The salary transparency movement is well underway: In 2021, Colorado paved the way for new laws requiring businesses to list salary ranges on job ads, and New York City rolled out its own pay range law in November 2022. A handful of other states and cities say employers must share the salary range for a job during the hiring process.
Looking ahead, three additional states will adopt their own disclosure laws in the new year, and bills are in the works with various state and city legislatures across the country.
Here’s what to know about new changes coming in 2023:
New salary transparency laws going into effect Jan. 1, 2023
California: According to California’s amended labor code, employers with 15 or more workers will be required to list salary ranges on job postings on a company’s hiring page or third-party website like Glassdoor, LinkedIn or other job board. Business must also provide the pay scale to an employee for the job they currently hold, upon request.
The move makes California the largest state where job listings will require salary information by law. It’s home to 19 million workers, and nearly 200,000 employers will have to comply, including some of the most influential companies in the world like Apple, Disney, Google and Meta.
Washington: Washington’s Equal Pay and Opportunities Act states that employers with 15 or more employees must share the pay range for a job on any digital or printed ad on the company’s hiring board or listed on a third-party site. The law applies to companies that have at least one Washington-based employee, engage in business in the state or are recruiting for jobs that could be filled remotely by someone in the state.
Job listings will also be required to include a rundown of company benefits the new hire will get, including but not limited to: “health care benefits, retirement benefits, any benefits permitting days off (including more generous paid sick leave accruals, parental leave, and paid time off or vacation benefits), and any other benefits that must be reported for federal tax purposes, such as fringe benefits.”
Rhode Island: Rhode Island’s amended Pay Equity Act doesn’t require employers post pay ranges on job ads, but it does say businesses must provide the range to job applicants upon request.
Employers will be required to disclose the minimum and maximum range on offer before discussing compensation with the candidate, when they officially make the hire, and if the employee moves into a new position. Plus, they’ll have to provide a salary range for a current employee’s position at their request.
Other pay range laws that could come in 2023 and beyond
In New York state, Gov. Kathy Hochul approved a salary transparency bill in late December that’s expected to go into effect in September of 2023. Like the one in New York City, the statewide legislation requires employers with four or more workers to list salary ranges for all advertised jobs and promotions.
Other pay transparency legislation is pending in Massachusetts and South Carolina.
Experts say it’s only a matter of time before listing salary ranges on job ads becomes the norm.
For example, businesses across the U.S. rushed to Payscale to strategize their range rollouts as soon as laws passed in California and Washington, says Lulu Seikaly, a senior corporate attorney focusing on employment law at Payscale. Even if they’re not headquartered in states with salary range laws, they could be bound by them if they plan to hire remote workers, or they may want to compete with big-name companies in Silicon Valley and on the coasts.
“Progressive companies are seeing the writing on wall,” Seikaly says. “They understand that if they post a competitive range, it’s a great branding opportunity for them.”
Altogether, by 2023, roughly 1 in 4 workers will be covered by a state or local law that requires businesses to be transparent about their pay ranges, according to calculations from analysts at Payscale.
Economists say mandating upfront disclosures from the employer’s side could help close wage gaps across gender, racial and LGBTQ identities.
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