Pay Transparency

Pay Transparency

Despite the many advances in equity, pay inequity for women and people of color still exists, resulting in a significant pay gap among people holding down similar jobs. This means women and minority groups often receive lower pay than their white male counterparts for performing identical work. The move to remedy pay equity started in 1930 with the Fair Labor Standards Act. The 1960s brought the Equal Pay Act and the Civil Rights Act. 

There has also been state level actions to close the pay gap, but there is still work to be done. Pay transparency is one tool to help ensure pay equity. They aim to decrease wage inequality and prevent employers from discriminating against job candidates or employees who inquire about or discuss salary. This page discusses federal and state laws for pay transparency, pay equity, and salary disclosure.

Pay transparency laws are regulations that require employers to disclose information about employee compensation, either to the employees themselves or to the public. These regulations require employers to be more transparent with salary ranges and benefits, and they aim to help promote fairness and equity in the workplace. For example, employers covered under this law must list the salary or hourly wage on their job posting. Some states also require employers to include salary and wage information in internal job postings as well as for employees who are seeking a promotion. 

Pay equity means equal compensation for workers with similar job duties regardless of their demographics, such as gender, race, or ethnicity. For example, if two teachers teach the same grade and subject and have a similar educational background and tenure, then the two should both receive the same compensation. 

Pay equity impacts everyone based on gender, sexual orientation, race, and gender identity.  However, it is important to note that some face disparities disproportionately. In 2022, women earned 82 percent of what men earned. Hispanic or Latina women earned 58 cents for every dollar white men earned, and Black women earned 63 cents. This is known as the gender wage gap.  

 

There are other factors that contribute to the gender wage gap, such as demographic factors, Family Responsibilities Discrimination (FRD), student loans, and more. 

Title VII of the Civil Rights Act of 1964

 

Title VII prohibits discrimination based on race, gender, color, religion, and national origin. Title VII broadly prohibits sex discrimination in employment. The law covers private or public sector employers with 15 or more workers, state and local government agencies, employment agencies, and apprenticeship programs. There is no requirement that the jobs must be substantially equal. See the law for more information.

 

Equal Pay Act (EPA) of 1963 

 

The EPA requires employers to pay men and women equally for doing the same job at the same workplace. The EPA does not have a minimum number of employees required for coverage. In addition, it covers multiple forms of compensation: salary, overtime, bonuses, life insurance, vacation and holiday pay, and more. See the law for more information.

 

The AAUW provides a source for knowing your rights under the EPA. 

 

Yes. The National Labor Relations Act, employees have the right to communicate with other employees at their workplace about their wages. See the National Labor Relations Board website for more information. Some states have laws with restrictions on when you may discuss your salary with co-workers. Contact your state department of labor for more information.

Alabama. The Clarke-Figures Equal Pay Act prohibits all employers from refusing to hire, promote, or employ an applicant because the applicant does not provide their salary history. This Act also prohibits an employer paying a lower rate of an employee of a different race or sex for the same work. See the law for more information. See the law for more information.

 

California: California employers with at least 15 employees, and with at least one located in California, must share pay scales in job postings. In addition, upon reasonable request, the employer shall provide the pay scale for a position to an applicant applying for employment as well as an employee for the position in which the employee is currently employed.  Employers must also share salary and wage information with current employees upon request. 

 

Employers are not permitted to ask for a job applicant’s salary history. The posting need not be for a job that is performed in California; the law applies to remote work positions too. In addition, employers are also prohibited from using salary history in their employment decisions for an applicant. Applicants may, “upon reasonable request” request pay scale information. This applies to all employers.

 

See the law for more information.

