Recruitment Compliance

Mandatory Pay Range Disclosure Requirements in Job Postings

State-by-state compliance with salary transparency laws and calculating compliant pay ranges

Executive Summary

Over the past five years, a wave of state and local pay transparency laws have fundamentally changed how employers must advertise jobs. Nine states and numerous cities now require employers to disclose salary or pay ranges in job postings. These laws are designed to address wage inequality, particularly affecting women and workers of color who have historically faced wage discrimination. For employers, compliance is not optional—violations result in penalties ranging from $500 to $10,000 per violation, and in some jurisdictions, violations expose employers to private lawsuits. Yet many employers remain unclear about which jurisdictions require pay ranges, what constitutes a “good faith” range, how wide a range can be, and how to determine compliant ranges that are both legally defensible and competitive. This article provides a comprehensive state-by-state analysis of pay transparency requirements, the evolution of these laws, penalties for non-compliance, practical methods for determining compliant ranges, and compensation philosophy alignment to support both legal compliance and business strategy.

The Landscape: State and Local Pay Transparency Laws

State and Local Pay Transparency Laws as of 2025:

Colorado: Colorado Equal Pay for Equal Work Act (CRS §24-34-402) requires employers to provide a “good faith” pay range to applicants in job postings and in interview conversations when the applicant asks about compensation. The law applies to all employers in Colorado, regardless of size. Violations result in penalties of up to $10,000 per violation, plus back pay and damages.

California: California Salary Transparency Act (SB 1162) requires employers to disclose pay ranges in job postings and to provide the pay range to applicants during interviews. The law applies to employers with 15 or more employees. Penalties are up to $10,000 per violation, plus treble damages for willful violations.

Washington: Washington Equal Pay Act (RCW §49.58.005) requires employers to provide wage information in job postings. The law applies to employers with 15 or more employees. Penalties are up to $300 per violation per employee.

New York: New York Equal Pay Law (NY Gen. Bus. Law §740) requires employers to provide pay ranges in job postings. The law applies to employers in New York or posting jobs in New York. Penalties are up to $10,000 per violation.

Connecticut: Connecticut Equal Pay Act (Conn. Gen. Stat. §31-75) requires employers to provide pay ranges to applicants. The law applies to Connecticut employers with 3 or more employees. Penalties are damages plus court costs.

Nevada: Nevada Equal Pay Law (NRS §608.0197) requires employers to disclose wage information. The law applies to Nevada employers. Penalties include back pay and attorney’s fees.

Rhode Island: Rhode Island Equal Pay Law (R.I. Gen. Laws §28-7-1.4) requires employers to provide wage information to applicants. The law applies to Rhode Island employers. Penalties include back pay.

Illinois: Illinois Equal Pay Act (820 ILCS 112/20) requires employers to provide pay ranges to applicants. The law applies to Illinois employers with 1 or more employees. Penalties are up to $2,000 per violation plus back pay.

Hawaii: Hawaii Equal Pay Act (HRS §378-3) requires employers to provide wage information. Penalties include back pay and damages.

Maryland: Maryland Equal Pay Act (MD Lab. & Empl. Code §3-304) requires employers to provide pay ranges. Penalties include back pay and damages.

Local Laws: Multiple cities and counties have enacted pay transparency laws, including New York City, San Francisco, Los Angeles, Westchester County (NY), and others. Some apply to private employers; others apply to municipal contractors or government employees.

Federal Contractors: Executive Order 14026 requires federal contractors to disclose wage information and provide pay ranges to applicants. This applies to employers with federal contracts exceeding $100,000.

Future Laws: Additional states are considering pay transparency legislation. Vermont, Massachusetts, Delaware, and others have bills in process. Employers should monitor upcoming legislation in states where they hire.

Applicability Considerations:

For multi-state employers, the most restrictive law generally applies. If an employer posts jobs in Colorado, the employer must comply with Colorado’s law even for remote positions. Similarly, if the employer posts jobs in New York, New York’s law applies. The result is that many employers, rather than maintaining different posting practices by state, simply adopt the most restrictive standard (typically Colorado’s or California’s) and apply it uniformly to all postings.

Remote Work and Applicability:

A critical question: if an employer is headquartered in a state without pay transparency laws but posts jobs for remote positions, which state’s law applies?

The answer varies by statute, but generally, the law of the state where the employee would work, or the state where the job posting is visible to applicants, determines applicability. An employer in Texas (no pay transparency law) posting a remote job that would result in the employee working in Colorado is subject to Colorado’s law. An employer in a non-pay-transparency state posting jobs on Indeed.com that are visible to applicants in California is subject to California’s law.

This creates practical challenges for employers posting on national job boards. The safest approach is to assume that pay transparency laws apply to all postings and to include pay ranges uniformly.

