A Growing Trend: Transparency in the Workplace

On June 4, 2024, Vermont Governor Phil Scott signed a law mandating employers with five or more employees to post the minimum and maximum hourly/ salary range for job roles, including providing information on whether the role is partially paid by tips or commissions. This legislation will become effective on July 1, 2025.

Pay compensation as a taboo topic is now a thing of the past, as a growing number of states and cities have adopted laws requiring transparency within the work-place. Generally, these pay transparency laws hold employers accountable by requiring either publicly or privately providing the salary ranges and benefits offered for job positions to both employees and potential employees.

Although no comprehensive pay transparency law at the federal level currently exists, the introduction of such legislation has been indicative that it may soon come. In March 2023, the federal “Salary Transparency Act” was proposed in the U.S. House of Representatives, which would require all public and private employers nationwide, regardless of size, to include the wage range in all job postings, provide wage ranges to applicants, and provide wage ranges to existing employees for their positions.

While these laws aim to promote fairness and equity within the workplace, in the absence of any federal law, transparency is less than clear for the employers. In the absence of federal guidance, states are given much discretion in what exactly they can require to be disclosed and when that information must be disclosed. Consequently, this has resulted in a lack of uniformity across the country, posing especially difficult for employers who employ people throughout multiple states. In an attempt to remain in compliance with the differing laws, some employers have found the resulting solution to be providing a wide-margin salary range.

California and Colorado were among the first states in the United States to adopt a state-level pay transparency law, which included requiring pay reporting as part of the implemented transparency measures. This past year we have seen a growing number of states follow in adopting similar transparency laws. Most recently, Maryland, Connecticut, Nevada, Rhode Island, New York, and Washington states are among the latest jurisdictions to enact some form of pay transparency requirement, with many states to soon follow. This will likely continue to become a growing trend across the country.