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Pay Transparency Laws

  • By: lipplaw
    Published: October 31, 2023
Pay Transparency Laws

A recent employment law trend is the enactment of pay transparency laws. The purpose of pay transparency laws is to try to close the wage gap that exists for women and people of color.

What are Pay Transparency Laws?

Pay transparency laws in the United States place requirements on employers to share pay ranges in job postings with job applicants. Research has shown that there is a pay gap that disproportionately impacts women and people of color. The purpose of pay transparency laws is to reduce and ideally eliminate pay gaps for women and people of color, who are on average paid less. Pay transparency laws in the United States are new – the first state pay transparency law was enacted in Colorado in 2019.

What States Have Pay Transparency Laws?

The following states or jurisdictions have pay transparency laws:

  • California
  • Cincinnati, Ohio
  • Colorado
  • Connecticut
  • Illinois (Pending as of November 2023)
  • Jersey City, New Jersey
  • Maryland
  • Massachusetts (Pending as of November 2023)
  • Nevada
  • New York City; Ithaca, New York; Westchester, New York
  • Rhode Island
  • Washington

What is the Current State of Pay Transparency Laws in the United States?

Currently, there is a “patchwork quilt” of pay transparency laws in the United States. As of November 2023, approximately 14 states or jurisdictions have current or pending pay transparency laws.

Is there a Federal Pay Transparency Law?

No, there is no federal pay transparency law. There are federal laws that attempt to close the pay gap present for women and people of color or provide employees with a cause of action for discrimination based on gender or race. These federal laws are:

  • Equal Pay Act of 1963
  • Title VII of the Civil Rights Act of 1964
  • Lily Ledbetter Fair Pay Act of 2009

Are There Pay Transparency Laws in Washington, DC, Maryland, or Virginia?

Yes, Maryland has a pay transparency law. As of November 2023, Washington, DC and Virginia do not have pay transparency laws.

What is the Maryland Pay Transparency Law?

Maryland’s Pay Transparency Law, called the Wage History and Wage Range law, was effective starting October 1, 2020. The law requires a wage range to be provided to applicants upon request. The wage range is only for the position that the applicant is applying for.

Under Maryland law, employers cannot ask about wage history, or retaliate against an applicant for requesting the wage range for the position. After an initial offer of employment, an employer can rely on the applicant’s voluntarily provided wage history to support a higher wage offered by the employer and can verify with former employers the wage history that was voluntarily provided by the applicant.

The penalties for violating this law include: a misdemeanor violation, up to a $300 fine for the first violation, and up to $600 for subsequent violations, if they occur within a 3 year period of previous violations. The Commissioner of Labor and Industry is also empowered to bring a lawsuit against employers for injunctive relief and damages under this law, but there is no private right of action for employees.

What Pay Transparency Laws Apply to My Company?

Typically, the location where the employee is physically performing work will control what state law applies for purposes of pay transparency. If an employee is working remotely, then the state where the employee is working from will typically control. If an employee works from multiple states, then the state where the employee is performing the majority of their work will generally control. However, if you have a complicated situation, it is best to seek experienced employment law counsel to make sure you are compliant with applicable laws.

What Are Best Practices for Employers that Have Employees Working in Multiple States?

For employers that have employees working in multiple states, it is a best practice to regularly stay informed about the employment laws that impact the states where you have employees working.

This can be accomplished by having at least an annual review with an experienced employment lawyer of your policies and practices to make sure they are legally compliant with applicable employment laws.

If you are an employer with employees in Washington, DC, Maryland, or Virginia, and need assistance with employment law compliance, contact Lipp Law for legal assistance today.

Kathryn Megan Lipp

Katie dedicates her practice to employment separation guidance.
Based on her successful employment litigation practice...Read More