Pay Transparency Laws: What Small Employers Must Do

Every guide to pay transparency opens with a number. Sixteen states. Seventeen. Eighteen. Fourteen. Twenty-five.

Those are real numbers, published this year, by serious organizations, and they do not agree with each other. Which tells you something important: the number of states is not a useful fact, and chasing it is a trap.

The sources disagree because they are counting different things. Some include salary history bans, which are a related but separate obligation. Some include laws that have not taken effect yet. Some include cities. And the whole picture changes every legislative session anyway, so whatever number you memorize today will be wrong by autumn.

Here is the question that actually decides whether you have a problem, and no guide leads with it: can the person you are about to hire do this job from a state that has a law?

Because if you post a remote role, the answer is almost certainly yes. And in most states, a pay transparency law applies to a job that can be performed in that state, regardless of where your company sits. Which means a fifteen-person business in Texas, a state with no such law, that posts one remote job, may be subject to Colorado's rules. And Colorado's threshold is one employee.

This guide is about that, and about what to do. Written for a US business with five to fifty people. FirstHR is not a law firm. This is general information rather than legal advice, the law here moves constantly, and if you hire across state lines you should have an employment attorney look at your job posting template once. It is a cheap hour.

The Wrong Question

"How many states have pay transparency laws?" is the question everyone asks, and it is close to useless.

Consider that in 2026, published sources put the figure at fourteen, sixteen, seventeen, eighteen, and twenty-five. All of them are being careful. All of them are counting honestly. They just disagree about what counts.

So the count is a genuinely unstable fact, and building your compliance on it is building on sand.

What Pay Transparency Is

Being required to tell people what a job pays.

The movement started in Colorado. Its Equal Pay for Equal Work Act took effect on January 1, 2021, and it remains the broadest law in the country: it applies to any employer with at least one employee in Colorado, requires a pay range and a benefits description in every posting, and requires notifying employees of promotional opportunities.

Everything since has been variation on that theme, and the variation is the problem.

The Remote Job Trap

This is the section that matters most and that almost nobody writes, and it is why a compliance article can be relevant to a business in a state with no law at all.

Colorado made this explicit. Its 2023 amendment clarified that employers must comply with the state's transparency requirements for any role that is geographically open to Colorado residents, even where the employer has no physical presence in the state.

And it is not just Colorado. Most states with these laws apply them to positions that can be performed within the state, regardless of employer location. New York, whose guidance for employers is published by the New York Department of Labor, applies at just four employees. Which means the moment you write remote in a job posting, you have potentially opted into the laws of every state a candidate could work from.

Three Different Obligations, Constantly Confused

Part of why the numbers never agree is that three separate things get lumped together under one heading.

Being clear about which one applies to you matters, because they demand different actions. A posting state requires you to change your job advertisement. An on-request state requires you to train whoever answers the phone. A salary history ban requires you to change what your interviewers ask.

Those are three different fixes, in three different parts of your hiring process, and doing one does not do the others.

The Size Threshold, and Why You Are Probably Covered

Small employers reach for the size exemption almost reflexively, on the assumption that these laws are aimed at big companies. Look at the actual thresholds before you rely on that.

Read the top two rows again. Colorado: one employee. New York: four.

Which produces a genuinely awkward result for a small business. A six-person company is exempt in California, where the threshold is fifteen, and covered in both New York and Colorado, where it is four and one. Your headcount does not give you a clean answer. It gives you a different answer per state.

And note what this does to the remote trap. The state with the lowest threshold in the country is also the state that most explicitly reaches remote roles. Those two facts, combined, are why a small business posting a remote job is in scope almost by default.

Pay Transparency Laws State by State

States differ on three things: whether the range goes in the advertisement or only to whoever asks, how many employees you need before you are covered, and what has to sit next to the range. The table covers the states small employers ask about most, and Massachusetts gets a guide of its own here.

The Maryland row is the one to read twice. There is no size threshold at all, so a three-person company advertising a role that will be performed even partly in the state is covered, and the duty runs to internal postings as well. The state labor department publishes a disclosure form employers can use.