What Constitutes a “Good Faith” Range: Colorado’s Framework

Colorado’s Equal Pay for Equal Work Act requires employers to provide a “good faith” pay range. While Colorado’s statute does not explicitly define “good faith,” the Colorado Department of Labor and Employment has issued guidance, and courts have interpreted the requirement.

A “good faith” range must be based on:

The employer’s legitimate compensation practices and actual pay for similar positions
Market data: What do employers in the same industry and geographic area pay for similar roles?
The position’s actual responsibilities, experience requirements, and skills
Any other legitimate business factors affecting compensation

A “good faith” range is NOT:

A speculative or inflated range (“We’re hoping to find someone for $30,000, but we’d go up to $150,000”)
A range based solely on budget availability rather than market or actual compensation
A range that contradicts the employer’s actual salary bands or compensation decisions
A range determined solely to comply with the law, without reference to actual compensation practices

Court cases and regulatory guidance from Colorado suggest that a good faith range should reflect the reasonable range of compensation the employer would actually pay for the position, considering the applicant’s qualifications and market conditions.

Practical Approach to Good Faith Ranges:

Establish Salary Bands: Define compensation bands by job level, function, and experience (Entry Level, Mid-Level, Senior, etc.). The band should reflect the range of compensation the employer would actually pay for positions at that level.
Reference Market Data: Use salary survey data (Salary.com, PayScale, Glassdoor, BLS data) to benchmark the position and to ensure that the stated range aligns with market norms for the location and industry.
Document the Basis: Maintain documentation showing the salary band, market data reviewed, and the rationale for the range selected. This documentation supports a “good faith” defense if the range is challenged.
Adjust for Location: If posting for multiple locations, adjust ranges to reflect geographic wage differences. A position in San Francisco may reasonably have a higher range than the same position in Denver.
Adjust for Experience Requirements: A position that requires 5+ years of experience may have a higher range than one requiring 2+ years of experience.

Example of Good Faith Analysis:

Position: Senior Software Engineer, Remote (hiring team based in Denver, CO)

Employer’s Internal Data: Current Senior Software Engineers earn $110,000–$160,000
Market Data (2024 BLS and Glassdoor): Senior Software Engineers in Denver earn $100,000–$155,000
Market Data (San Francisco Bay Area, for remote competition): Senior Software Engineers earn $180,000–$240,000
Employer decides to post: $110,000–$160,000 (reflecting internal bands and local market for Denver-based work, while acknowledging that remote work may attract candidates from higher-wage markets)

This range is good faith because it reflects:

Actual compensation the employer pays for similar positions
Market data for the primary work location
Honest assessment of the range the employer would realistically offer

Example of NOT Good Faith:

Posting: $40,000–$200,000 (spread of $160,000 is excessive and reflects uncertainty about budget rather than realistic compensation)
Posting: $80,000–$90,000 (when the employer’s actual band for the position is $100,000–$150,000 and the employer intends to pay someone with preferred qualifications $125,000; the range does not reflect what the employer would actually pay)

These ranges lack good faith basis because they misrepresent the compensation the employer would actually offer.

Range Width and Geographic Variation: NYC Guidance and Best Practices

New York City’s Department of Consumer and Worker Protection has issued guidance suggesting that pay ranges should not exceed $50,000 for non-executive positions. While this guidance is not binding law (NYC’s ordinance does not specify a maximum range width), it reflects regulatory thinking about what constitutes an appropriate range.

Wide Ranges: Implications and Risks

A wide range (e.g., $60,000–$150,000) technically complies with most state laws, which do not specify a maximum width. However, wide ranges:

Signal to applicants that the employer is uncertain about compensation or that the position is very broad
May discourage applicants in the lower end of the range, who may assume they are underqualified
Invite litigation risk if the employer consistently hires at the lower end of a wide range (suggesting the range was not good faith)
Reduce the transparency value of the law (which is intended to help applicants understand realistic compensation)

Best Practice: Narrower ranges (±20–25% variation) are more defensible as “good faith” and are more useful to applicants. For example:

$100,000–$125,000 (25% variation) is reasonable for a position with defined experience and responsibility
$100,000–$150,000 (50% variation) is wider but may be defensible if the position includes significantly different responsibilities depending on seniority level
$60,000–$150,000 (150% variation) is very wide and invites questions about whether the range reflects good faith compensation or merely budgetary flexibility

Geographic Variation

For positions that could be filled in multiple geographic areas, pay varies significantly by location. Should an employer post different ranges for different locations, or post a single range?

Approach 1: Single Range (Highest to Lowest)

Post $80,000–$140,000 for a position that could be in Denver ($80K–$120K market) or San Francisco ($120K–$160K market). This approach uses the widest range across all possible locations. It is compliant but less informative to applicants.

