- More states join a growing list. Maryland, Minnesota and Vermont recently passed or updated laws that require pay transparency.
- Trend will affect employees in the U.S. and aboard. Employers operating in more than one U.S. state or in Europe (or both) could be affected by laws in those jurisdictions.
- Political landscape will play a big part. According to experts, if the Democratic Party takes Congress and the White House in the 2024 elections, a pending pay transparency bill in the U.S. House may become law.
The pay transparency trend continues to roll through the United States.
On June 4, Vermont became the latest state to pass a pay transparency law (effective July 1, 2025). Minnesota passed its own law May 17 (effective Jan. 1, 2025), and Maryland updated its pay transparency law on April 25, requiring employers to provide salary ranges on job postings (effective Oct. 1, 2024).
Other expected pay transparency laws will soon take effect in Washington, D.C. (June 30, 2024) and Illinois (Jan. 1, 2025).
They join eight states with active pay transparency laws: California, Colorado, Connecticut, Hawaii, Nevada, New York, Rhode Island and Washington.
According to Christine Hendrickson, vice president of strategic initiatives at pay equity software company Syndio, more states are increasingly adopting laws mandating salary range disclosures with the goal of dismantling wage inequality and to empower employees with critical information.
“This wave of change is transforming the hiring process and setting a new standard for workplace fairness,” she said, adding there’s been a surge of recent legislative activity that has swept through nearly a dozen states, with others in the wings proposing similar legislation that is reshaping pay transparency norms.
“This growing patchwork of laws signals a significant shift in how employers approach compensation, and it is something they’ll need to navigate carefully,” Hendrickson said.
Trend Accelerates in the U.S. and Abroad
According to Maxfield Marquardt, senior counsel and director of regulatory affairs at HR analytics software company Trusaic, nearly 50% of employees in the U.S. will be covered under pay transparency laws by 2026. Additionally, the Pay Transparency Directive in the European Union currently requires all employers covered by the law to disclose salary ranges on job postings and prevents them from asking about an applicant’s salary history.
Read: EU Pay Transparency Rule Promises Big Impact on Reward Policies
“If employers operating in the U.S. or Europe are not providing salary range details on their job postings by 2026, they are at risk of being at a competitive talent attraction disadvantage,” Marquardt said. “Pay transparency is especially an expectation for millennial and Gen Z job candidates, with research indicating this group will avoid applying for jobs that don’t include a salary range on the job posting.”
Marquardt said without an updated pay transparency strategy, employers not only limit their available talent pool but are at a disadvantage if they operate in more than one state.
“With most organizations deploying some version of a dispersed workforce model, employers are required to comply with salary range requirements in other states for jobs that can be performed remotely,” he said.
Compensation software company Payscale estimates current laws impact roughly 1 in 4 U.S. workers. Lulu Seikaly, Payscale’s senior corporate attorney, explained that early pay transparency laws were being passed in states with primarily Democratic-led legislatures and governors. An exception occurred in Virginia, where Democrats have a slight majority in both the House of Delegates and State Senate. Those bodies successfully passed a pay transparency bill, but Gov. Glenn Youngkin, a Republican, vetoed it.
“What’s interesting now is that Vermont had a similar scenario, yet its Republican governor, Phil Scott, signed the bill into law,” Seikaly said.
Prepare for Your Next Steps
No matter where your company conducts business, Seikaly said employers should evaluate the following items when preparing to meet any new standards regarding pay transparency laws:
- Understand the competitive landscape and determine a data strategy.
- Efficiently manage job descriptions.
- Evaluate current employee pay against the market.
- Implement standardized, scalable practices regarding salary structures/pay ranges.
- Implement a strategic compensation planning framework that supports pay transparency.
- While working with employment counsel, conduct a regular pay equity analysis before posting any ranges in job postings.
- Support pay communications internally to both employees and managers.
Hendrickson expects that with each new state joining the movement, the push for pay transparency will likely gain “unstoppable momentum,” noting many employers have already decided to adopt a nationwide approach and share pay ranges, even when not required by law.
Learn: Geographic Pay Strategies
“With each new law, this pressure increases,” Hendrickson said. “It’s clear that this is only the beginning of a broader transformation in how we think about and handle employee compensation. Every day, I’m hearing how more employers are thinking about not only sharing ranges in the U.S. but across the globe.”
Seikaly said she will pay close attention to the elections this year, explaining there currently is a federal pay transparency bill pending with the U.S. House of Representatives.
“Since the House is controlled by Republicans, many observers are not optimistic of passage,” she said. “However, if the Democrats control the House, Senate and the White House, there is a very good chance of a national pay transparency law taking effect in the future.”
Editor’s Note: Additional Content
For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:
