Pay Transparency Laws: What Small Employers Must Do
Pay transparency laws by state, explained for small employers. The number of states is not the question. Whether your remote job posting is covered is.
Pay Transparency Laws
Every guide gives you a number of states, and every guide gives a different number. That is the wrong question. Here is the right one
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.
| What gets counted differently | Why it changes the number |
|---|---|
| Salary history bans | Over twenty states have one. It is a different obligation. Including them inflates the count substantially |
| Laws not yet in effect | Delaware is enacted but does not take effect until 2027. Do you count it? |
| Local ordinances | New York City, Jersey City, and four Ohio cities have their own rules. Ohio has no state law at all |
| Disclosure-on-request states | Connecticut, Nevada, and Rhode Island have laws, but weaker ones. Some counts include them, some do not |
| Public sector only | Some states regulate only government employers, which is irrelevant to you |
So the count is a genuinely unstable fact, and building your compliance on it is building on sand. If you employ anyone in California, the specifics are in the California compliance guide.
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. It is one more strand of the employment law web that attaches at different sizes in different states.
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 interview script in particular is the one people forget, and it is covered in the guide to illegal interview questions.
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.
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.
| Element | Required where | Note |
|---|---|---|
| Salary or wage range | Every posting state | A genuine band. Top and bottom. Not open-ended |
| General description of benefits | Colorado, Washington, Illinois, and others | Health, retirement, and the major items. Not an itemized list |
| Other compensation | Colorado and others | Bonuses and commissions, where they are a meaningful part of the package |
| Application deadline | Colorado | An anticipated closing date for applications |
| Internal postings too | Colorado, Illinois, Massachusetts, New York, and others | Promotions and transfers, not just external hiring |
| Promotion notification | Colorado, Illinois | Illinois requires notifying employees within 14 days of an external posting |
| Third-party postings | Most states | If a recruiter or job board posts on your behalf, it is still your obligation |
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, a pattern that recurs throughout small business HR.
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.
| Jurisdiction | Penalty | The mechanics |
|---|---|---|
| Colorado | $500 to $10,000 | Per violation. Each non-compliant posting is a separate violation. So is each missed promotion notice |
| California | $100 to $10,000 | Per violation. A first violation may be waived if you correct all postings |
| Illinois | $500 to $10,000 | Per violation, escalating with repetition |
| Washington | $500 to $1,000 | Per violation, with a cure period available |
| Massachusetts | Warning, then escalating | A grace period for early violations, then penalties into the tens of thousands |
| New York City | Up to $250,000 | For repeated violations. The first can be cured within 30 days without a fine |
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, and the guide to record retention sets out how long.
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.
Is There a Federal Pay Transparency Law?
No, and the absence explains everything else about this subject.
| What exists federally | What it does | What it does not do |
|---|---|---|
| Equal Pay Act of 1963 | Prohibits sex-based wage discrimination for substantially equal work | Does not require you to publish a pay range |
| National Labor Relations Act | Protects employees' right to discuss their wages with each other | Does not require you to disclose anything proactively |
| Salary Transparency Act | Would require disclosure of ranges in postings | Introduced in Congress. Not enacted |
| Pay Equity for All Act | Would ban salary history inquiries nationally | Introduced. Not enacted |
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. It belongs on the list of policies to review this year.
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.
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. The rest of the recurring small-employer errors are collected in the HR rules and regulations guide.
Frequently Asked Questions
What are pay transparency laws?
Pay transparency laws are state and local rules requiring employers to disclose compensation information to job applicants and employees. The strictest form requires the salary or wage range to appear in the job posting itself, before anyone applies. Weaker forms require disclosure only on request or before an offer. Many jurisdictions also ban asking candidates about their salary history, which is a related but separate obligation. There is no federal pay transparency law, so the rules are set entirely at state and local level.
Which states have pay transparency laws?
Roughly eighteen states plus the District of Columbia, though counts published by different sources range from fourteen to twenty-five depending on whether they include salary history bans, local ordinances, and laws not yet in effect. States requiring the range in the posting itself include California, Colorado, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Jersey, New York, Vermont, and Washington, with Virginia and Maine joining in 2026 and Delaware in 2027. Connecticut, Nevada, and Rhode Island require disclosure on request rather than in the advertisement.
