According to a CNBC report in late December 2022, roughly 1 in 4 employees in the U.S. will be covered by pay transparency laws in 2023. MRA’s poster partner, GovDocs, listed 13 states, counties, or cities that have enacted laws or ordinances requiring disclosure of pay rates on job postings, with New York soon to follow:
|California – effective Jan. 1, 2023||New York City, NY – effective Nov. 1, 2022|
|Colorado – effective Jan. 1, 2021||Westchester County, NY – effective Nov. 6, 2022|
|Connecticut – effective Oct. 1, 2021||Cincinnati, OH – effective March 13, 2020|
|Maryland – effective Oct. 1, 2020||Toledo, OH – effective June 25, 2020|
|Nevada – effective Oct. 1, 2021||Rhode Island – effective Jan. 1, 2023|
|Jersey City, NJ – effective April 13, 2022||Washington – effective Jan. 1, 2023|
|Ithaca, NY – effective Sept. 1, 2022|
If you do not have operations in these jurisdictions, you may think you don’t have to be concerned. However, if you advertise your openings on a national job board, across state lines, or consider remote workers, you may want to reconsider as you could find yourself unwittingly violating one of these laws.
Of course, each jurisdiction has written into its law unique compliance requirements. For example, Colorado, one of the first states to pass a pay transparency law, requires employers to disclose salary or pay ranges for open positions on all job postings. The state’s Department of Labor has ruled that employers cannot circumvent the requirement by stating that Colorado residents are not eligible for an advertised role.
California’s law requires that the pay scale for a position must be included in any job posting if the position may ever be filled in California, either by a remote or an in-person employee. Additionally, the pay scale must be included in the actual posting.
Many employers, faced with continuing recruiting challenges, have expanded their recruiting efforts to include remote candidates. These pay transparency laws create unique challenges for employers, and noncompliance can be expensive, with penalties ranging from $300 to $250,000 per violation.
We are likely to see more states and jurisdictions enact similar laws soon. Chicago introduced a proposal more than a year ago to require salary ranges for job postings, but it hasn’t advanced in the City Council. Reportedly, Aldermen have until May to take action. With a rapidly changing landscape, it is a good time to develop your approach to addressing these requirements depending on your hiring strategy.
Currently, two approaches are common. The first finds employers restricting remote work in states or localities that do not have pay transparency requirements. This is sometimes a practical approach for larger companies or those recruiting workers with specialized skills that require recruiting from a broader geographic area. The second, which may better prepare organizations for the future, is to include the salary or wage range in all job postings rather than to post separate ads based on location.
One thing will always be a constant in human resources–change! These laws and the anticipated changes to the Fair Labor Standards Act and the independent contractor rule are no exception and will keep us on our toes.
Happy (almost) spring!