Pay Transparency Laws 2025: Why Fractional HR is Your Compliance Advantage

The rise of pay transparency laws is one of the most rapid shifts in modern employment regulation, transforming workplace norms and employer responsibilities across the United States. This legal shift reflects a massive cultural change.

75% of employers are not ready for pay transparency laws, which are currently or will be in effect in 14 U.S. states and four provinces in Canada by the end of 2025.

For employers, especially those hiring in multiple states, understanding and implementing laws in many states can be a challenge. This article will break down what these new state labor laws entail and their implications for your business.

A Snapshot of Key States

The details of employment law by state are important, as employee thresholds and specific requirements vary. In most cases, these laws take effect immediately on their enforcement date. Over time, more U.S. jurisdictions and states have enacted or are considering pay transparency laws.

 Here is a breakdown of the requirements in several key states.

• Illinois

Effective date: January 1, 2025

Who it applies to: Employers with 15 or more employees.

What it requires: The law mandates the disclosure of the “pay scale and benefits” in all public and internal job postings. This includes the wage or salary range and a general description of other forms of compensation, such as bonuses or stock options. The law also requires that employers announce promotion opportunities to current employees within 14 days of an external posting.

• Minnesota

Effective date: January 1, 2025

Who it applies to: Employers with 30 or more employees in the state.

What it requires: Minnesota's law requires employers to include a “good faith estimate” of the starting salary range or a fixed pay rate in all job postings. The range cannot be open-ended. Postings must also include a general description of all benefits and other compensation.

• New Jersey

Effective date: June 1, 2025

Who it applies to: Employers with 10 or more employees.

What it requires: The state's Pay and Benefit Transparency Act requires the disclosure of the hourly wage or salary range, plus a general description of benefits, in all job postings. It also requires employers to make "reasonable efforts" to notify current employees of available promotion opportunities.

• Vermont

Effective date: July 1, 2025

Who it applies to: Employers with five or more employees.

What it requires: Vermont’s law requires employers to include a compensation range in all job advertisements. If the role is paid on commission, that fact must be disclosed in the posting.

• Washington (Expansion)

Effective date: July 1, 2025

What it requires: Although Washington's initial pay transparency law was already in effect, a significant expansion took effect on July 1, 2025. The state's Equal Pay and Opportunities Act now prohibits pay and opportunity discrimination based on a wide range of new protected classes, including age, race, marital status, sexual orientation, veteran status, and disability.

• Massachusetts

Effective date: October 29, 2025

Who it applies to: Employers with 25 or more employees in the state.

What it requires: The law mandates that employers must disclose salary ranges in job postings. For larger employers (with 100 or more employees), it also introduces a significant new requirement to submit annual wage data reports to the state.

• Cleveland, Ohio

Effective date: Estimated October 27, 2025

Who it applies to: Employers with 15 or more employees in the Cleveland area.

What it requires: The city ordinance requires employers to provide a salary range in all job postings and advertisements. It also bans employers from inquiring about or relying on a job applicant's salary history.

Your Pay Transparency Partner

Pay transparency is no longer just a compliance task but a critical part of your talent strategy. Instead of just checking a box, what if you could turn this complex legal requirement into a competitive advantage? DianaHR provides the expert partnership to make that happen.

• Multi-state job posting compliance: Our HR experts ensure every job posting you create includes the correct, state-specific salary range and benefits information, protecting you from penalties across all jurisdictions.

• Competitive compensation benchmarking: Our payroll services keep your wage practices accurate and compliant. We also offer data and expertise to help you develop competitive salary ranges. 

• Proactive policy updates: We monitor evolving employment laws by state, update your policies, and train your hiring managers to ensure HR compliance at each stage.

Boost compliance and win over your employees with DianaHR. Chat with DianaHR today. 

FAQs

1. What is the difference between a salary history ban and a pay transparency law? 

A salary history ban is a rule that prohibits employers from inquiring about job applicants' past or current compensation. Its purpose is to prevent past, potentially discriminatory pay from perpetuating in a new role. A pay transparency law is broader and requires employers to proactively disclose wage information, most commonly by including a salary range in job postings. 

2. Do pay transparency laws apply to internal promotions? 

Yes, in many states, the laws explicitly apply to internal promotions and transfer opportunities, not just external job postings. States like Illinois and New Jersey require employers to make reasonable efforts to notify current employees of available promotion opportunities. This is intended to ensure that all employees have fair access to career advancement and that compensation for internal moves is just as transparent as it is for new hires.

3. What does it mean to provide a good-faith salary range?

Providing a good faith salary range means the range the employer genuinely believes they will pay for the position at the time of the posting. It cannot be an arbitrarily wide or misleading range. The range must include a minimum and a maximum and cannot be open-ended. The range can be updated as the employer's expectations change, but the initial posting must reflect a reasonable and realistic estimate of the compensation for the role