Do pay transparency laws apply to remote jobs?
Yes, and this is the point most small employers miss entirely. In most states the law applies to a position that can be performed within the state, regardless of where the employer is located. Colorado clarified this explicitly: its requirements apply to any role geographically open to Colorado residents, even if the employer has no physical presence there. So a Texas company posting a remote job that a Colorado resident could do is subject to Colorado's law, and Colorado's threshold is one employee.
Is there a federal pay transparency law?
No. A Salary Transparency Act and a Pay Equity for All Act were introduced in Congress but have not been enacted. The Equal Pay Act of 1963 prohibits sex-based wage discrimination, and the National Labor Relations Act protects employees' right to discuss their wages with each other, but neither requires an employer to publish pay ranges. Everything in this area is state and local law, which is precisely why it is so fragmented and why multi-state and remote employers face the greatest complexity.
What size does my company have to be for pay transparency laws to apply?
It depends entirely on the state, and this is where small employers get caught. Colorado applies to any employer with at least one employee in the state, so there is no small-business exemption at all. New York applies at four employees. Maine at ten. California, Illinois, and Washington at fifteen. Massachusetts at twenty-five. Hawaii at fifty. Which means a six-person company is exempt in California and covered in both New York and Colorado. There is no headcount at which you can stop paying attention.
What is a good faith salary range?
A range that genuinely reflects what you expect to pay for the position, rather than a band so wide it communicates nothing. Posting $40,000 to $400,000 for a role you actually intend to pay $95,000 for may satisfy the letter of a statute while defeating its purpose, and regulators have noticed. California's 2026 amendment defines a pay scale as a good faith estimate of what the employer reasonably expects to pay for the position upon hire, which rules out ranges spanning every seniority level the role might eventually reach.
What has to be in a compliant job posting?
At minimum, the salary or wage range, expressed as a genuine band with a top and a bottom. Several states require more: Colorado requires a general description of benefits and other compensation plus an application deadline. Washington and Illinois also require a benefits description. Some states extend the requirement to internal postings for promotions and transfers, and Illinois requires notifying employees of promotional opportunities within fourteen days of an external posting. Check the specific state, because the extras vary.
What are the penalties for violating pay transparency laws?
They vary widely and they add up per posting rather than per company. Colorado runs from $500 to $10,000 per violation, and each non-compliant posting counts separately. California's civil penalty is $100 to $10,000 per violation, with first violations potentially waived if all postings are corrected. New York City reaches up to $250,000 for repeated offences. Beyond the fines, a public enforcement action is a recruiting problem, because candidates evaluating your offer can read about it.
Can I still ask a candidate what they currently earn?
In over twenty states, no. Salary history bans prohibit asking a candidate about their current or previous compensation and prohibit using it to set their starting pay. The rationale is that anchoring a new salary to an old one perpetuates any inequity already present. You may generally still ask what the candidate is looking for, which gets you the information you actually need. Check your state, and check the states your remote candidates might be in.
Do these laws apply to internal promotions?
In several states, yes, and this catches employers who fixed their external postings and forgot the rest. Colorado requires notifying all employees of promotional opportunities and posting the range. Illinois requires informing employees of promotional opportunities within fourteen days of an external posting. Massachusetts and New York extend disclosure requirements to promotions and transfers. If you have carefully made your careers page compliant and are still promoting people via a quiet conversation, you may have a gap.
What is the simplest way for a small business to comply?
Adopt the strictest applicable state as your baseline and use one job posting template everywhere. Trying to maintain a different template for each jurisdiction is a system you will get wrong, because it depends on somebody correctly identifying the applicable law every time they post a role, forever. A single template that includes a genuine range, a benefits description, and an application deadline satisfies almost every jurisdiction at once, and it removes the decision from the process entirely.
Do I have to tell existing employees their pay range?
In several states, yes, on request. California requires providing pay scale information to current employees for their own position upon request. Colorado requires including the range in internal postings. Minnesota requires employers with a handbook to include notice of employees' wage disclosure rights in it. And separately, under the National Labor Relations Act, employees have a protected right to discuss their wages with each other, which means a policy prohibiting pay discussions is unlawful regardless of what your state requires.