?

As might be expected, pay transparency laws by the state will vary. There are five general ways to divide which states have pay transparency laws.

Territories and States With No Pay History Law and No Salary Transparency Law

The following states have neither law and have no cities with such a law.

Territories and States With Neither Law But With Proposed Pay Transparency Legislation

The following states have neither law and have no cities with such a law. But there is an assembly bill or other type of bill in various stages in these states.

Territories and States With a Salary Ban Only

Some of these states may be contemplating full salary transparency legislation to become pay transparency states or may have cities with different laws (see the next section below).

Territories and States Where Only City or County Laws Differ

Often, the city or county laws are older than the state laws.

Territories and States With Pay Transparency Laws

Alabama

The Truth in Salary Act applies to state employees only. Annually, state employees will get a comprehensive list of all their compensation. This includes salary, fringe benefits, and retirement contributions.

Also, Alabama employers cannot refuse to hire someone if they do not provide a wage history. However, there are no actual salary transparency laws, apart from state employees being able to get annual information on their own compensation.

California Law

The California law is effective as of January 1, 2023, per signature by Governor Gavin Newsome. A California employer must disclose the pay scale for a position if the applicant asks for it. This law only covers a California employer with 15 or more employees.

Under California law, employers may not ask for payment history, regardless of the number of employees they have. 

Colorado Law

The Colorado law is effective as of January 1, 2021. Employers must disclose the pay range for a position if the applicant asks for it. The Colorado Equal Pay for Equal Work Act applies to Colorado employers with at least one employee, as well as out-of-state employers.

Under Colorado law, employers may not ask about pay history. This law also went into effect in 2021. 

Connecticut Pay Transparency Law

The Connecticut law is effective October 1, 2021. An employer must disclose the pay scale for a position if the applicant asks for it. 

Under Connecticut law, employers must provide salary range information to applicants by the time they extend an offer of compensation—even if the applicant did not request it. 

But, employees are entitled to salary range upon hire and when changing roles, in addition to upon request. Connecticut employers cannot ask about salary history.

Maryland Pay Transparency Law

Effective October 1, 2020.  An employer must disclose the pay range for a position if the applicant asks for it. Employers cannot refuse to hire if a candidate does not disclose their salary history.

Michigan

Salary law only affects state agency employees. It is pursuant to an Executive Directive from Governor Whitmer. 

Nevada Pay Transparency Law

Effective October 1, 2021, Nevada employers must disclose the salary range to applicants who have completed an interview for the position. They must also disclose the range if the applicant requests it.

Also, employers must give salary range information to employees going for a promotion or transfer if the employee has applied, completed an interview or has been offered the position—and if requested.

Nevada also has a salary history ban.

New York Pay Transparency Law

A New York state law has been signed by Governor Hochul. “This act shall take effect 270 days after enactment.” Since news of the governor signing was reported on December 22, 2022, that puts the effective date for the New York law at mid-September of 2023.

New York labor law already included a salary history ban.

Albany County

Employers may not ask about pay history until after an offer has been made.

Ithaca

Ithaca has wage transparency laws, effective September 1, 2022. 

New York City

Effective November 1, 2022, under NYC pay transparency laws, an employer must include “good faith” estimates of salary ranges in job advertisements, and for promotions or transfers. They must provide maximum and minimum wage for the position. Salary does not include other compensation like 401(k) contributions.

But the NYC law only applies to jobs performed within New York City. This includes an employee’s home office if they work remotely.

Under New York City law, New York employers may not ask about salary history. 

Westchester County

Westchester County has a salary transparency law, effective November 6, 2022. 

Rhode Island Pay Transparency Law

State of RI payroll transparency is effective January 1, 2023. An employer must disclose the range for a position if the applicant asks for it, when changing jobs, and upon hiring. Rhode Island also has a pay history ban.

Washington State Pay Transparency

Washington State Pay Transparency is effective January 1, 2023, salary range information must be provided to employees changing roles if requested. Salary information also has to go on a job posting. This law applies to covered employers with 15 or more workers. 

Under Washington law, compensation includes a full listing of benefits like health insurance. Washington also has a salary history ban.

United States Territories and Possessions

Guam

In Guam, there is salary transparency—but only for government employees.

What is Pay Transparency?

A state will pass a pay transparency act in order to level the playing field for job applicants. Under this type of employment law, an employer must divulge on a job posting the salary range that they will pay for an open position. 

States with pay transparency laws often also make it illegal for employers to ask for pay history from job applicants. The idea is to break down barriers and make it easier for employers to provide equal pay. Often these laws are a part of a state’s Labor Code.

Pay Transparency and Your Business

As pay transparency laws by state in 2023 change, your hiring practices will likely have to change right along with them. But there are benefits to these new laws, even for smaller businesses that barely meet the threshold for a law to apply. 

Be ready to change the way you hire, even if you don’t expect to bring anyone new on board this year. Because these laws are not going away any time soon.

