A growing number of state and local jurisdictions continue to enact laws to promote pay equity. Some of these laws prohibit employers from banning discussions about pay and/or restrict employers from inquiring about an applicant’s pay history. Others require employers to provide pay range information to applicants and employees. To help you stay up-to-date on this growing area, here's an overview of these three types of laws and where they have been enacted.
1. Laws prohibiting pay secrecy policies
Federal law
Under Section 7 of the National Labor Relations Act (NLRA), employees have, among other things, the right to act together to improve wages and working conditions and to discuss wages, benefits, and other terms and conditions of employment, with or without a union. The National Labor Relations Board (NLRB), which enforces the NLRA, and many courts have found that pay secrecy or pay confidentiality rules violate Section 7 rights.
As such, all employers should avoid employment actions or implementing policies that could be construed to restrict employees' rights under the NLRA. Instead, take steps to better communicate information about your company's compensation program and how employees' salaries and wages are determined.
State and local laws
Twenty-one states and the District of Columbia have enacted laws that expressly prohibit employers from banning employees from discussing their own wages. Currently, they include:
Some local jurisdictions have also enacted similar laws. Check your state and local laws for details.
2. Laws restricting inquiries about salary history
Several state and local jurisdictions have enacted laws with restrictions on pay history inquiries. While these laws vary, they typically prohibit employers from:
- Seeking salary history information about an applicant, with limited exceptions
- Asking about current or former salary on application forms and in interviews
- Relying on an applicant's salary history to determine job or salary offers
- Asking for or providing salary history information during reference checks, with limited exceptions
The idea behind these laws is that applicants’ pay history may reflect discriminatory pay practices of a previous employer and result in lower wages in the new job if the information is used to set pay. The following states have enacted restrictions on salary history inquiries in the private sector:
The local jurisdictions that have done so include:
Check your state and local laws for details.
Permitted questions
These laws don’t typically prohibit employers from asking an applicant what they expect to make in the new position. Employers may also provide the applicant with the salary range for the role and ask if the range is acceptable. When asking such questions, employers in jurisdictions that restrict pay history inquiries may want to make clear the applicant shouldn’t reveal what they earned in their current or previous position.
3. Laws requiring disclosure of pay ranges
Several states and local jurisdictions require private sector employers to disclose the pay range for a position to an applicant or employee. These laws generally have one or more of the following requirements:
- Employers must provide the salary range upon request of external/internal applicant.
- Employers must provide salary range to applicants automatically at a certain point in the hiring process (e.g., at the time a job offer is made).
- Employers must include salary range information in any job posting.
The table below lists some examples of locations with these requirements:
State or local jurisdiction |
Pay disclosure requirements |
California |
|
Colorado |
In each posting for each job opening, all employers must disclose:
|
Connecticut |
All employers must:
|
Maryland |
Upon request, all employers must provide an applicant with the wage range for the job for which the applicant applied. |
Nevada |
All employers must:
|
Jersey City, New Jersey |
Employers with five or more employees that use any print or digital media circulating within the city to provide notice of employment opportunities must disclose a minimum and maximum salary and/or hourly wage, including benefits, in the posting or advertisement. |
New York State (effective 9.17.2023) |
When advertising a job, promotion or transfer opportunity, employers with four or more employees must state the minimum and maximum annual salary or hourly wage for the position. |
New York City |
When advertising a job, promotion or transfer opportunity, employers with four or more employees must state the minimum and maximum annual salary or hourly wage for the position. |
Albany County, New York |
When advertising a job, promotion or transfer opportunity, employers must state the minimum and maximum annual salary or hourly wage for the position. |
Ithaca, New York |
When advertising a job, promotion or transfer opportunity, employers with four or more employees must state the minimum and maximum annual salary or hourly wage for the position. |
Westchester County, New York |
When advertising a job, promotion or transfer opportunity, employers with four or more employees must state the minimum and maximum annual salary or hourly wage for the position. |
Cincinnati, Ohio |
Upon request, employers with 15 or more employees must provide the pay scale for a position to an applicant who has received a conditional offer of employment. |
Toledo, Ohio |
Upon request, employers with 15 or more employees must provide the pay scale for a position to an applicant who has received a conditional offer of employment. |
| Rhode Island |
All employers must:
|
Washington |
In each posting for each job opening, employers with 15 or more employees must disclose the wage scale or salary range and a general description of all of the benefits and other compensation. |
Remote workers
In many cases, these laws require that a pay range be included in the job posting/disclosure if the position may be filled in the jurisdiction, either in person or by someone working remotely from that jurisdiction.
For example, Washington’s law covers roles based in a Washington location or that could be performed by a Washington-based employee. Work tied to a particular location, work capable of being performed in the jurisdiction, including remote work, or work that could be performed partly in the jurisdiction may be covered by the requirements.
In New York, the state’s pay disclosure requirements apply to any job, promotion or transfer opportunity that will be physically performed, at least in part, in the state of New York. It also includes jobs that will be physically performed outside of New York, if they report to a supervisor, office, or other work site in New York.
Colorado’s requirements apply to remote work performable in Colorado or elsewhere. The state has released guidance indicating the requirements apply even if the posting for remote work states that the employer will not accept Colorado applicants.
Check your state and local laws for details, review any guidance published by the state, and consult legal counsel as needed.
Pay range
Many of these laws require employers to post/disclose the minimum and maximum pay range they reasonably/genuinely/in good faith expect to pay a successful applicant for the role. Typically, “good faith” means the salary range the employer at the time of the listing genuinely believes they are willing to pay successful applicants. Therefore, statements like “$55,000 per year and up” or “up to $31 per hour” are unlikely to comply with such laws. Further, an unrealistic range, such as “$15 per hour to $1,000 per hour,” is unlikely to comply with such laws. Check your state and local laws for details.
Salary negotiations
These laws don’t prohibit an employer from negotiating pay. Additionally, none of the laws or guidance released thus far have indicated that the laws prohibit employers from ultimately paying more than the posted/disclosed range, as long as the range, at the time of posting/disclosure, was what the employer reasonably/genuinely/in good faith believed it would be willing to pay for the job. It’s a best practice to document the reasons behind compensation decisions.
Conclusion
Employers should understand the pay transparency laws that apply to them and ensure compliance. Even if your state or city hasn't enacted such a law yet, many jurisdictions are contemplating such laws, so watch for developments closely.
What To Do When An Employee Asks for a Raise
Despite your best efforts to develop a competitive compensation program, there may be times when employees try to negotiate their pay. Currently, inflation pressures and a tight labor market may prompt more employees to ask for an increase in pay. Here are some helpful hints for preparing for and handling these types of situations.