Minnesota sits at the other end at thirty employees, which is the one threshold in this group that most small businesses genuinely fall under. New Jersey lands in between at ten, and adds a duty to make reasonable efforts to tell current staff about promotions, per the New Jersey Department of Labor.

Connecticut and Rhode Island are the on-request states, where the range goes to an applicant when they ask or when the offer arrives, whichever comes first. Nevada goes one step further and hands the range to every applicant who has completed an interview, asked for or not. And Connecticut is moving. Public Act 26-12 adds a wage range and a general benefits description to public and internal postings, so confirm the effective date before relying on the older rule.

States with no pay transparency law

Ohio, Utah, and Kentucky have no statewide requirement, and that is the complete answer at state level. Utah and Kentucky have each seen bills introduced and not passed. Ohio is the complicated one, because four of its cities regulate what the state does not.

Cincinnati and Toledo require employers with fifteen or more employees to provide a pay scale on reasonable request once a candidate has a conditional offer, and both bar salary history questions. Columbus added a salary history ban of its own. Cleveland went further than all three: since October 27, 2025 its ordinance requires the salary range in the posting itself, again at fifteen employees.

Oregon belongs in a category of its own. There is no posting requirement, but its Equal Pay Act bars screening applicants on current or past compensation and permits a salary history check only after a conditional offer that names the pay. That applies to any employer with one employee working in the state.

None of that protects a company headquartered in one of those states, because the rule that decides your exposure is where the work can be performed. A Utah or Kentucky business posting a remote role usually lands inside Colorado's requirements, not Utah's or Kentucky's.

Pay data reporting is a separate obligation

Pay data reporting gets confused with pay transparency because the California bill that created the posting duty also expanded the state's reporting program, and the thresholds are nowhere near each other. California requires private employers with 100 or more payroll employees to file an annual pay data report with the Civil Rights Department, broken out by job category, race, ethnicity, and sex.

The practical read for a small employer: the posting rule reaches you, the reporting rule does not. Revisit it if you cross a hundred people, and keep the two ideas separate until then.

What a Good Faith Range Actually Is

Every posting state requires a good faith range. Employers reliably try to comply with this by posting a range so wide it says nothing, and regulators have noticed.

California sharpened the definition considerably. Per SB 642, effective January 1, 2026, a pay scale means a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.

The words "upon hire" are doing enormous work there. It is not what the role might pay after three years of good reviews. It is not the full band from entry to senior. It is what you would pay the person you are about to hire, now.

The uncomfortable implication, and the reason many employers resist this, is that you cannot post a good faith range for a role you have not thought about. If you do not know what the job is worth, the law is now forcing you to find out. That work starts with a written job description, which most small businesses also do not have.

What Must Actually Be in the Posting

More than the range, in several states, and this is where employers who thought they had complied discover they have not.

Two rows deserve emphasis.

Internal postings. An employer who carefully fixed their careers page and then promotes people via a quiet conversation in the kitchen has a gap. Several states extend the disclosure requirement to promotions and transfers, and Colorado requires that employees be notified of the opportunity before the selection is made.

Third-party postings. If a recruiter or a job board posts the role, the obligation is still yours. You cannot outsource compliance by outsourcing the posting, and this is a live risk for small businesses who use agencies precisely because they do not have an HR function.

Penalties, and Why They Add Up Faster Than You Think

The number that should get your attention is not the maximum fine. It is the word "per."

Per posting. Which means an employer who has been posting non-compliant job ads for a year has not committed one violation; they have committed as many violations as they published advertisements.

Colorado's enforcement is not theoretical either. As of mid-2024 the state had received over 1,600 complaints and assessed hundreds of thousands of dollars in fines under the transparency provisions. Keep the postings and the ranges you used, because records are what you would produce.

The Strictest-State Strategy

Now the practical answer, and it is the only one that survives contact with a small business.