Also note—states use these two terms interchangeably: pay transparency and salary transparency. 

Sometimes, the former refers to salary information on job listings. Sometimes, it refers to protecting workers against retaliation for discussing their own salaries. And sometimes it’s the latter term that refers to either of these situations.

And sometimes, either situation is called wage transparency.

Pay Transparency Pros

There are benefits to pay transparency laws, and it’s not just the employees who enjoy a net positive.

Pro 1 – Nobody Has to Waste Their Time

In states with pay transparency laws, if an employee is going to be too expensive to hire, they probably won’t apply in the first place. This means that the company won’t have to scramble to try to sweeten the pot enough to attract an A++ candidate.

At the same time, a listed salary that is very high might scare away underqualified applicants. With fewer applicants in the overall pool, the decision-making process goes more smoothly.

Pro 2 – Negotiating Can Only Go So Far

If the range is, say, $65,000 – $92,000, then it bolsters a hiring manager’s claim that there is simply no more money to go to a salary. If a candidate won’t settle for the highest $5,000 or so within a range, they might not apply at all.

This can leave the pool of candidates filled with people who will only negotiate within the range, thereby making hiring easier.

Pro 3 – Diversity Gets a Chance

For businesses that may be having trouble attracting diverse candidates, any pay transparency requirements can eliminate some of the roadblocks to a diverse candidate applying. 

It can also eliminate some of the reasons not to bring diverse candidates further into the hiring process. And as images on the company website or blog, or on LinkedIn start to show more diversity, diverse candidates will be even more likely to apply.

Pro 4 – Chances of Attracting an Overqualified Candidate are Slim

Knowing that (for example) $92,000 is the limit, an overqualified candidate will probably pass up the opportunity. If a company is looking for a junior person, then the posted salary should reflect this. Then the overqualified candidate will seek other opportunities.

Again, when the pool of candidates is smaller, and the remaining candidates are better suited to the role, it gets rid of time spent weeding out candidates that shouldn’t even make it to the first round of decision-making.

Pay Transparency Cons

But there’s a cloud to this silver lining. Pay transparency laws don’t help out everyone.

Con 1 – Superlative Candidates Might Not Bother to Apply

Ivy League graduates. PhDs. Professional engineering licensees. Candidates with twenty or more years of experience. 

Many of the above candidates will never bother to apply if the high end of the salary range does not meet their expectations. As a result, a business won’t attract them, and that issue can be compounded over time.

If superlative characteristics are important to a business, then the business really has but one choice, and that’s to raise the high end of the salary range.

But they would likely have to do that anyway.

Con 2 – Businesses Must Commit to a Salary Range

Hiring managers will need to know their budgets and commit early. But if a budget is slashed, what does a hiring manager do? It’s entirely possible that they would have to rescind any offers and start the whole process all over again.

Requiring a commitment means there is very little wiggle room to offer more money—but if a hiring manager can offer better perks like more vacation time, that might be a way around this issue. 

Con 3 – Employees Will Be Able to Compare Their Pay, and They May Not Like What They See

Can employers trust employees not to talk? Of course not. And any employer who thinks employees aren’t talking already—law or no law—is probably in for a rude awakening.

A current employee (particularly a senior one) who feels they are not being paid fairly may jump ship. As for employees who feel they are being paid well, will they start to rest on their laurels? That all depends on the individual.

Con 4 – Too Much Sharing of Personal Information

This con is pretty easily prevented if employees and employers are discreet. If the business says all engineers are paid from $65,000 to $92,000, then one person isn’t singled out. But this works best if there are a lot of employees in the same role.

What happens when it’s the salary for a CEO or a department of one? Employers will need to find a way to protect employees’ privacy without running afoul of a new law.

FAQs

Which States Have Wage Transparency Laws?

At this point, a number of states have been rolling out these laws. Other states are debating these laws in their legislatures.

There are also places where the state itself may not have such a law, but a major city does, whether it comes to an hourly wage or annual pay. 

Which States Cannot Ask You For Current Salary?

Pay history bans are a lot more popular than full-out salary transparency laws.

Is There a Federal Wage Transparency Law?

Not quite. But there is the Good Jobs Initiative. And while it isn’t a law, it is an incentive to not only improve jobs overall but to hire more people who are members of varying protected classes. That is women, minorities, LGBTQ+, disabled people, etc.

So, instead of requiring full salary disclosure based on transparency, the initiative instead encourages employers to hire people who they may not have been willing to consider before. 

There is also the Paycheck Fairness Act. This bill addresses wage discrimination on the basis of sex, which is defined to include pregnancy, sexual orientation, gender identity, and sex characteristics. 

And there is also the Salary Transparency Act but it has only been introduced. 

However, as of the writing of this blog post, the Paycheck Fairness Act has only passed the House of Representatives. Given the shift in power in both houses of Congress, it is likely that bills such as these would be kicked back to committees and altered significantly.

