Pay transparency laws gather momentum in 2023 — a boon for workers

On January 1, new pay transparency laws requiring employers to post salary ranges on all advertised job postings went into effect in California and Washington State, with a similar one following later in the year in New York State.

Comparable pay disclosure laws are already in place in Colorado and New York City. Other states such as Maryland and Rhode Island require salary information to be provided when an applicant requests it.

Publicly revealing how much positions pay is slowly becoming a reality in the workplace despite a reluctance by employers to do so. For job seekers and those looking for promotions at their current employer, pay transparency can be a game changer.

“The momentum going into 2023 is encouraging that real change is ahead – not only in areas where laws are taking effect, but increasingly at the national level as well,” Maggie Hulce, executive vice president and general manager of enterprise at Indeed, told Yahoo Finance. “More employers are also starting to see it as a competitive edge to attract talent in a tight labor market. And pay transparency can also help close pay gaps that still exist across gender, race, and ethnicity.”

Why the new state laws are eye-catching

The California and Washington laws apply to firms with 15 or more workers posting job listings on a company’s careers page or third-party job boards like Indeed or LinkedIn. Businesses must also provide the pay scale to an employee for the job they currently hold, upon request.

In Washington, the pay scale must be included in the job posting if the position may be filled either in-person or remotely, according to the Labor Commissioner. Plus, a general description of all of the benefits and other compensation to be offered to the hired applicant.

Starting September 17, 2023, New York State will begin requiring employers to list salary ranges for all advertised jobs and promotions. New York Governor Kathy Hochul last month signed the legislation establishing the statewide pay transparency law, which applies to employers located in New York State with four or more employees.