Pay Attention to Pay Transparency

Host: Hello, and welcome to Prevention and Protection, the United Educators risk management podcast. Today’s podcast, Pay Attention to Pay Transparency Laws, is hosted by Hillary Pettegrew, Senior Risk Management Counsel at United Educators. Hillary is joined by Sarah Wieselthier with the law firm Fisher Phillips, and they’ll be discussing pay transparency laws.

A reminder to listeners that you can find other UE podcasts, as well as UE risk management resources, on our website. Our podcasts are also available on Apple Podcasts and Spotify. Please note, this is a risk management podcast, and nothing in this podcast should be considered legal advice. Now, here’s Hillary.

Hillary Pettegrew: Hello, everyone. I’m Hillary Pettegrew, and I’m happy to introduce my guest speaker, Sarah Wieselthier, a Partner with Fisher Phillips who specializes in employment litigation, including equal pay matters, under federal, New York, and New Jersey law.

You may be familiar with Sarah’s name because she and one of her partners, Susan Guerette, joined me for a September 2023 podcast in which we discussed various pay equity issues affecting educational employers. That episode is available on the UE website, and I’d recommend listening to it if you haven’t done so previously.

Welcome back Sarah, and thank you for returning to dive a little deeper into this topic.

Sarah Wieselthier: Thanks so much, Hillary. I’m looking forward to discussing this important topic with you today.

Pettegrew: Today Sarah and I will focus on a relatively narrow aspect of pay equity, and that’s the pay transparency laws that states and some cities have been passing at a fairly rapid pace in the last few years. In our 2023 podcast, she identified pay transparency as the hottest issue she was seeing within pay equity.

Sarah, could you please explain the basic pay transparency concept?

Wieselthier: Of course. Pay transparency is the employer practice of disclosing information about employee compensation to others — either internally, externally, or both. Over the last few years, pay transparency laws have been enacted in many states and localities to require employers to disclose a wage or a wage range to prospective candidates or employees, such as on job postings.

Pettegrew: Do pay transparency requirements apply to both salaried and hourly employees?

Wieselthier: Yes, they do. So the state laws don’t necessarily differentiate between salaried or hourly workers. Instead, they require that the hourly wage or wage range or an annual salary or the salary range be disclosed.

Pettegrew: And just to be very clear, these pay transparency requirements are based on state or local law, not federal law, is that correct?

Wieselthier: Yes, that’s right. Several states and localities have pay transparency laws, and the list keeps growing. It’s important to review the specific laws because they differ in employee thresholds for being covered by the law, the details of what must be disclosed, the timing of when information must be provided, and whether the requirements apply to jobs that can be performed by someone working remotely who may reside in that state.

To keep track, I recommend that you access Fisher Phillips’ Pay Equity Map, which is available on our website. There is a map dedicated to information about states requiring wage disclosures that is regularly updated.

Pettegrew: Thanks, Sarah, and for the benefit of our listeners, a link to the Fisher Phillips map that Sarah referenced can also be found on the landing page for today’s podcast on UE’s website. So where are pay transparency laws in effect currently?

Wieselthier: I’ll run down the list for you. Currently, there are several states and localities that have pay transparency laws with respect to job postings on the books. The first state to do that was Colorado, which enacted its law in 2021 and recently amended it in 2024.

We also have California, Connecticut, the District of Columbia, Hawaii, Maryland, Nevada, New York (including some localities: New York City, Ithaca, and Westchester County having certain pay transparency requirements). We also have Rhode Island and Washington, and then a few additional municipalities: Jersey City, N.J.; Cincinnati, Ohio; and Toledo, Ohio; all currently have pay transparency laws in place with respect to job postings.

We also have some laws that are going into effect soon. In 2025: Illinois and Minnesota both have laws that are going into effect Jan. 1, 2025. Vermont’s law is going into effect July 1, 2025, and Massachusetts has a pay transparency law going into effect July 31, 2025.

