Salary Transparency Laws to Continue to Expand in 2023

Posted: December 19, 2022

One of the of the biggest employment trends of 2022 is salary transparency legislation and like it or not, it is here to stay in 2023 and beyond. Salary transparency laws continue to pop up in various states and localities across the United States and while they vary in scope and details, the laws dictate requirements for employers to disclose compensation ranges in their job postings or at the request of job candidates. While salary transparency laws have generally had a positive impact on recruiting and hiring, there have been some negative effects, including upsetting existing employees who find out their coworkers’ compensation ranges.

Here is a rundown of the current salary transparency laws on the state level across the country:

Colorado

The state of Colorado is a pioneer in the salary transparency movement, enacting a law that went into effect on January 1, 2021. The new law required Colorado employers to “include compensation in job postings, notify employees of promotional opportunities, and keep job description and wage rate records.” The groundbreaking legislation also applies to remote workers based in Colorado.

New York City

On November 1, 2022, New York City joined Colorado in mandating employers to include salary ranges in their job advertisements. The NYC Human Rights Law requires employers to “include a good faith pay range in all job advertisements” in advertisements for “a job, promotion, or transfer opportunity that would be performed in New York City.”

Looking Ahead to 2023

As we look ahead to salary transparency in 2023, similar legislation is coming to several other states, including California, Washington, and Rhode Island. Here is a rundown of new laws that will take effect on January 1, 2023:

California

California passed a salary transparency law in September 2022 that will take effect on January 1, 2023. The new law, requiring employers to “include the pay scale for a position in any job posting,” applies to employers with 15 or more employees. However, the legislation does not require employers to disclose bonus, incentive compensation or benefit information.

Washington

The state of Washington enacted an amendment to its Equal Pay and Opportunity Act that will go into effect January 1, 2023. The new legislation will require employers to “to “disclose in each posting for each job opening the wage scale or salary range” in job listings.

Rhode Island

Rhode Island amended its existing Pay Equity Act with new pay transparency requirements. The new law, which goes into effect on January 1, 2023, requires employers to “provide the wage range for the position the applicant is applying.”

Maryland, Connecticut and Nevada have also enacted salary transparency laws in recent years, which require employers to disclose wage or salary ranges to job applicants.

What’s Next?

The salary transparency law trend is likely to continue expanding as new legislation is pending in several states, including New York State, Massachusetts, and South Carolina. As other states return to legislative sessions in 2023, it is expected that even more of them will enact new legislation.

What does this mean for employers? It is crucial that you take note of all these ongoing changes to salary transparency laws and take the necessary steps to ensure that your postings are in compliance with new and existing laws. In a future article, we will outline best practices for managing and complying with salary transparency laws.

If you have questions regarding the ever-changing world of salary transparency laws, please contact our Client Service Ninjas at (877) 360-4636.

Please consult with qualified legal counsel when developing hiring and background screening procedures.

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