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Being clear and transparent about employee compensation is a step towards pay equity. So, more and more states are starting to require it in job postings.
And, many companies are listing salary info even if it’s not required by law.
What Are Pay Equity Laws?
Pay equity laws are rules designed to ensure that people receive fair compensation for performing work of equal value. So, these laws aim to eliminate pay discrimination based on factors like gender, race, national origin, or sexual orientation. Therefore, by addressing pay inequity, they seek to close the gender pay gap, racial wage gap, and other pay disparities in the workplace.
Definition and Purpose of Pay Equity Laws
At their core, pay equity laws are about achieving equitable pay for similar work. For example, if two employees perform comparable work or hold similar roles, they should be paid equally unless there’s a bona fide factor, such as experience or education, justifying a significant difference in pay.
The purpose of these laws is to eliminate unequal pay practices that disadvantage certain groups, including women workers, women of color, and native women. These laws also address occupational segregation and the undervaluing of work traditionally performed by female workers or women employees.
So, by promoting transparent pay practices and requiring employers to conduct pay equity audits, these laws help ensure fair pay practices and equal opportunities for everyone.
Key Differences Between Pay Equity and Pay Equality
It’s easy to confuse pay equity with pay equality, but they address different issues:
Pay Equality: Ensures that all employees doing the same job or equal work receive the same base salary, regardless of their gender, race, or other protected characteristics. For example, under federal equal pay laws, a female worker and a male worker in identical job titles must receive equal compensation.
Pay Equity: Focuses on ensuring fairness in pay for similar work or work of equal value. Therefore, it considers whether people in comparable roles receive equitable pay, even if their job classifications or responsibilities differ slightly. So, this concept often requires conducting pay equity analyses or reviewing pay data to uncover hidden pay differences or opportunity gaps.
In practice, pay equity legislation goes beyond equal pay day celebrations to address systemic pay equity issues. It also examines whether business leaders and hr leaders make fair compensation decisions based on legitimate factors, rather than perpetuating opportunity gaps or pay discrimination.
The Broader Impact of Pay Equity Laws
Pay equity laws, such as the California Equal Pay Act, have pushed employers across the United States to review their fair pay practices. Many companies now use statistical methods to conduct pay equity audits and analyze median pay gaps for various groups, such as black women, white women, and white men.
These laws also promote transparent pay practices, requiring organizations to disclose pay data and justify pay differences. Therefore, this helps combat the unadjusted pay gap, which refers to disparities in median salary without accounting for legitimate factors like geographic location or experience.
For example, a recent study by the U.S. Census Bureau found that women’s wages remain lower than men’s across many industries, including technology companies. So, by enforcing equal pay laws, state legislatures and the federal government aim to ensure fair pay decisions for new hires and existing employees alike.
Steps Employers Can Take Toward Pay Equity
To address pay equity issues, employers can take the following steps:
- Conduct Regular Pay Audits: Implement pay equity audits on an annual or semi-annual basis to uncover pay disparities. So, use statistical methods to assess differences in compensation across job classifications, gender, race, and other protected categories. This process ensures that pay differences are based on bona fide factors, like skills or experience, rather than discriminatory practices. Therefore, by tracking current trends and comparing pay data to the previous year, you can identify and address hidden biases in compensation decisions.
- Develop Pay Transparency Policies: Draft and share clear guidelines that explain how base salary and bonuses are determined. So, encourage transparent pay practices by publishing pay ranges for open roles and explaining compensation decisions to employees. Thus, this approach fosters trust and helps reduce the unadjusted pay gap. Additionally, consider revising hiring practices to include open discussions about pay during the new hire process and ensure fair compensation packages for employees in similar roles.
