Pay Transparency Laws Are Here. Are Your Salary Ranges Ready?
A growing number of cities, states, and provinces are coming out with pay transparency laws.
This powerful movement is a stepping stone towards closing pay gaps and leveling the playing field for underrepresented groups.
However, one unintended short-term consequence is that we currently have a patchwork of legislation that is very confusing for employers to navigate.
On top of that, sharing salary ranges externally raises a lot of complex internal questions, such as:
- Do your employees think they’re being paid fairly?
- Do they know the salary range for their own role?
- Are the salary ranges that you’re posting publicly consistent with your internal ranges?
You can’t focus on complying with pay transparency laws without also considering the implications for your employees.
What do Pay Transparency Laws Require?
Pay transparency laws vary greatly by region. Please refer to the detailed breakdown by city, state, and province (later in this post) for your specific requirements, but here are some of the big recurring themes.
Employers may be required to:
- Post the rate of pay or salary range in a public job posting
- Describe the benefits and other types of compensation offered, in addition to base salary or hourly pay
- Share the salary range for a job with a job applicant (when requested or according to other criteria)
For Current Employees
Employers may be required to:
- Share the salary range for an employee’s job upon request
- Share the salary range for a job that an employee is trying to be promoted into or transferred to
- Create salary ranges that are a good faith and reasonable estimation of the range of compensation you might pay for a job at the time of posting that job
- Keep a record of an employee’s job title, pay history, and salary ranges during the length of their employment and for a period of time after their employment ends
How to Prepare Your Company for Pay Transparency Laws
Despite all the different nuances of pay transparency law, you will notice one common underlying theme: salary ranges (also known as pay ranges or pay bands).
For job postings, promotions, and internal transfers, most of these laws require that you build out your salary ranges and get ready to share them with employees and job applicants.
This is an intimidating prospect for many businesses. Building out salary ranges is a huge undertaking for HR and People & Culture professionals.
We’ve developed a step-by-step guide to guide you through the process of building your salary ranges for the first time.
You can also leverage a compensation management software, like Barley, to help you:
- Build out your salary ranges and job levels
- Adjust your salary ranges for different locations
- Manage salary ranges for different careers paths, such as individual contributors and managers
- Update your salary ranges with ease as things change
- Securely share the right salary ranges with the right people within your organization
- Gain confidence that you are compensating fairly and equitably
Get in touch to learn how Barley can help you structure your salary data and get ready for the public scrutiny of pay transparency laws.
Current Pay Transparency Laws by State and Province
California was the first state to enact pay transparency legislation.
Once a candidate has completed their first interview with you, you must provide them with the salary range for that position if they request it.
New pay transparency laws, with increased scope, will come into effect in California in January 2023.
Colorado requires that job postings include a range of hourly or salary compensation, and a general description of all the benefits and other types of compensation for that job.
You may ultimately choose to pay outside that range, but the posted salary range should be your good faith and reasonable estimation of the range of pay at the time of posting.
This requirement also applies to remote jobs. If you have one employee working in Colorado, you must be transparent about pay when posting any remote job that could potentially be done in Colorado.
In Connecticut, you must share the salary range for a given job with a job applicant when they request it, before they get an offer, or when they get an offer.
You must also be transparent with employees by sharing the salary range for their position when they are hired, when their job changes, or whenever they request it.
Pay transparency laws in Maryland require that you share the compensation range for a given job with a job applicant when they request it.
Nevada requires that you share the pay range for a given job with a job applicant when they request it.
For employees who are transferring or applying for a promotion, you must share the pay range for a given job when they apply, when they interview, when they’ve been offered a new role, or when they request the pay range for the role they’re seeking.
These pay transparency laws only apply if you are an employer in Jersey City with five or more employees.
If so, you must disclose the salary range (or hourly range of pay) and benefits for every job posting, promotion, or transfer opportunity that you offer. This range may extend from the lowest to the highest salary that you estimate, in good faith, that you would pay for the role at the time of posting.
These pay transparency laws only apply if you are an employer in New York City with four or more employees.
You must disclose the minimum and maximum salary or hourly rate for every job posting, promotion, or transfer opportunity. The range can stretch from the lowest to the highest rate that you believe, in good faith, you would pay at the time of the posting. The law does not cover jobs that cannot or will not be performed in the city.
Ithaca and Westchester have the same pay transparency laws, but theirs do not apply to offers of temporary employment.
These pay transparency laws only apply to employers in Cincinnati with 15 or more employees. They do apply to referral and employment agencies.
Upon request, you must provide a salary range for a given job to a job applicant who has been given a conditional offer of employment for that job.
Prince Edward Island
Prince Edward Island was the first province in Canada to enact pay transparency legislation.
Pay transparency laws in PEI require that all public job postings must include the expected pay or range of pay for the position.
Employers are also prohibited from taking any reprisal action against employees who discuss or disclose their pay to others.
Upcoming Pay Transparency Laws by State and Province, 2023 and beyond
On January 1, 2023, California’s existing pay transparency laws will be expanded to include the following requirements:
- Upon request, employers must share the salary range of a job with an applicant, even if they have not completed an initial interview
- Upon request, employers must share the salary range for an employee’s current job with that employee
- Employers must keep a record of an employee’s job title and pay history for three years after the end of employment
Ontario’s Pay Transparency Act requires that any employer who publicly advertises a job post shall include the range of expected compensation for that position.
The Act was passed in 2018 and was supposed to come into effect on January 1, 2019, however the effective date has been indefinitely postponed.
On January 1, 2023, you must provide the salary range of a job to job applicants if they request it. This should be done before discussing compensation.
If an employee requests it, you must share a salary range for their position. You must also share the salary range whenever an employee moves into a new position.
On January 1, 2023, job postings by employers in Washington with 15 or more employees must include the salary range and a description of any other benefits or compensation.
Many states and provinces have adopted pay transparency laws already, with even more on the horizon. This leads analysts to predict that federal legislation is on the horizon in the United States and Canada.
Adding momentum to this change are social forces, such as the rise of public crowd-sourced salary data sites like Glassdoor and Levels.fyi.
As a business, you want to ensure that you comply with any legal pay transparency requirements, while also ensuring that your employees feel fairly compensated when they see these salary ranges being posted publicly. To get ahead of the pay transparency trend, start by building out a consistent and equitable pay structure internally to guide all of your pay decisions.