Pay Transparency Laws in 2025: What HR Managers Need to Know
By
Samantha Cox
•
May 1, 2025
Pay transparency is a movement toward trust, fairness, and equity in the workplace. It empowers employees, holds organizations accountable, and helps close long-standing pay gaps. But what does that mean for HR leaders and hiring managers? It means understanding the laws that shape pay transparency, how they impact your hiring practices, and what steps you can take to stay compliant without compromising your competitive edge. In this article, we’ll break down the key regulations, why they matter, and how your team can create a culture where fairness isn’t just promised, it’s practiced.
Key Takeaways
Pay transparency laws require employers to disclose salary ranges and compensation details in job postings, aiming to reduce wage disparities and promote fairness.
Implementing transparent pay practices enhances employee trust, morale, and retention while helping organizations remain competitive in the job market.
AI technology, such as Fonzi, streamlines recruitment processes and ensures compliance with pay transparency laws, fostering a culture of openness and reducing administrative burdens.
Understanding Pay Transparency
Pay transparency involves openly sharing salary information, including salary ranges, bonuses, and pay structures. This practice aims to reduce wage discrimination and inequities within organizations, fostering a fairer and more equitable workplace environment. Embrace pay transparency by implementing pay transparency policies, which enhance employee trust and improve a fair workplace environment.
Job postings may need to include additional information about bonuses, other compensation, and benefits alongside salary ranges for a new position. Many states now require a job listing to include the actual expected compensation, such as an hourly wage range or salary range, based on the employer's good-faith estimate. For instance, a job posting may allow Fonzi’s AI interviewer to confirm pay expectations and ensure the actual expected compensation is communicated clearly in the job listing to ensure alignment between the job applicant and the company.
With more states mandating salary range disclosures, understanding and adopting these transparency laws is crucial for compliance and fair pay practices.
Why Pay Transparency Matters
Clearly communicating compensation frameworks builds trust, loyalty, and long-term engagement. When employees understand how their pay is determined, they’re more likely to feel valued and fairly treated, boosting morale, satisfaction, and retention. Extending this transparency to AI-driven processes further reinforces confidence among both candidates and employees, ensuring that compensation decisions are seen as fair, consistent, and unbiased.
Transparent pay practices can differentiate organizations in a competitive job market. While maintaining employee morale can be challenging, especially when transparency laws lead to negative comparisons among coworkers, the overall benefits of fostering a fair and equitable workplace make it a worthwhile endeavor. Additionally, implementing effective pay policies can enhance these transparent pay practices.
Key Components of Pay Transparency Laws
Many states have introduced laws that mandate employers to disclose pay information, particularly in job postings. Many of these laws require salary information to be included in both external job postings and job listings for internal job transfers, internal transfers, or internal promotions. Employers may be required to provide salary ranges during the hiring process and for promotions, ensuring transparency in compensation. For example, Maryland mandates that employers disclose wage or salary ranges in all job listings, including those for internal transfer opportunities, before discussing compensation.
Penalties for non-compliance can include civil fines, and the specific consequences vary by state. Several states are expanding their pay transparency requirements in 2025, including the District of Columbia, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, and Vermont. Other states, such as Colorado, California, New York, Washington, Hawaii, Maryland, and Nevada, already have ongoing mandates that require employers to disclose pay ranges in job postings.
States with Pay Transparency Requirements
Several states across the U.S. have implemented pay transparency laws to promote fair wage practices. As of 2025, new pay transparency laws took effect in Illinois, Minnesota, New Jersey, Vermont, and Massachusetts. States with existing mandates for pay range disclosures include Colorado, California, New York, Washington, Hawaii, Maryland, and Nevada. Some state laws apply to employers with at least one employee, while others set the threshold at four or more employees.
Understanding the states leading the way in pay transparency helps HR teams stay compliant and build a culture of openness. Many of these laws apply to private employers, not just public sector organizations.
California
California has implemented a pay transparency law that requires employers to disclose salary ranges and annual salary ranges in job postings. This requirement applies to employers with 15 or more employees, ensuring that job seekers have clear information about potential earnings. Employers who fail to comply with the salary disclosure mandate may face penalties.
Mandating salary range disclosures, California promotes fair pay practices, helping job seekers make informed decisions and fostering salary transparency.
Colorado
Colorado law requires employers to disclose pay ranges in job openings and for promotions. Under Colorado's Equal Pay for Equal Work Act, employers are required to include pay scales, benefits, and job details in postings to ensure compliance and promote pay transparency. Employers must provide salary ranges that are consistent with the pay scale of the position in question, promoting transparency in hiring practices. Non-compliance with Colorado’s pay transparency laws can result in fines up to $10,000.
By following these regulations, Colorado employers foster a transparent and fair workplace, ensuring employees understand potential earnings and advancement opportunities, such as Colorado’s equal pay.
Connecticut
Connecticut’s law requires employers to disclose the wage scale when requested by employees. Employees have the right to formally request wage ranges from their employers, promoting transparency in compensation. Penalties for employers in Connecticut who fail to comply with wage disclosure requirements include fines.