Approach 2: Location-Specific Ranges

Post:

Denver, CO position: $80,000–$120,000
San Francisco, CA position: $120,000–$160,000

This approach is more transparent and helps applicants understand location-adjusted compensation. It requires that job postings clearly indicate location (which is good practice anyway) and that ranges are adjusted accordingly.

Approach 3: Single Range with Location Note

Post $80,000–$160,000, with a note: “Compensation varies by location. Positions in Denver range $80K–$120K; San Francisco positions range $120K–$160K.”

This approach provides transparency without requiring separate postings. It is increasingly common and complies with pay transparency laws.

Best practice is to adjust ranges for location when significant wage differences exist across posting regions. This is more transparent and better reflects the actual compensation the employer would pay.

Internal Equity Considerations and Pay Band Validation

Disclosing pay ranges can reveal internal pay inequities if not carefully managed. For example, if a Senior Software Engineer position is posted at $110,000–$160,000, but current Senior Software Engineers only earn $90,000–$130,000 (with lower salaries concentrated in certain demographic groups), the posted range may not reflect what the employer actually pays and may signal unfair pay practices.

Before posting pay ranges, employers should:

Audit Current Compensation: Review what the company currently pays for each position and level. If ranges are inconsistent or inequitable, reconcile before posting. For example, if two Senior Software Engineers with similar responsibilities and tenure earn $100,000 and $130,000, respectively, determine whether there is a legitimate business reason (experience difference, performance, start date) or whether the difference reflects bias.
Identify and Address Unexplained Variances: If unexplained pay differences exist (e.g., certain demographic groups earn consistently less for the same position), address these gaps before posting ranges. Failing to do so can result in:

Postings that contradict actual pay practices
Equal Pay Act or Title VII violations if variances reflect discrimination
Litigation if current employees claim they are paid less than posted ranges

Develop Transparent Salary Bands: Create clear salary bands that reflect position level, experience, and skills. Document the basis for each band. These bands should reflect what the company actually pays or plans to pay.
Plan for New Hire Compression: Posting a wider range can result in new hires earning more than existing employees in the same role. Employers should consider whether they will adjust existing employee compensation to align, or whether they will accept compression. (Note: Failing to address pay compression—where new hires earn more than existing employees—can harm morale and may trigger wage and hour claims.)
Validate Ranges Against Market Data: Ensure that posted ranges align with market data for similar positions. If the posted range is significantly higher than market data, questions arise about feasibility; if it is significantly lower, the employer may struggle to attract candidates.

Pay Equity Analysis Tools:

Several tools and platforms help employers analyze pay equity and develop defensible salary bands:

Mercer PayNet, Radford, and Salary.com provide compensation benchmarking data by position, industry, and geography
ADP and Guidepoint provide statistical pay equity analysis
Some HRIS platforms include built-in compensation benchmarking

Using these tools and conducting documented analysis supports a “good faith” range determination and helps defend against pay equity claims.

Determining Compliant Ranges: Market Data and Methodology

Employers can use the following methodology to determine compliant pay ranges for job postings:

Identify Market Data Sources: Gather salary data from multiple sources to triangulate a reasonable range. Sources include: Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics, salary survey platforms (PayScale, Salary.com, Glassdoor), industry-specific survey data, and peer company compensation (if available through industry associations or consultant networks).
Select Data Relevant to the Position: Filter market data to match the position’s location, industry, company size, and function. A Senior Software Engineer position at a 500-person tech startup in Denver will have different market rates than one at a Fortune 500 company in San Francisco. Market data must reflect these factors to be relevant.
Identify Percentiles: Most salary data is presented in percentiles (25th percentile, 50th/median, 75th percentile, 90th percentile). For a given position, the 25th percentile reflects the lower end of market pay, and the 75th percentile reflects the upper end. An employer might use the 40th–75th percentile range to position itself as “competitive to premium” in the market.
Adjust for Company Factors: Consider whether the employer should pay above or below market based on company factors: startup vs. established company (startups often pay below market), growth stage, profitability, geographic location (high cost-of-living areas command premiums), and job security/stability. A high-growth startup might pay at the 50th percentile market rate, while an established, stable company might pay at the 65th percentile.
Reference Internal Compensation Bands: Once market data is gathered, check against internal salary bands. If internal bands are significantly different from market data, investigate why. Is the position significantly different from market roles? Is the company undercompensating? Has market data changed since bands were last set? Reconcile differences before finalizing posted ranges.
Document the Rationale: Maintain documentation showing market data consulted, percentiles selected, adjustments made, and the final range decision. This documentation supports a good faith determination if the range is challenged.
Build in Flexibility: The posted range should account for variation in qualifications. A Senior Software Engineer with 2 years of experience might be offered at the lower end of the range ($110K), while one with 10 years of relevant experience might be offered at the higher end ($160K). The range should accommodate this variation without being so wide that it lacks credibility.
Update Regularly: Market data changes, internal compensation changes, and roles evolve. Ranges should be reviewed and updated at least annually, or when significant market shifts occur (e.g., tech industry salary increases in 2022–2023 required rapid range adjustments).

