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NextGen Magazine


More States Are Passing Pay Transparency Laws

S.J. Steinhardt
Published Date:
Jun 7, 2024

Job listings - GettyImages-843533330

An increasing number of states, counties and cities are passing pay transparency laws, CNBC Make It reported.

The latest is Vermont, whose law goes into effect on July 1, 2025. Other states that have similar laws soon to go into effect include Maryland (Oct. 1, 2024), Illinois (Jan. 1, 2025), and Minnesota (Jan. 1, 2025), as well as the District of Columbia (June 30, 2024). Maine, Massachusetts, Michigan, New Jersey, and Pennsylvania are also considering such legislation.

With these updates, an estimated one in three workers will be affected by these laws, which require that an employer list its intended pay range for a role on any publicized job description, Lulu Seikaly, senior employment counsel at Payscale, told CNBC.

A federal pay transparency bill has also been introduced in the U.S. House of Representatives.

“The year 2022 was known as the year of pay transparency, but 2024 is giving it a run for its money, as we are seeing more action on the legislation front,” Seikaly told CNBC Make It.

Proponents of pay transparency laws say such efforts can close racial and gender wage gaps, especially when salary ranges are required in job descriptions, according to the National Women’s Law Center.

Transparent pay policies are especially gaining momentum among businesses that operate in multiple states, said Joy Rosenquist, a shareholder at Littler, a labor and employment law firm, in an interview with CNBC. A company based in New York City that has offices across the United States is likely to enact a sweeping pay transparency policy, even if they don’t have to in certain offices, she said.

It can also be a “valuable retention and recruitment tool” for businesses, she said. “The employer that discloses information more than they’re required to is someone who garners more trust from a candidate pool and from their employees.”

“Today’s employees expect visibility into the ‘why’ behind their pay. Seeing such a clear and measurable connection between proactive, transparent, and communicative pay practices and organizations that exceed revenue targets should make every executive pause,” Lexi Clarke, chief people officer at Payscale, posted on LinkedIn. “As economic and labor dynamics continue to evolve, the pursuit of revenue targets will become increasingly complex. Companies must ensure they have the tools in place to create purposeful compensation practices that engage their workforce to achieve their objectives.”