This legislation empowers prospective employees to seek information about compensation for their new position, fostering a culture of openness and trust within organizations.
Maryland
Under Maryland’s former pay transparency law, employers were required to disclose salary ranges upon an applicant’s request. Non-compliance could result in specific fines, reinforcing the state’s push for transparency in hiring.
Today, Maryland’s pay transparency law includes the following key points:
Employers must disclose wage ranges upon request from applicants.
This law ensures transparency in the hiring process.
There are penalties for non-compliance, which include specific fines for employers who fail to respond appropriately to requests.
This approach helps job applicants understand their potential earnings and promotes fairness in the hiring process by providing a good-faith estimate according to job responsibilities.
Nevada
In Nevada, employers are obligated to provide wage information for new positions and promotions. Employers must disclose wage information specifically for new roles and promotions, ensuring that employees are aware of their potential earnings. Nevada imposes penalties on employers for non-compliance with wage disclosure requirements.
This requirement promotes transparency and fairness in compensation program practices, helping to reduce wage disparities and support the Equal Pay Act and pay equity.
New York
New York’s pay transparency law, which became effective in 2023, requires employers to include salary disclosures in job advertisements. The law mandates that job advertisements must include both minimum and maximum salary ranges for the position, as well as the maximum annual salary. Fines are imposed for failure to comply with the salary disclosure requirements outlined in New York’s law.
Providing job seekers with upfront salary information, New York promotes transparency and fair pay practices, including a fixed pay rate and competitive pay.
City-Level Pay Transparency Laws
City-level pay transparency laws are rapidly gaining traction, with major cities enacting their own regulations to ensure fair pay practices and promote pay equity. For example, New York City, Jersey City, and Cincinnati have implemented transparency laws that require employers to disclose salary ranges in job postings. These local laws often apply to employers with five or more employees and may include specific requirements, such as listing the minimum and maximum salary or hourly wage for each position.
In New York City, employers must include the minimum and maximum salary range for a role in every job posting, ensuring job candidates have clear expectations about compensation. Jersey City goes a step further by requiring employers to disclose salary ranges and provide a description of benefits in all job ads. Failure to comply with these transparency laws can result in civil penalties, making it essential for employers to stay up-to-date with local requirements.
By adhering to city-level pay transparency laws, employers not only avoid costly penalties but also demonstrate a commitment to fair pay and equal opportunity. These measures help attract top talent, foster trust, and support a culture of pay equity across organizations.
Salary History and Pay Transparency
Salary history bans are increasingly being implemented alongside pay transparency laws to further promote equal pay and reduce pay disparities. These bans prohibit employers from asking job applicants about their salary history during the hiring process, whether in job postings, interviews, or application forms. States and cities such as California, New York, and Massachusetts have adopted these measures to ensure that compensation decisions are based on the value of the role and the employer’s pay scale, rather than an applicant’s previous earnings.
Employers must focus on disclosing salary ranges and other compensation details, such as bonuses and benefits, to job applicants instead of relying on salary history. This approach helps close pay gaps, supports fair pay practices, and aligns with transparency laws designed to create a level playing field for all candidates. By eliminating questions about salary history and providing clear information about pay, organizations can foster trust, promote equal pay, and reduce the risk of perpetuating historical pay disparities.
How Fonzi AI Enhances Pay Transparency
Fonzi automates key recruiting tasks to promote greater pay transparency and fairness. Through intelligent automation, it streamlines hiring workflows and provides clear, consistent salary communication at every stage of recruitment. This approach helps HR leaders stay aligned with evolving pay transparency laws while building trust and equity across their teams.
Fonzi can also help organizations manage compliance with employee reports, including salary and benefits disclosures required by some state laws, such as those in Illinois, especially for remote employees.
Fonzi helps streamline the hiring process, ensuring that salary expectations are consistently communicated to candidates. This automation fosters trust and engagement among candidates and current employees, promoting a culture of transparency and fairness.
Automating Interviews with AI
AI-driven interviews allow for uniform communication of salary expectations during the hiring process. Fonzi ensures uniformity in interviews, providing all candidates with equal opportunities through consistent communication of salary ranges. The AI-driven interview system utilized by Fonzi ensures that salary ranges are consistently communicated across all candidates.
By using AI, companies create a more equitable hiring process, building trust with candidates and enhancing the overall experience.
Integrating Resume Scoring Tools
Fonzi incorporates resume scoring tools to ensure evaluations of candidates are impartial and equitable. Fonzi's integration with resume scoring tools promotes impartial assessment of candidates. This ensures a fair candidate evaluation process, enhancing trust and compliance in hiring practices.
Using Fonzi's resume scoring tools, employers ensure a fair candidate evaluation process, enhancing trust and compliance in hiring practices.
Enhancing Hiring Efficiency
Using Fonzi can streamline hiring operations while still prioritizing a positive candidate experience. Fonzi significantly reduces delays in the hiring process, enhancing overall efficiency while maintaining a positive candidate experience. Utilizing Fonzi, companies significantly reduce hiring process time while maintaining a positive candidate experience.