Colorado: The Colorado Equal Pay for Equal Work Act prohibits all employers from discriminating because of sex (including gender identity) — alone or with another protected status — by paying less for substantially similar work in terms of skill, effort, and responsibility. Under the act, employers are required to:

  • post compensation information on job postings, 
  • notify employees of promotional opportunities, and maintain records of wages. 
  • put application deadlines in their external job postings and internal promotional notices.  
  • notify, within 30 days of every hire or promotion, any Colorado employee with whom the selected candidate will regularly work of the new hire or promotion.  
  • inform employees in positions with a defined, objective career progression of the requirements for advancement and what their pay will be if they advance. 
  • include compensation, benefits, and the application process for jobs that are performed, or could be performed (e.g., remote work) in Colorado.

The law applies to Colorado employers with at least one employee, as well as out-of-state employers. This law also prohibits employers from seeking an applicant’s salary history when determining how much the applicant would be paid. See the law for more information. 

 

Connecticut: Connecticut law requires employers to disclose to applicants and employees the salary ranges for positions upon request or before an applicant receives an offer. In addition, employers cannot:

 

prohibit employees from discussing their wages with co-workers, 

prohibit an employee from requesting information about the wages of another employee, 

require employees to sign anything that takes away rights to discuss their salary with other employees, require employees to sign a waiver denying their right to inquire about the wages of another employee, or bring in a direct or third party to inquire about an applicant’s salary history.

 

“Employer” means any individual, corporation, limited liability company, firm, partnership, voluntary association, joint stock association, the state and any political subdivision thereof and any public corporation within the state using the services of one or more employees for pay; (2) “Employee” means any individual employed or permitted to work by an employer.

 

See the law for more information.

 

Delaware: Delaware law makes it unlawful for an employer or their agent to screen applicants for employment based on salary history and seeking compensation history from an applicant’s former employer. This applies to all employers.

 

District of Columbia: According to D.C. law, government agencies may not ask applicants about their salary history unless the applicant has an offer from the employer. 

 

Hawaii: Hawaii’s Equal Pay Act prohibits employers from asking applicants about their compensation from a previous job, and they cannot use past salary to determine the employee’s pay. This law also gives employees the right to discuss their salary with coworkers without retaliation. The law applies to all employers. See the law for more information.

 

Illinois: Illinois prohibits employers from asking about pay history, benefits, or other forms of compensation. Employees who are full-time, part-time, temporary, or permanent are covered under this law. Employers also may not use recruiters or third parties to determine the candidate’s salary history. The law does not apply if the applicant is internal or if the salary history is a public record. Salary history may be disclosed voluntarily by the applicant. All employers are covered by the law. See the law for more information.

 

Maine: Employers may not seek information about a prospective employee’s pay history until after a job offer has been negotiated. The law applies to all employers. See the law for more information.

 

Maryland. The Maryland Equal Pay for Equal Work Act requires employers to provide an applicant, upon request, with the wage range for the position for which they applied. Employers are not allowed to retaliate or discriminate against an applicant who does not provide a wage history or requests a wage range from the employer. The law also restricts employers from asking about an applicant’s salary history during the hiring process. Under the new law, employers are prohibited from:

  • Relying on an applicant’s wage history in screening or considering the applicant for employment or in determining their wage.
  • Seeking an applicant’s wage history either orally, in writing, or through an employee, agent, or the applicant’s current or former employer.

The Act permits employers to inquire about a prospective employee’s wage history only after extending a job offer. The purpose of such an inquiry must be to justify a salary offer that exceeds the initial one.

The law applies to all Maryland employers. See the Maryland website for more information.

 

Massachusetts: Employers cannot request salary history information. They can, however, confirm prior history if volunteered by the applicant or if an offer has been extended. The law applies to all employers. See the law for more information.

 

Missouri: All employers with six or more employees are not allowed to ask about salary history or use it when determining salary or other compensation. Employers also cannot retaliate against employees for not disclosing their salary to the employer. See the law for more information.

 

Nevada: All employers are required to share the wage or salary range for a position to applicants who have completed an interview for such a position. This includes internal promotion or transfers. In addition, employers may not seek the wage or salary history of an applicant for employment or rely on the wage or salary history of an applicant to determine:
 

Whether to offer employment to an applicant; or

The rate of pay for the applicant; or  

Refuse to interview, hire, promote or employ an applicant,
or discriminate or retaliate against an applicant if the applicant does not provide wage or salary history.

