New York City’s new pay transparency law went into effect at the beginning of November. While the impacts of the new policy are still unknown, the city joins a growing number of states and localities enacting legislation aiming to promote pay equity. Proponents argue these laws help reduce pay discrepancies between people of different genders and racial groups, while opponents argue they make states less attractive to employers.
The trend began when Colorado passed one of the country’s most sweeping pay transparency measures in 2019. The Equal Pay for Equal Work Act was initially seen as a gamble, with many worried it would cause employers to shy away from hiring in the state. There has been a slight drop in online job postings since the law went into effect in 2021. However, Colorado’s labor force participation rate also saw an increase compared with neighboring states without similar laws. The long-term effects of the legislation are still unknown.
Heading into the 2023 legislative session, the trend toward more pay transparency legislation will likely continue.
Despite concerns about potential negative economic impacts, other states are following suit. In March this year, Washington amended its Equal Pay and Opportunities Act to require salary disclosures in job postings, and California amended its labor code to require the same in September. California’s law also mandates state reporting of mean and median pay for employees broken down by race and gender for employers with 100 or more workers. In June, the New York Legislature passed a bill that would require pay disclosures in job postings; at publication time, it was still on Gov. Kathy Hochul’s desk.
Several large local governments are also joining these states: The city of Ithaca along with Albany and Westchester counties in New York and Jersey City in New Jersey all have enacted laws requiring pay disclosures in job postings.
Some states have taken a slightly more flexible approach. In the last two years, Connecticut, Maryland, Nevada and Rhode Island have implemented laws requiring employers to disclose salary ranges to job applicants by default or upon request during the interview process. However, they are not required to include salaries in job postings.
Heading into the 2023 legislative session, the trend toward more pay transparency legislation will likely continue. Massachusetts, Pennsylvania and South Carolina all have pending legislation related to pay range disclosures. More states could follow with their own efforts to increase pay equity.
Glenn Jacoby is a policy analyst in NCSL’s Employment, Labor and Retirement Program.