- Ensure Compliance: Stay updated on the latest federal laws, state laws, and local laws related to equal pay. For example, laws like the California Equal Pay Act and Title VII of the Civil Rights Act require employers to provide equal pay for work of equal value. Therefore, employers should review their policies with legal counsel to ensure alignment with pay equity legislation. Additionally, adopting best practices, such as training managers on fair pay practices and documenting reasons for pay decisions, can help you maintain compliance and avoid legal risks, like an equal pay act claim.
Pay Equity Laws You Should Know
So, are you compliant? Pay equity laws vary based on the state you are hiring in. Here’s a list of 6 pay equity laws by state where employers are required to list salary ranges in job postings or disclose them during the hiring process:
1. California Pay Equity Law
- Passed Date: August 30, 2022
- Effective Date: January 1, 2023
Impact on Job Descriptions
California passed a law (Senate Bill 1162) requiring employers (with 15 or more employees) to post salary information on all job postings. The law aims to close wage gaps.
SB 1162 will impact the largest U.S.companies like Alphabet Inc, Meta Platforms, and Walt Disney.
California Senator, Monique Limón said:
“This is a big moment for California workers, especially women and people of color who have long been impacted by systemic inequities that have left them earning far less than their colleagues. As we continue to build a sustainable economy, we must ensure every worker is paid equitably.”
source: Los Angeles Times
2. Colorado Pay Equity Law
- Passed Date: May 22, 2019
- Effective Date: January 1, 2021
Impact on Job Descriptions
The Colorado Pay equity law:
“requires employers to include compensation in job postings, notify employees of promotional opportunities, and keep job description and wage rate records.”
source: Colorado Department of Labor and Employment
When this new law went into effect in 2021, companies like Lime Bike, Nike, Johnson & Johnson, Twitter, Oracle & others faced a twitterstorm over using “except in Colorado” language in their job postings.
3. Colorado Salary Transparency Law
- Passed Date: 2021
- Effective Date: January 1, 2024
Impact on Job Descriptions
The Colorado Salary Transparency law states that:
employers must share pay info in job ads and promotions. If there’s a pay issue, employees can claim it within six years instead of three. Also, new mandates will govern the investigation, mediation, and enforcement of wage discrimination claims. So, Colorado’s Department of Labor and Employment will be better supported to handle these claims.
4. New York City Pay Equity Law
- Passed Date: January 15, 2022
- Effective Date: November 1, 2022
Impact on Job Descriptions
The main impact of the NY pay equity law on job descriptions is that it requires employers with 4+ employees to list:
“a “good faith” minimum and maximum salary range on for all advertised NYC job, promotion and transfer opportunities.”
source: National Law Review
If companies fail to include a salary range, it will be considered an unlawful discriminatory practice under the City’s Human Rights Law.
5. New York Salary Transparency Law
- Effective Date: September 17, 2023
Impact on Job Descriptions
The main impact of the NY Salary Transparency Law on job descriptions is that it requires employers to disclose the compensation or a “good faith” minimum and maximum hourly/salary range for any advertised job, promotion, or transfer opportunity.
6. Ithaca Salary Transparency Law
- Effective Date: September 1, 2022
Impact on Job Descriptions
The main impact on employers of the Ithaca Salary Transparency Law is that employers must mention the least and most that they will pay for a job or promotion.
7. Nevada Pay Equity Law
- Effective Date: October 1, 2021
Impact on Hiring
Under the law (Senate Bill 293), employers in Nevada can’t ask applicants about their salary history. They must disclose salary range details to candidates automatically after the first interview. For current employees seeking promotion or transfer, employers must give pay ranges after the employee completes the interview and requests the information.
The law applies to private employers, staffing firms, and state, county, and local governmental agencies in Nevada.
8. Ohio Pay Equity Law
- Effective Date: June 1, 2020
Impact on Hiring
Ohio Rev. Code 4111.17 says that Ohio employers are restricted from asking candidates about their salary history. And they must also disclose the pay range after a job offer or when the candidate asks for it.
Here are the full wage disclosure requirements:
Employers in Cincinnati who employ at least 15 employees within Cincinnati are required to provide an applicant, upon reasonable request, the pay scale for a position after the applicant has been given a conditional offer of employment.