In addition, we’re continuing to monitor pay transparency legislation throughout the country. In New Jersey, the legislature recently passed a pay transparency law that’s awaiting the governor’s signature. And we anticipate more to come in 2025.

Pettegrew: Well, as you noted, it’s really important for educational institutions to review the specific laws that apply to them because of various differences you mention, such as exactly what information they have to disclose and when. But is there a common element among these pay transparency laws?

Wieselthier: Yes. The common thread among the state laws is to provide job applicants with a realistic wage or a range of wages for the role. For the most part, this is required to be in a formal job posting, although some states only require it during or after an interview for the position. Several states also require that benefits information be provided, although a simple statement like “medical benefits, vision benefits, and a 401K” is sufficient. You don’t need to dive into further detail about those benefits. There is no requirement for employers to create job postings where one would not have existed previously, however if there is a job post, it must include the information.

Pettegrew: Are there any other common elements we tend to see in these pay transparency laws?

Wieselthier: The recent laws on providing salary ranges in job posts follow legislation enacted over the last several years to achieve pay equality and pay transparency. In addition to the wage disclosures, many state laws explicitly prohibit retaliation against an employee who asks questions about their wages or about the wages of others. For example, employers should make sure that their handbook policies do not prohibit employees from discussing their compensation in the workplace because that would be a violation of the pay transparency laws.

Pettegrew: Sarah, what types of penalties can violations of pay transparency requirements incur?

Wieselthier: The penalties certainly vary from state to state. Certain pay transparency laws provide for penalties and fines. When you look at the various laws that are enacted, those may range from $100 to $10,000 per violation based upon the state and the circumstances, including if there’s been prior violations.

Certain other states provide for a private right of action, which means that an employee or a job applicant can file a lawsuit and be awarded compensatory and punitive damages, plus costs, for a violation of these job posting and pay transparency requirements.

Pettegrew: OK, thank you. And now let’s shift to some practical considerations. What advice would you have for K-12 schools and higher education institutions to help them achieve compliance with these laws, if they apply in their state or locality?

Wieselthier: It’s really important to be up to date on the pay transparency laws and, more broadly, the pay equity laws that are applicable to where your school is. The laws have evolved significantly over the last decade, and you really want to be on top of any changes, especially if you operate in multiple states because the laws may be different in those states.

Since COVID, many schools have also had remote staff who do not work on site and may not work in the same state as where the school is located. So if that’s the case, it’s important to understand whether another state’s pay equity laws may be triggered. This also comes to hiring for remote positions. For example, Washington state requires that all job postings include a wage scale or salary range and a general description of benefits — not only for positions to be filled in Washington state, but also for any company that may hire a remote employee based in Washington. So if you are advertising for a remote position that could potentially be filled by an employee in Washington state or another state with a similar requirement, you need to also be in compliance with that state’s pay transparency laws. So it’s important to really understand the scope of the laws that you need to be mindful of.

It's also really important to set realistic and reasonable salary ranges for each of the positions at your school. So you may want to consider developing pay bands or other compensation criteria for each position so that the pay ranges that ultimately end up on a job post are reasonable and realistic.

Finally, compliance with pay equity laws can be tricky, especially if you’re a multistate employer. Noncompliance with these laws can be costly, and also, realistically, be a PR nightmare. So if you are unsure whether certain pay transparency or other pay equity requirements apply to you or your school, it’s really important to consult legal counsel.

Pettegrew: Thank you, and that’s our episode for today. Again, listeners can find the map Sarah mentioned through the link on the landing page for this podcast episode on our website, or you can go directly to her law firm’s site and search “Pay equity map.” Thanks again very much for your insights on this issue, Sarah.

Wieselthier: You’re welcome. Always great talking with you, Hillary.

Host: From United Educators Insurance, this is the Prevention and Protection Podcast. For additional episodes and other risk management resources, please visit our website.