From February 2020 to February 2023, the percentage of U.S. job postings that included a pay range on the Indeed employment website rose from 18.4 percent to 43.7 percent. Driven largely, but not entirely, by state and local regulations, this 138 percent increase reflects a trend toward wage transparency.
As of July 2023, eight states and at least nine major municipalities required employers to practice wage transparency at varying levels. Other states have considered similar legislation, with Illinois on the verge of becoming the ninth state with a wage transparency law. In March 2023, U.S. Rep. Eleanor Holmes Norton introduced a federal “Salary Transparency Act“ that would require covered employers to disclose the wage range for open positions in job postings made publicly and internally.
Current regulations vary in the extent of wage transparency employers need to practice, as well as what size and type of firms are affected. California and Washington, for example, require full disclosure of a reasonable range of total compensation in all job ads for firms with 15 or more employees. Other jurisdictions demand that companies reveal the pay range for a position when they hire, promote, or, in Connecticut’s case, upon request. The fine for noncompliance can range from as little as a few hundred dollars in some states to as much as $10,000.
Every state and local law is different, but the message is clear: It’s only a matter of time before wage transparency is the rule for most U.S. businesses.