Employers located within Toledo who employ at least 15 employees for pay within Toledo must, upon reasonable request from an applicant and after the applicant has been given a conditional offer of employment, provide the applicant a pay scale for the position sought.
source: Fisher Phillips
9. Washington Pay Equity Law
- Passed Date: March 30, 2022
- Effective Date: January 1, 2023
Impact on Job Descriptions
The WA pay equity law requires Washington state employers to include a salary range, benefits information, and other compensation details in job postings.
According to SHRM:
“Specifically, the new law will require Washington employers with 15 or more employees to affirmatively disclose in all job postings a wage scale or wage range, as well as all of the benefits and other compensation to be offered, in connection with the position, regardless of applicant request.”
10. Washington Salary Transparency Law
- Effective Date: January 1, 2023
Impact on Job Decriptions
The Washington Salary Transparancy Law requires employers to display salary range, benefits, and other pay details in job ads.
11. Westchester County Pay Transparency Law
- Effective Date: November 6, 2022
Impact on Job Descriptions
The Westchester County Pay Transparency Law requires employers of 4 or more workers to show the least and most that they will pay on their job postings.
12. British Columbia Pay Transparency Act
- Effective Date: November 1, 2023
Impact on Job Descriptions
The British Columbia Pay Transparency Act requires that salary or wage information is included in all publicly advertised job postings. Employers do not need to include bonus pay, overtime pay, commissions, tips, or benefits.
13. Newfoundland Pay Equity and Pay Transparency Act
- Passed Date: October, 2022
- Effective Date: January 1, 2026
Impact on Job Descriptions
The Newfoundland Pay Equity and Pay Transparency Act requires employers to include salary ranges on their job postings and will be prohibited from asking employees or applicants about salary histories or penalizing them for engaging in salary discussions.
Source What We Heard
14. Prince Edwards Island Employment Standards Act
- Effective Date: June 1, 2022
Impact on Job Descriptions
The Prince Edward Island Employment Standards Act requires that publicly advertised job postings include the expected pay or pay range for all positions.
Source An Act to Amend the Employment Standards Act
15. Hawaii Pay Transparency Law
- Effective Date: January 1, 2024
Impact on Job Descriptions
The Hawaii Pay Transparency Law requires employers to disclose the hourly rate or salary range that reasonably reflects the actual expected compensation for each job listing.
16. Illinois Equal Pay Act
- Effective Date: January 1, 2025
Impact on Job Descriptions
The Illinois Equal Pay Act requires employers with at least 15 employees to include pay scale and benefits in all job postings.
17. Maryland Wage Range Transparency Act
- Effective Date: October 1, 2024
Impact on Job Descriptions
The Maryland Wage Range Transparency Act requires all employers to disclose:
(1) the wage range for all positions, and
(2) a general description of benefits and any other compensation.
The wage range is defined as “the minimum and maximum hourly rate or salary for a position.
18. Minnesota Pay Transparency Law
- Effective Date: January 1, 2025
Impact on Job Descriptions
The Minnesota Pay Transparency Law requires employers with 30 or more employees to include a pay range or fixed pay rate in all job postings. The listed pay range must be a “good faith estimate” by the employer and cannot be open ended. Postings must also include a general description of benefits and other compensation.
19. Rhode Island Equal Pay Law
- Effective Date: January 1, 2023
Impact on Job Descriptions
The Rhode Island Equal Pay Law requires that employers provide the wage range for a position when
(1) the applicant requests, and prior to discussing compensation,
(2) at the time of hire or when the employee moves to a new position, and
(3) during the course of employment, and at the employee’s request.
Source Rhode Island law expands the state’s equal pay law effective January 1, 2023
20. Vermont Act 155
- Passed Date: June 4, 2024
- Effective Date: July 1, 2025
Impact on Job Descriptions
The Vermont Act 155 requires employers with 5 or more employees to disclose the compensation or compensation range for a particular position.
