As pay transparency laws become increasingly common across the United States, employers must understand their obligations. These laws promote pay transparency, foster equity in salary practices, and reduce salary disparities between genders, races, and other categories. The range of regulations varies by state. This is part one of our two series blog posts; we will cover the states that have statewide pay transparency laws, what those laws entail, who is affected, and what employers need to know. Stay tuned for part two of our blog posts that covers the rest of the states with salary transparency laws.

Background on Pay Transparency Laws

Pay transparency is becoming increasingly important as more states and jurisdictions are adopting laws requiring employers to disclose salaries and prohibiting inquiries into salary history. These laws aim to decrease wage inequality and prevent employers from discriminating against job candidates or employees who inquire about or discuss salary.

Two federal laws forbid employers from discriminating against employees or applicants who discuss salary, including Executive Order 11246, which applies to federal contractors, and the National Labor Relations Act (NRLA), which applies to most businesses.

States with Statewide Pay and Salary Transparency Laws As of 2022

Alabama

• Type: Salary History Ban
• Location: Statewide
• Law: Clarke-Figures Equal Pay Act (the “Act”) went into effect September 1, 2019.
• Requirements: Employers may not retaliate against or decline to interview, hire, promote, or employ any applicants if they refuse to provide their salary history.
• Employers Affected: All employers.

California

• Type: Salary history ban and salary disclosure
• Location: Statewide
• Law: Equal Pay Act became law in 2016.
• Requirements: Employers must provide salary ranges and may not request salary history. Employers in San Fransisco may not ask for salary history or use it to determine pay.
• Employers Affected: All employers.
• Recent Legalization updates: Senate Bill 1162 becomes effective Jan 1, 2023, and requires employers with 15 or more employees to disclose the salary range in all job postings and provide a pay scale for an employee’s current role upon request.

Colorado

• Type: Salary disclosure
• Location: Statewide
• Law: Equal Pay for Equal Work Act became effective in 2021.
• Requirements: All employers looking to hire in Colorado must now disclose their hourly or salary compensation, benefits, and other forms of payment in their job postings. This law applies to any employer with at least one employee in Colorado, as well as those posting remote work roles that could be filled by a Coloradoan.
• Employers Affected: Employers with at least one employee in Colorado and multi-state employers where the role could be filled in Colorado.

Connecticut

• Type: Salary Disclosure
• Location: Statewide
• Law: An Act Concerning the Disclosure of Salary Range for a Vacant Position went into effect Oct 1, 2021.
• Requirements: Employers must provide salary wage ranges for a position earliest upon the applicant’s request or before or when an offer is made. Employers may not fail or refuse to provide wage range information for the position upon hiring the employee, changing the employee’s position, or upon the employee’s first request.
• Employers Affected: Per the law, an employer is defined as “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.”

Delaware

• Type: Salary History Ban
• Location: Statewide
• Law: House Bill 1 went into effect in December 2017.
• Requirements: Screen applicants based on salary history or inquire about the applicant’s salary history from the applicant or their current or former employers. Once an offer of employment and terms of compensation has been extended and accepted, employers are permitted to access this information to confirm salary history.
• Employers Affected: Employers and employer’s agents.

District of Columbia

• Type: Salary History Ban
• Location: District-wide
• Law: District Personnel Instruction No. 11-92 went into effect in November 2017.
• Requirements: Prohibits district government agencies from inquiring into a candidate’s salary history unless the candidate brings it up after an offer of employment has been made.
• Employers Affected: District government agencies.

Hawaii

• Type: Salary History Ban
• Location: Statewide
• Law: B. 2351went into effect in January 2019.
• Requirements: Employers may not inquire into applicants’ salary history or rely on the salary history when determining compensation during the hiring process.
• Employers Affected: Per the Act, employers are defined as an employer, employment agency, employee, or agent thereof.

Illinois

• Type: Salary History Ban
• Location: Statewide
• Law: 101-0177 went into effect in January 2019 and was updated in September 2019.
• Requirements: Employers may not inquire into the compensation history of candidates but are permitted to discuss salary expectations.

• In 2018, Chicago issued an order that prohibited city departments from asking about applicant salary histories.
• Employers Affected: All employers.

Maine

• Type: Salary History Ban
• Location: Statewide
• Law: LD278, an amendment to the Maine Human Rights Act, went into effect in 2019.
• Requirements: Employers may not inquire about candidates’ current or previous salary history directly or indirectly through an employment agency. However, if a prospective employee chooses to disclose their wage history independent of any requests or prompting by the employer or employment agency, the employer or agency is permitted to confirm this information before an offer of employment is made.

• Employers also cannot prohibit employees from sharing their own wages or asking into or disclosing information about another employee’s compensation.
• Employers Affected: All employers.

Maryland

• Type: Salary History Ban
• Location: Statewide
• Law: House Bill 123 went into effect in 2020.
• Requirements: Upon request, employers must provide applicants with the wage range for the position they applied for. Employers may not retaliate or refuse to interview, hire, or employ applicants if they do not provide salary history or requested salary information for the position they applied for.

• Employers also cannot prohibit employees from sharing their own wages or asking for or disclosing information about another employee’s compensation.

• Employers Affected: All employers.

Massachusetts

• Type: Salary History Ban
• Location: Statewide
• Law: Equal Pay Act (MEPA) went into effect in 2018.
• Requirements: Employers may not request salary history or screen candidates based on that information. However, if the applicant voluntarily provides this information or an offer of employment has been extended, they may confirm their prior wage history.
• Employers Affected: All employers.

States That Have Prohibited Salary History Bans

• Michigan
• Wisconsin

States with no pay transparency laws

• Alaska
• Arizona
• Arkansas
• Florida
• Idaho
• Indiana
• Iowa
• Kansas
• Minnesota
• Montana
• Nebraska
• New Mexico
• North Dakota
• Oklahoma
• South Dakota
• Tennessee
• Texas
• West Virginia
• Wyoming

What Employers Need to Know

Employers need to familiarize themselves with their respective state’s current pay transparency policy before implementing any type of disclosure rules within their organization. Employers should also ensure they comply with federal anti-discrimination regulations regarding employee compensation decisions and consider conducting an internal audit of current employee compensation practices if needed. Finally, organizations should establish clear communication protocols so that employees know which types of conversations are appropriate when discussing salary information internally amongst colleagues or externally with job applicants or recruiters.

Conclusion:

Pay transparency laws are becoming increasingly common across the United States to promote pay transparency, foster equity in salary practices, and reduce salary disparities between genders, races, and other categories. It is essential for businesses operating in states with these types of regulations to understand what they entail and take steps necessary to remain compliant —or risk facing serious financial penalties or lawsuits designed to protect workers’ rights. By taking proactive measures now, employers can avoid costly legal issues down the road.

About Astrix

Astrix is the unrivaled market leader in creating and delivering innovative strategies, solutions, and people to the life science community. Through world-class people, processes, and technology, we work with clients to fundamentally improve business and scientific outcomes and the quality of life everywhere.

Founded by scientists to solve the unique challenges of the life science community, Astrix offers a growing array of strategic, technical, and staffing services designed to deliver value to clients across their organizations.

Disclaimer

This information is purely for educational purposes and is not intended to be used as legal advice. Please consult your legal counsel for any questions related to your business practices and policies related to applicable laws.

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