Do not build a different job posting for each jurisdiction. That is a system that requires somebody to correctly identify the applicable law every time they post a role, forever, in a landscape that changes every legislative session. You will get it wrong, and you will get it wrong on the day you are busiest.

Instead: take the strictest applicable state as your baseline and use one template everywhere. It is the same logic that governs the rest of your HR processes: make the compliant path the only path.

Steps one and two produce a list, and the list is worth writing down rather than reconstructing every time somebody opens a role. One row per state you employ in or could hire from, with the rule that state imposes and the date you last read it, turns step seven from a research project into a ten-minute job. The second sheet is the decision itself: for each requirement, which state sets your baseline and what your template does about it. Neither sheet tracks individual postings. It is the standing answer to which laws reach us, written once and re-read annually.

Step three is the part you paste. The block below is the posting section itself, written to carry everything the strictest jurisdictions ask for, so that the same text works whether the role is on-site in your own state or open to a candidate three time zones away. Fill in the range and the benefits line once per role, use it for the internal version as well, and send it to any recruiter posting on your behalf.

Is There a Federal Pay Transparency Law?

No, and the absence explains everything else about this subject.

The NLRA point is worth pulling out because employers get it wrong constantly. Per the National Labor Relations Board, employees have a protected right to discuss their pay with each other.

Which means a policy in your handbook prohibiting employees from discussing their salaries is unlawful, in every state, regardless of whether that state has a pay transparency law. It has been unlawful for a long time. And a surprising number of small business handbooks still contain one, copied from a template somebody found online.

The pay transparency nondiscrimination provision

Federal contractors used to carry one extra obligation here. A pay transparency nondiscrimination provision, in language prescribed by the Office of Federal Contract Compliance Programs, had to sit in their contracts and their employee handbooks, barring the contractor from disciplining anyone for discussing their own pay or a colleague's.

That obligation came from Executive Order 11246, which was revoked on January 21, 2025. The Department of Labor ordered its agency to cease enforcement three days later, contractors were told to wind down compliance by April 21, 2025, and a rule rescinding the implementing regulations followed in August 2026.

So if that clause is still sitting in your handbook, it is no longer a federal contractor requirement. There is no harm in leaving it, because the National Labor Relations Act protects the same thing at every employer. It is the pay secrecy clause above, not this one, that needs deleting.

Beyond Compliance

A short section, because there is an argument here that has nothing to do with law.

Posting a range costs you the ability to underpay someone who does not know what the role is worth. That is the actual thing being lost, and it is worth being honest that some employers experience it as a loss.

What you get in exchange is that every applicant already knows the number works for them. Nobody goes through four interviews and then discovers you are twenty thousand dollars apart. Your candidate pool is smaller and enormously better qualified, in the specific sense that they have already accepted your economics, which shortens the whole recruitment process.

And there is a harder benefit. A posted range forces you to decide what the role is worth before you meet anybody, which prevents the most common source of internal pay inequity in a small business: paying whatever the individual negotiated. Two people doing the same job on different pay, because one asked harder, is exactly the pattern that these laws exist to break, and it is exactly the pattern an informal small business drifts into without ever deciding to.

Deciding the number in advance, and writing it down, is not a compliance chore. It is the foundation of a defensible pay structure, and you were going to need one eventually anyway.

So the benefits of pay transparency come down to three: fewer wasted interviews, a pay structure you can defend when someone challenges it, and a recruiting signal you get for nothing while competitors are still advertising a competitive salary.

The cost is real too, and it arrives first. The people already on your team will read the range you posted and work out where they sit inside it. Have an answer ready before the posting goes live, because that conversation is coming either way.

Common Mistakes

These recur, and the first two account for most of the exposure.

The unifying error is treating this as a research problem. It is not. Research gives you a number that is wrong, from a chart that is out of date, about states you may not be in.

It is a template problem. Build one job posting that would satisfy the strictest state in the country, use it everywhere, and the research question dissolves. That takes an afternoon and it does not need to be repeated.

Frequently Asked Questions