 

See the law for more information. 

 

New Jersey: Employers may not screen applicants based on their pay history. Employers may not require that an applicant’s prior wages, salaries or benefits meet minimum or maximum criteria. If an applicant voluntarily, without employer prompting or coercion, discloses pay history, an employer may verify the applicant’s pay history and may also consider pay history in determining the applicant’s salary, benefits and other compensation. 

 

After an offer of employment that includes an explanation of the overall compensation package has been made to the applicant, an employer may request the applicant provide the employer a written authorization to confirm pay history. The law applies to all employers. See the law for more information.

 

Jersey City, NJ. Jersey City’s law requires a covered employer to include a minimum and maximum salary and/or hourly wage and benefits in job postings. It applies to all employers in the city with five or more employees. Employers with their  principal place of business in Jersey City and who distribute print and/or digital job postings are covered by the law. See the law for more information.

 

New York: Employers with four or more employees are required to include the compensation or “range of compensation” for every advertisement for a job, promotion, or transfer opportunity if the job can or will be performed, at least in part, in the state of New York. The law also requires employers to include the job description for every advertisement for a job, promotion, or transfer opportunity, if such description exists. The law also prohibits employers from asking applicants about their salary history and includes an anti-retaliation provision. See the law for more information.  

 

A few cities have passed their own laws. In Ithaca, all employers with four or more employees must publish the salary range for each new job. See the Ithaca website for more information. In New York City, employers with at least four employees must disclose salary ranges in job advertisements. See this New York City fact sheet for more information.

 

North Carolina: State agencies may not request pay history information from applicants and may not rely upon previously obtained prior salary information in setting pay. See the Executive Order for more information. 

 

Rhode Island:  Employers with one or more employees must provide a wage range for any position, including open jobs, upon request. The law requires employers to share wage ranges for current or prospective roles upon the request of an applicant or current employee. 

 

In addition, employers may not seek pay history, nor can they rely on pay history when considering an applicant for employment or determining pay. They may, however, confirm and rely on pay history after an employment offer is made to support a higher wage than initially offered. Employers also must provide a wage range for a given position. The law applies to all employers. 

 

See the law for more information. 

 

Vermont: Employers may not request applicants’ pay history. If that information is volunteered, employers may only confirm it after a job offer has been made. The law applies to all employers. See the law for more information.

 

Virginia: Virginia law prohibits employers with 25 employees or more employees from:

 

requiring as a condition of employment that a prospective employee provide or disclose the prospective employee’s wage or salary history. 

 

attempting to obtain the wage or salary history of a prospective employee from the prospective employee’s current or former employers. 

 

requesting a prospective employee to complete an application for employment that includes a question inquiring about the prospective employee’s wage or salary history.

 

asking a prospective employee in an employment interview any question intended to obtain information about the prospective employee’s wage or salary history. 

 

See the law for more information.

 

Washington: Employers with 15 or more employees are required to post the wage or pay scale information and all other forms of compensation in a job posting. This applies to employees who are applying for an internal transfer or promotion. In addition, Employers may not seek pay history. They may, however, confirm that information if the applicant voluntarily discloses it or if an offer has been extended.

 

See the law for more information.

Employers should make pay equity a core part of their workplace culture. A few steps that employers should consider are removing bias from the hiring process, encouraging employees to ask questions about their salary information without fear of retaliation, make sure compensation information is posted on the job listing, and encourage employees to discuss salary information with each other without fear of retaliation. 

 

Additional resources for employers include:

Building pay equity into your culture, policies and practices

Pay Equity: What It Is and Why It’s Important

What Can I do to Promote a Culture of Pay Equity

How to Identify — and Fix — Pay Inequality at Your Company

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