With five U.S. states set to enact pay transparency laws by the end of 2025, HR leaders must adapt to a shifting regulatory landscape.
By Maggie Mancini
Pay transparency—the practice of openly sharing pay information with job candidates and employees—has grown in popularity across the United States in recent years. An estimated one in three U.S. workers will be impacted by a pay transparency law by the end of 2025. As the tides turn, HR and business leaders will be tasked with adapting their pay policies and procedures to stay compliant and maintain a competitive edge in a tight job market.
“All of these laws aim to increase pay equity by requiring disclosure of salary ranges,” says Ann Knuckles-Mahoney, an employment attorney at Epstein Becker Green. “While these pay transparency laws have the same ultimate goals, employers should keep in mind that key differences exist between these states’ pay transparency laws that should not be overlooked.”
Below is a list of each of the states enacting pay transparency laws in 2025.
- Illinois: As of Jan. 1, companies with 15 or more employees are required to include pay scales and benefits in job postings. Within 14 days of making an external job posting with pay ranges included, companies must also inform existing employees about the job opportunity.
- Minnesota: As of Jan. 1, organizations with 30 or more employees at one or more job sites in Minnesota must include pay information—including a general description of all benefits—in job postings. Employers must provide either a starting pay range or a fixed pay rate for each position.
- New Jersey: Beginning June 1, companies with 10 or more employees over 20 calendar weeks that do business or have employees in New Jersey, must disclose salary ranges or fixed wage offerings in all job postings or promotion opportunities for internal and external candidates. A description of benefits must also be included. Companies must make some effort to inform employees of opportunities before making promotion decisions.
- Vermont: Beginning July 1, organizations that do business in Vermont with five or more employees must include a salary or salary range in all job postings that take place in Vermont. This includes opportunities open to internal and external candidates for roles that are physically located in Vermont or report to an office located in Vermont. There is no requirement for employers to disclose benefits.
- Massachusetts: Beginning Oct. 29, companies with 25 or more employees are required to disclose pay ranges in job postings for external candidates as well as ranges for existing employees offered promotion opportunities. Upon request, employers must provide pay ranges to an existing employee and a candidate applying for that position. Organizations with 100 or more employees are required to submit wage data reports annually, and the first reports were due on Feb. 1.
Other states that have pay transparency laws in effect include California, Colorado, Connecticut, Hawaii, Maryland, Nevada, New York, Rhode Island, and Washington.
Some of the state laws—including in Minnesota, New Jersey, and Illinois—require employers to provide information about benefits and other compensation in the disclosure, Mahoney says. Other states—like Massachusetts and Vermont—do not address benefits or other compensation at all.
The Massachusetts law includes a data reporting piece for certain larger employers, specifically those with 100 or more employees, because they are subject to the federal equal employment opportunity (EEO) reporting requirements, Mahoney says.
While California and Illinois also require pay reporting, she says, Massachusetts does not require employers to create new reports. Instead, covered employers are required to provide a copy of their most recent EEO reports to the state by Feb. 1 of each year.
“As highlighted by some of these differences, employers should carefully review the requirements of the law for each applicable jurisdiction when determining how to comply with the laws,” Mahoney says.
These laws may initially result in employee morale issues—particularly for existing employees who may be surprised by published pay ranges—but they can also help boost morale in the long term by promoting honesty.
Impacts on Remote Workers? Unclear
“The impact of these laws on remote employees requires legal analysis and depends on the specifics of each state law, as well as any clarifying amendments, regulations, or guidance,” Mahoney says. “Some of the pay transparency laws address these issues directly within the law, while others are silent on the issue.”
The Illinois law, for example, applies to positions that will be physically performed at least in part in Illinois or be performed by an employee who will report to a supervisor, office, or other work site in Illinois, Mahoney says. The state further clarifies that an out-of-state employer’s posting for remote work that could be performed in Illinois is only required to include a salary range if the employer knows or expects one of these circumstances to apply, she explains.
“An employee will not become subject to the salary range disclosure requirements if the position only involves occasional, intermittent, or sporadic visits or contact with Illinois for work, provided the position is not supervised in Illinois,” Mahoney says.
In Vermont, salary range disclosure applies to job openings that are physically located in Vermont, as well as those performed remotely if the organization has offices or workplaces in Vermont, she says.
The laws passed in Massachusetts, Minnesota, and New Jersey do not address remote workers, and no clarifying guidance has been issued to address the impacts that pay transparency regulations might have on companies hiring remote workers.
Examining the “Why”
“Pay transparency laws, along with other types of pay equity laws, such as salary history laws and pay data reporting laws, all aim to promote pay equity by shedding light on compensation practices and leveling the playing field,” Mahoney says. “These laws aim to address the wage gaps based on gender and race that have developed over time due to systemic inequities. By requiring disclosure and transparency around wages and giving employees information that can assist them in making well-informed decisions, these laws help to reduce wage gaps.”
She explains that pay transparency laws help foster a sense of fairness in the workplace. These laws may initially result in employee morale issues—particularly for existing employees who may be surprised by published pay ranges—but they can also help boost morale in the long term by promoting honesty.
For candidates, these laws allow applicants to narrow their job search and focus on positions that align with their salary expectations. Pay transparency laws can also provide candidates with bargaining power when it comes to negotiating salary offers, Mahoney says.
Maintaining Compliance
“Now more than ever, employers have to stay on top of employment law developments at the state and local levels, in addition to those at the federal level,” Mahoney says. “Employers will need to monitor for new pay transparency laws as well as for additional regulations or guidance on existing laws.”
Employers should develop a strategy for how to comply with these state and local laws. This strategy may depend on where a company has offices, whether they offer remote work, and whether they want to comply when necessary or disclose pay ranges on a broader scale, she says.
When it comes to assessing pay policies to avoid legal risk, Mahoney says that HR leaders can consider taking the following first steps.
- Review existing compensation policies, structure, and pay bands. “To the extent an employer does not already use pay bands, the employer should consider creating them as a guide when setting pay,” Mahoney says.
- Conduct a pay equity audit. This, Mahoney says, allows employers to understand their existing pay practices, identify potential disparities, and take action where needed. “For those employers who do not already have well-defined salary structures, a pay equity audit can assist them in formulating the pay ranges that will be disclosed and ensuring that published ranges are reasonable and aligned with their current compensation structure,” she says.
- Make pay equity a routine part of operations. “As opposed to a one-and-done approach, ongoing reviews can help with proactively addressing disparities, identifying whether there are repeatable actions leading to disparities, and reducing the overall risk of equal pay claims,” Mahoney says.