This automation supports HR managers in aligning with pay transparency laws and promoting fair pay practices.
Benefits of Using AI for Pay Transparency
Incorporating AI helps streamline the hiring process, allowing for better alignment with pay transparency laws. AI automation can significantly reduce the administrative burden on hiring managers, ensuring consistent compliance with pay transparency. Comprehensive pay transparency also includes disclosing retirement benefits as part of the total compensation package. Employers may face high costs when implementing pay transparency if they do not use AI, as managers may struggle to adapt to new practices without support.
When candidates see that hiring practices are aligned with transparency principles, it fosters trust and encourages applications from a broader talent pool.
Implementing Transparent Pay Practices
Managers should be educated on compensation philosophy to discuss pay transparency effectively with employees. Engaging leadership and stakeholders is crucial for successful pay transparency initiatives.
Fonzi automates recruiting tasks, making the hiring process quicker and more transparent. Incorporating AI in salary determination can help organizations standardize decisions and eliminate biases in pay practices. AI can analyze objective metrics like job role and tenure, which helps in making equitable salary decisions across teams. Clear communication of pay information to each job candidate is a key part of implementing transparent pay practices.
A comprehensive pay transparency roadmap should be developed based on an organization’s unique situation and goals, as well as different job responsibilities.
Staying Compliant with Pay Transparency Laws
To stay compliant with evolving pay transparency laws, employers must regularly review and update their job postings, workplace forms, and compensation policies. This includes ensuring that salary ranges are clearly disclosed in all job postings and that wage scales are available to current employees and job applicants upon request. Employers must also provide a general description of the job and its responsibilities, helping candidates and employees understand how pay is determined.
Training managers on pay transparency policies is key to maintaining consistency and compliance across the organization. Employers should regularly track updates to transparency laws, as new regulations can emerge without warning. Using HR management platforms and seeking guidance from legal advisors can help businesses implement effective pay transparency practices, reduce risk, and build a culture of trust and accountability.
By proactively disclosing salary ranges and maintaining transparent pay practices, employers can build trust with job applicants and current employees, support fair pay, and ensure ongoing compliance with pay transparency laws.
Common Challenges and Solutions
Implementing pay transparency can lead to a 20% reduction in wage disparities within organizations. Transparency in pay practices helps identify and rectify inequities related to gender, race, or other demographic factors. Organizations that prioritize pay transparency are perceived as more ethical and socially responsible, improving their reputation.
Younger generations, like Millennials and Gen Z, increasingly demand pay transparency as a standard for fairness and accountability, particularly in addressing pay gaps. Some legislation prohibits employers from asking about an applicant's salary history, even if the applicant requests this information.
Governments may struggle with enforcing compliance with pay transparency regulations, particularly as adherence is often lacking even among firms that attempt to follow the laws. Additionally, certain laws require employers to provide salary information to current employees seeking details for promotions or internal transfers.
Resources for HR Managers
HR managers have access to a variety of resources to help navigate pay transparency laws and implement fair pay practices. Leading organizations like the Society for Human Resource Management (SHRM) offer comprehensive guidance on transparency laws, pay equity, and equal pay. The Equal Employment Opportunity Commission (EEOC) also provides valuable resources on pay equity and compliance with federal regulations.
In addition to these organizations, HR management platforms can streamline compliance by automating job postings and tracking salary range disclosures. Legal advisors can offer tailored advice on local and state transparency laws, while webinars and industry conferences keep HR professionals informed about the latest developments in fair pay practices.
By using these resources, HR managers can stay ahead of evolving transparency laws, champion pay equity, and position their organizations as leaders in fair pay and equal opportunity.
Why Pay Transparency Matters in 2025
As more states require pay transparency, HR managers must stay ahead by building hiring practices that are both compliant and equitable. Openly sharing salary ranges and avoiding questions about pay history are no longer just best practices; they’re becoming legal requirements.
By addressing pay disparities head-on and ensuring consistency in how salary information is communicated, organizations can foster trust and fairness across teams. Tools like Fonzi help streamline this process by automating compliance checks and standardizing communication across roles. Embracing transparency and technology is essential to creating a workplace where everyone can thrive.
Future of Pay Transparency
The future of pay transparency is marked by continued growth in the number and scope of pay transparency laws. More states and cities are expected to require employers to disclose salary ranges, benefits, and other compensation programs in job postings and throughout the hiring process. As transparency laws evolve, employers must be proactive in reviewing and updating their pay policies, training managers, and ensuring compliance with new regulations.
Embracing pay transparency and fair pay practices not only helps reduce pay gaps but also enhances employee satisfaction and strengthens an organization’s reputation as a fair and equitable employer. By staying informed and adapting to changes in pay transparency laws, employers can remain competitive, attract top talent, and foster a culture of trust and fairness.
As pay transparency continues to shift, organizations that prioritize transparent pay practices and compensation programs will be best positioned to thrive in an increasingly regulated and employee-focused environment.
