With federal workplace regulations easing, state and local pay transparency laws are tightening. Many states now require salary disclosures in job postings, and employers must adjust by the end of the year to avoid penalties. Here’s what you should know and five key tips to stay compliant.
1. Monitor State and Local Laws
- Several states, including Colorado, California, and New York, mandate salary disclosures.
- Cities like NYC, Cincinnati, and Jersey City have specific rules.
- New states like New Jersey, Massachusetts, and Vermont recently joined the trend.
- Laws vary by location and continue to change, so staying informed is essential.
2. Understand Your Responsibilities
- Employers must disclose wage ranges in good faith in job postings.
- Retaliation against employees or applicants who ask about pay is prohibited.
- Some states require transparency about benefits, bonuses, and commissions.
- Certain jurisdictions, like Massachusetts, now mandate pay data reporting for larger employers.
3. Avoid Penalties and Legal Risks
- If the violation on an active job posting is not remedied within the cure period, the employer will be subject to a civil penalty of up to $500 for a first offense, $2,500 for a second offense, and $10,000 for a third or subsequent offense.
- For violations on non-active job postings, the employer will be subject to a civil penalty of up to $250 for a first offense, $2,500 for a second offense, and $10,000 for a third or subsequent offense.
- Noncompliance can lead to significant fines:
- Illinois imposes penalties from $500 to $10,000 for repeated violations.
- Many states have strict enforcement and no grace periods for some offenses.
- Pay transparency lawsuits are increasing, particularly in states like Washington, where new laws have triggered class action litigation from job applicants.
4. Consider Remote Work Compliance
- Some laws apply to remote jobs, even if the employer is based elsewhere.
- Employers hiring across multiple states must evaluate which laws impact their job postings.
- Failing to comply with an out-of-state law could result in unexpected fines or lawsuits.
5. Review Policies and Train HR Teams
- Update hiring and compensation policies to align with pay transparency laws.
- Provide ongoing training for HR teams and hiring managers.
- Conduct regular audits of pay practices to identify and address compliance gaps before they become legal issues.
Final Takeaway:
Pay transparency laws are evolving rapidly, and employers must act now to stay compliant. Reviewing policies, staying informed, and proactively addressing requirements will help avoid penalties, legal risks, and reputational damage.