Bills requiring salary ranges in job postings have become a priority for several state legislatures, most recently Illinois, adding to the variety of pay transparency rules employers must learn to navigate nationwide.
Illinois and Hawaii soon will join a fast-growing list of state and local governments requiring salary information in job ads, assuming the states’ governors, both Democrats, sign the legislation (Illinois HB 3129 and Hawaii SB 1057). Employment lawyers see Massachusetts as next in line to pass a similar law, given its history of pay equity legislation.
The laws, like the bans on salary history inquiries in the hiring process that preceded them, are aimed at giving women and workers of color more leverage to negotiate higher pay and avoid having salary discrimination follow them from one job to the next.
But the spread of the laws is forcing businesses to think carefully about how they advertise job openings and train hiring managers. The measures are already in place in California, Colorado, Washington state, and New York City, with a statewide New York law set to take effect in September.
“The state-to-state requirements, that’s where employers are getting hung up to some degree,” said Cheryl Pinarchick, a Boston-based employment lawyer and co-chair of the pay equity practice at Fisher & Phillips LLP.
Each law has its own “little nuances and tweaks,” and many nationwide or multi-state employers are deciding it’s best to include pay transparency in all US job ads, even where it isn’t required by law, she said.
Colorado and Washington have some of the broadest requirements, which the Illinois measure would match. They require not only a salary range but also information on employee benefits and other compensation such as bonuses in job ads.
“We are talking to clients about taking a look at those most expansive states,” Pinarchick said. “If there’s a possibility they may hire someone in that state, then we use those requirements as a model.”
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Employee, Job Seeker Complaints
The increased pay transparency has meant some employers are fielding questions and complaints from current employees about their own pay, particularly if the company advertises a similar position at a higher wage, said Stacey Bastone, a New York employment lawyer with Jackson Lewis P.C.
Pay discrimination lawsuits inspired by salary ranges in job postings also could be on the horizon, but she hasn’t seen such cases emerge yet, she added.
“It’s giving employees more information, and quite frankly it’s giving plaintiffs lawyers more information,” she said.
The transparency movement also is motivating more companies to conduct pay equity analyses, which can lead to employers clarifying the reasons for pay differences among similar positions and sometimes to increasing the salary of an underpaid employee, according to Bastone.
Businesses are facing complaints on the other side of the equation as well, from job seekers when they see ads that don’t include sufficient salary or benefits information, Pinarchick said.
“The population is very educated on these issues, particularly people who are looking for jobs,” she said. “They’re looking for these types of pay disclosures, and when they don’t see them they’re complaining.”
She said she hasn’t seen any fines or penalties levied under the job posting laws yet, with the exception of a handful in Colorado where the first such law took effect in 2021. But she predicted those will come later, as the other laws have only been effective for a few months.
More to Come
More states are considering pay transparency requirements in job postings, including Massachusetts, New Jersey, and Oregon. A similar proposal is pending in the District of Columbia, where the D.C. Council has scheduled a public hearing on the bill for June 14.
Measures also were introduced this year in Alaska, Georgia, Kentucky, Montana, and South Dakota, but didn’t pass before the legislatures adjourned their 2023 regular sessions.
The Massachusetts bill (H1849) is particularly worth watching, Bastone and Pinarchick said, given that state legislature’s previous efforts on pay equity.
And states are advancing related requirements aimed at snuffing out pay disparities, such as California and Illinois laws requiring employers to report pay data by race and gender to state agencies.
Illinois employers are navigating how to comply with the data reporting law. Although the state passed it in 2021, a slow implementation and release of agency guidance has meant that many employers are filing their reports and seeking their equal pay certificates for the first time this year, Bastone said.
“We’re going to continue to see more and more states pass similar legislation about posting salary ranges for jobs,” Pinarchick said. “There’s legislation pending in at least a half a dozen other states.”
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