Employers are paying close attention to pay transparency laws, which are the latest trend in employment legislation. Often expanding on existing pay equity laws, many state and local governments have enacted or proposed legislation with the stated goal of reducing pay inequity and combating wage discrimination.
Hawaii and Washington, DC, each passed legislation that went into effect in 2024. Illinois and Minnesota rang in the new year with pay transparency legislation which took effect on January 1. And Massachusetts and New Jersey each passed laws which will take effect later in 2025.
The Salary Transparency Act is currently pending before US Congress. If passed, it would amend the Fair Labor Standards Act (FLSA) and make it unlawful for an employer to fail or refuse to disclose the wage or wage range for a position in a job posting, employee opportunity, or upon hire, and at least annually. The federal law would apply to all employers in the United States. The Act is in the very early stages of consideration and has not yet passed the US House or Senate.
Pay transparency laws typically require employers to disclose the wages or wage range for a particular position to current and/or prospective employees. However, each state’s transparency law differs slightly in its application, including which employers are covered, when employers must disclose pay ranges or other details, and to whom employers must disclose them. For this reason, multi-state employers may find it...
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