Enforcement, Penalties, and Private Litigation Risk

Pay transparency violations expose employers to regulatory enforcement and, in some jurisdictions, private litigation.

State Enforcement:

Colorado: Violations are enforced by the Colorado Department of Labor and Employment. Penalties are up to $10,000 per violation. Additionally, applicants can file complaints with the department, which can investigate and assess penalties.
California: Violations are enforced by the Labor Commissioner and by private parties who can sue for damages and penalties. Penalties are up to $10,000 per violation, plus treble damages if violation is willful.
New York: Violations are enforced by the State Department of Labor. Penalties range from $10,000 per violation, plus damages and attorney’s fees.
Other States: Enforcement mechanisms vary, but generally state labor departments enforce violations, and employees/applicants may have private rights of action.

What Constitutes a Violation?

Violations typically include:

Failing to disclose a pay range in a job posting (in states that require it)
Failing to provide a pay range during interview conversations (in states like Colorado that require it)
Providing a range that is not “good faith” (e.g., a range based on budget flexibility rather than actual compensation practices)
Failing to provide pay range information after an applicant specifically requests it

Common Enforcement Scenarios:

An applicant sees a job posting without a range (in a state requiring it) and files a complaint. The employer receives a notice and must either post the range retroactively or face penalties.
An applicant interviews for a position and asks about compensation. The employer provides a range different from the posted range (or fails to provide a range when the state requires it). The applicant files a complaint.
An employer makes an offer below the posted range without legitimate business reason. This suggests the posted range was not good faith. The applicant or a labor department investigator challenges the range.

Private Litigation:

Some pay transparency laws include private rights of action, allowing applicants to sue for violations. California’s law explicitly allows private lawsuits. Others are enforced primarily by government agencies. Employers face potential lawsuits even in states without explicit private rights of action if the law can be interpreted to allow them.

Class Actions:

Pay transparency violations can lead to class action lawsuits if multiple applicants or employees are affected. For example, an employer that systematically posts job postings without salary information in a state requiring it could face a class action alleging violations for dozens or hundreds of applicants.

Recommended Risk Mitigation:

Audit all current job postings to ensure they include ranges where required by state law
Update application processes and offer letters to align with ranges posted
Train recruiters and hiring managers on pay transparency requirements
Establish a process for verifying that any offer made is within the posted range (or documenting legitimate business reasons for deviations)
Monitor state legislation for new pay transparency laws

How Cadient Talent SmartSuite Helps

Cadient Talent’s SmartSuite platform automates pay transparency compliance by automatically detecting the jurisdiction(s) where a job is posted and applying the appropriate pay transparency requirements. For positions posting in Colorado, California, New York, or other pay transparency jurisdictions, SmartSuite requires that a salary range be provided before the posting goes live. The system includes built-in market data integration, allowing recruiters to reference current salary survey data and to validate proposed ranges against market benchmarks. SmartSuite prompts users to document the basis for ranges (market data consulted, percentiles selected, internal bands referenced), creating a compliance record that demonstrates good faith. The platform automatically applies location-adjusted ranges for positions posted in multiple geographies, ensuring that Denver and San Francisco positions show appropriate range variations. When an offer is extended, SmartSuite verifies that the offer amount falls within the posted range (or flags deviations for manual review and documentation). By embedding pay transparency requirements directly into the job posting and offer processes, SmartSuite ensures compliance while supporting transparent, defensible compensation practices.

References and Further Reading

Colorado Equal Pay for Equal Work Act, CRS §24-34-402: Pay range disclosure requirements and good faith standard
California Salary Transparency Act, SB 1162: Pay range and wage information requirements
Washington Equal Pay Act, RCW §49.58.005: Wage information disclosure
New York Equal Pay Law, NY Gen. Bus. Law §740: Compensation transparency requirements
Connecticut Equal Pay Act, Conn. Gen. Stat. §31-75: Wage information requirements
Executive Order 14026: Pay transparency for federal contractors
New York City Pay Transparency Ordinance (Local Law 1049): Guidance on pay range width
Bureau of Labor Statistics Occupational Employment and Wage Statistics: Market data for compensation benchmarking
2024 Salary Survey Data (PayScale, Glassdoor, Salary.com): Current compensation ranges by role and geography

How Cadient Talent SmartSuite™ Helps

Cadient Talent’s SmartSuite™ platform automates compliance workflows, embeds regulatory guardrails directly into your hiring process, and maintains audit-ready documentation at every stage—so your team can focus on finding great talent while staying protected from costly violations.