21. Washington DC Wage Transparency Act
- Passed Date: January 12, 2024
- Effective Date: June 30, 2024
Impact on Job Descriptions
The Washington DC Wage Transparency Act requires employers to include a pay range in all job postings and bars employers from asking job applicants about their prior salary history.
22. Remote Worker Pay Transparency
- Effective Date: January 1, 2021
Impact on Job Descriptions
The Remote Worker Pay Transparency laws that require employers to include pay or salary ranges in job descriptions for remote workers. To avoid legal challenges, we recommend that you disclose hourly or salary compensation (or a range) in remote postings.
23. Massachusetts Pay Transparency Law
- Passed Date: July 31, 2024
- Effective Date: July 31, 2025
Impact on Job Descriptions
The Massachusetts Pay Transparency Law requires employers with at least 25 employees to disclose salary ranges in job postings (defined as “the salary range or hourly range that the covered employer reasonably and in good faith expects to pay” for the position at the time of posting).
24. New Jersey Pay Transparency Law
- Passed Date: November 18, 2024
- Effective Date: June 1, 2025
Impact on Job Descriptions
The Pay Transparency Law requires employers with 10 or more employees to include a salary or pay range in job postings.
Source Update: Governor Murphy Signs NJ Pay Transparency Legislation
Ongig Features for Pay Equity and Transparency
Ensuring salary transparency in your job postings is a highly effective method for attracting qualified candidates, and in many jurisdictions, it’s also a legal requirement. But when you’re tasked with revising hundreds of job descriptions with a sizeable team, how do you maintain transparency consistently?
The answer is to utilize a tool capable of assessing these details at scale. Considering something like a salary compliance tracker is a step in the right direction.
With Ongig’s Text Analyzer, you can monitor salary compliance effectively across all your job descriptions. This tool proves invaluable, especially when generating a large volume of JDs with numerous collaborators. While human oversight remains crucial, the tool streamlines the process, making it more efficient and less time-consuming. In doing so, it helps ensure your job listings are both compliant and transparent.
Take a look at this helpful video from Ongig’s Head of Content and Patnerships, Heather Barbour Fenty:
Moving Forward with Pay Equity
While progress has been made, there is still work to do. So, employers must work with legal counsel to comply with local laws, state laws, and federal laws like Title VII of the Civil Rights Act and the Federal Equal Pay Act. Therefore, implementing best practices such as conducting regular pay equity analyses, addressing median pay gaps, and reviewing compensation decisions can help.
With ongoing efforts, pay equity laws have the potential to close the gender wage gap, provide equal access to leadership roles, and eliminate pay discrimination on the basis of race or other protected characteristics. So, this ensures that all employees, regardless of their background, have the chance to achieve fair compensation and equal opportunities in the workplace.
Why I wrote this:
At Ongig, we help employers include pay ranges for job postings by state so you remain compliant with your state’s pay transparency law (and attract more top talent). Kindly click the demo request button to learn more.
Shout-outs:
- Nevada Joins Other States in Creating Pay Equity Law (Fisher Phillips)
- California Passes Law Requiring Companies to Post Salary Ranges on Job Listings (by Jeff Green and Tiffany Stecker)
- New California law will require job postings to include salary ranges (by Jonah Valdez)
- Washington State to Require Salary Ranges in Job Posts (by Roy Maurer)
- Ohio Pay Equity (by Fisher Phillips)
- Colorado Equal Pay for Equal Work Act, Part 2 (by CO Dept. of Labor and Employment)
- What We Heard (by Newfoundland and Labrador)
- An Act to Amend the Employment Standards Act (by Andrea MacRae)
- Rhode Island law expands the state’s equal pay law effective January 1, 2023 (by EY)
- Update: Governor Murphy Signs NJ Pay Transparency Legislation (by Seyfarth)