Also, under Executive Order 11246, an employee has the right to inquire about, discuss, or disclose their own pay or that of other employees or applicants. 

The employee cannot be disciplined, harassed, demoted, terminated, denied employment, or otherwise discriminated against because they exercised this right.

Why Does it All Matter? Consider Pay Transparency and Pay History

These two concepts essentially go hand in hand. And it all has to do with systemic discrimination. Consider two separate scenarios.

No Pay Transparency With No Restrictions on Asking About Pay History

Andrew and Barbara have both applied for a full-time position at C Widgets. 

The candidates live in states where pay transparency is not the law, and there are no fetters on asking candidates about their salary history. The company is domiciled in such a state, too. These can be three separate states.

Barbara and Andrew both have twenty years of experience in the widget industry. They both interview well, with no red flags noted by the interviewer. The hiring decision is down to just these two candidates, with only one role to fill. There’s no budget to hire both.

Let’s look at their backgrounds for a moment.

Andrew’s Background

When he was fresh out of college, Andrew applied for the best jobs in the widget industry that he could find. He started to negotiate from the very beginning of his career. He would regularly ask for raises, with varying degrees of success.

He started at $40,000. But when he left his first position after two years, he was making $48,000. At his second job, he was making $53,000 to start.

Whenever he changed jobs, he would only apply to places where he was sure he could do better financially. Even without salary transparency, he would check with his peers and read industry publications. In twenty years, his salary has gone from $40,000 initially to $90,000.

Barbara’s Background

Throughout Barbara’s life, she’s had to swim against the tide. When she was fresh out of school, her first thought was to get a job as quickly as possible within the industry. With no time for or interest in shopping around for the best possible job she could get, she took her first offer.

When the offer came in, it was for $35,000. She leaped at the opportunity and took the salary with no negotiations. Barbara spent her time at her first employer waiting for review time to start any salary discussions. Otherwise, she did not ask for raises.

When she left her first position after six years, she was making $41,000. 

In her second role, she was offered $43,000 and took it, again with no negotiations. This pattern repeated itself in her life. She would stay longer at a position than many people, but without too much gain in salary. And then, when she did jump ship, it wasn’t for a very big bump in pay.

In twenty years, her salary has gone from $35,000 to $63,000.

Who’s More Likely to Apply?

For many women and other underrepresented classes, a job description feels like an all-or-nothing proposition. If they don’t have 100% of the qualifications listed, they will not apply. But for people like Andrew, that figure is more like 60%.

With that much-added confidence, Andrew is a natural to push for more money. He’s not desperate and has enough saved that he can be choosy.

But Barbara has had a career that is all too familiar to many members of protected classes. She has heard all her life, subtly and not so subtly, that she should just sit and be quiet and wait her turn.

A Tale of Two Kinds of Offers

If C Widgets offers both candidates $85,000, it’s a step down for Andrew, and he will either negotiate for better or turn it down. 

But for Barbara, it’s a windfall. Not wanting to let a good offer slip away, she’ll accept quickly, with no reservations. And the hiring manager for C Widgets gets to save an additional $7,000 they had in reserve for negotiations.

Or, C Widgets offers Andrew $91,000 because they realize he won’t take any less. He’s told them his pay history, so the hiring manager will offer as little as they can get away with. 

When Andrew negotiates, there’s only $1,000 worth of room. But the hiring manager may be able to swing something else, like added vacation time.

If Andrew says no, the hiring manager offers the same role to Barbara for $65,000. Barbara, again, sees this as a good thing and just takes it, no questions asked. The hiring manager has just saved $27,000 by hiring her.

No wonder Barbara’s employers have all loved her. She’s cheaper to keep.

What if Pay Transparency is the Law and it is Illegal to Ask About Pay History?

Now let’s flip the script. C Widgets is required to divulge its salary information. But Barbara and Andrew don’t have to.

C Widgets advertises that the position pays $65,000 – $92,000. With that information out there, Andrew might not even apply. But Barbara might see it as a good opportunity to get ahead a bit. After all, any offer will be better than what she currently makes.

Let’s say Andrew applies anyway.

Without knowing what either one has been making, the hiring manager offers $85,000 to the two candidates, in the name of pay equity. Andrew drives a hard bargain to get the full $92,000. But Barbara doesn’t—because she’s just gotten the biggest raise of her life.

And while she should still negotiate, she’s made such a quantum leap in salary that she will likely just forgo that. In this instance, that won’t really hurt her. And if Andrew doesn’t apply in the first place, she has less competition for the coveted position.

Pay Transparency and Salary Negotiations

Some people, like Barbara, are just not cut out for negotiations. When a state, city, or county requires pay transparency, it lets them off the hook. They can still enjoy a benefit even if upbringing, anxiety, culture, or any other reason keeps them from negotiating.