Pay Transparency Law Gains Momentum Across US: A Must-Know Guide For Employers In 2025

As states move toward greater fairness and equity in the workplace, pay transparency laws are gaining momentum across the U.S. New Jersey is the latest state to sign the legislation, joining Illinois, Massachusetts, Minnesota, and Vermont.

With New Jersey's Senate Bill 2310 (S2310) signed into law, employers must prepare for its implementation, which takes effect on June 1, 2025.

What Pay Transparency Laws Require

Pay transparency laws require employers to openly share compensation information with job applicants and, in some cases, employees. These laws often mandate that employers disclose pay ranges for job positions in postings or during the hiring process. The goal is to reduce pay gaps, particularly between men and women, and to prevent discrimination based on factors like age and religion.

Benefits For Employers

In addition to ensuring legal compliance, pay transparency can help employers build trust with their workforce. Being transparent about compensation shows a commitment to pay equity, which can foster a more loyal, motivated workforce. This approach is also beneficial for attracting and retaining top talent.

Here's a look at the state-by-state breakdown of upcoming pay transparency laws.

New Jersey

New Jersey's S2310 applies to employers with at least 10 employees who work for 20 or more calendar weeks, and who conduct business, employ workers, or accept job applications in the state. The key provisions are:

Job Posting Disclosures: Employers must include pay ranges or specific salaries for all job openings, both internal and external. They must also provide general details on benefits and compensation programs.

Promotion Notifications: Employers must notify employees about promotional opportunities, unless promotions are based on seniority or performance.

Temporary Employment Exemptions: Temporary help service firms and consulting firms do not need to disclose pay for speculative future openings, but must provide pay and benefit details for actual job openings during interviews or at hiring.

Penalties for Non-Compliance: Employers who fail to comply face civil penalties—$300 for the first violation and $600 for subsequent ones.

Illinois

Starting Jan. 1, 2025, Illinois' new pay transparency law will apply to employers with 15 or more employees. This law is part of Illinois' ongoing efforts to improve pay equity and promote greater transparency in the workplace.

Disclosure Requirements: Employers must include wage or salary ranges in job postings, along with a general description of benefits, such as bonuses, stock options, and incentives.

Promotion Notifications: Employers are required to notify current employees about promotional opportunities within 14 calendar days after posting externally.

Massachusetts

On July 31, 2024, Massachusetts Governor Maura Healey signed a new law that brings salary transparency to the state. The legislation includes new salary disclosure rules and reporting obligations for larger employers.

The salary disclosure requirements will start on Oct. 29, 2025, while employers with 100 or more workers will need to submit annual pay and demographic data beginning Feb. 1, 2025.

Disclosure Requirements: Employers with 25 or more employees must include pay ranges in all job postings. They must also provide pay ranges for internal promotions or transfers and offer pay range details upon request. Unlike some other states, Massachusetts' law does not require employers to disclose bonuses or additional benefits in job postings.

Reporting Requirements: Employers must submit workforce demographic and pay data, broken down by race, ethnicity, sex, and job category. Employers can meet this requirement by submitting the federal EEO-1 Employer Information Report. The Massachusetts Department of Labor will publish aggregated data annually, giving the public more insight into workforce diversity while protecting individual employer information.

Minnesota

Starting Jan. 1, 2025, Minnesota's pay transparency law will apply to employers with 30 or more employees within the state, specifically for local positions.

Salary Range Requirements: Employers should disclose starting salary ranges and describe benefits in job postings. If applicable, fixed pay rates must also be included.

Compensation Details: Salary ranges must be specific, so candidates know exactly what to expect in terms of compensation.

Vermont

Starting July 1, 2025, Vermont's pay transparency law will apply to employers with five or more employees.

Compensation Disclosures: Employers must include the salary or salary range in job advertisements. For commission-based roles, the structure must be disclosed, and for tipped positions, the hourly wage, excluding tips, must be shared.

Wide Applicability: The law applies to all businesses, organizations, and government entities in Vermont, including remote jobs tied to a Vermont office.

Exemptions: General announcements and verbal advertisements are exempt from these requirements.