Tips from a Recruiter: Pay Transparency Laws

When Colorado first enacted wage transparency legislation in 2021, it required employers to post salary ranges and a description of general benefits for both onsite and remote positions. Today, a dozen additional states and territories have laws in place, which also includes Washington, California, and Rhode Island as of January 2023.

The act of pay transparency establishes employee-friendly regulations and rights intended to bring more fairness to applicants and employees while providing additional details within job postings. The overall goal is pay equity and reduction of the pay gap.

This article from CNBC lists the current states, cities, and counties required to disclose salary.

If you are an employer impacted by this, these tips can help ensure you’re doing things the right way –

  • Review internal compensation structures: Analyze your current compensation model. Gather facts such as salaries, bonuses, and raises for existing employees.
  • Research market data: Salary market research tools are readily available even if you don’t have a dedicated HR or Comp team in place. This information will include specifics on salary ranges for geographic area, industry, and job function.
  • Create or modify appropriate pay bands: Use the market data and pair it with existing pay structures to create or modify appropriate salary bands across your organization.
  • Prepare managers: Questions will arise when pay transparency is required, from both job applicants and existing employees. People want to know how pay bands are determined and why they fall into a certain range. Internally, these are great opportunities for discussion during regular checks ins or annual reviews so no one is surprised.
  • Post the salary: The data is in, the pay bands are established, and the internal conversations are occurring. List the salary range within the job description or on an external job posting.

More cities and states will be enacting pay transparency laws in the future, so even if you aren’t impacted now, be prepared. An added benefit to being ahead of the curve is that disclosing this information can boost your brand reputation, attract applicants, and help retain current employees.


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