outsolve insights

Imagine stumbling upon your current job being advertised online with a juicier paycheck than yours. That's exactly what happened to one woman in New York City last year. She saw a role very similar to hers on LinkedIn, but with a higher salary, and thought, "Why not apply?"

Pay transparency laws continue to gain traction in the United States as a measure to address the persistent gender pay gap and promote fair compensation. By shedding light on compensation practices, pay transparency empowers employees to make informed career decisions and encourages employers to conduct fair and equitable pay practices. Many employers are also adopting the principles of pay transparency for strategic reasons, as a way to strengthen and differentiate their talent practices.

Starting in late 2024 and early 2025, Minnesota and Maryland will implement new pay transparency laws requiring employers to include detailed compensation information in job postings. These laws are part of a growing trend aimed at promoting wage transparency and preventing wage discrimination. Here's a breakdown of what employers in these states need to know to ensure compliance.

In recent years, pay transparency has gained traction as a strategy to address pay discrimination and promote a fairer workplace. Advocates argue that making pay information openly accessible can highlight and rectify disparities, particularly gender-based pay gaps. However, while pay transparency can foster trust and improve organizational morale, it also carries potential downsides that organizations need to navigate carefully.

The March release of the EEO-1 Component 2 dashboard by the Equal Employment Opportunity Commission (EEOC) has sparked a new wave of interest in U.S. pay gaps and potential concerns for businesses. This new data portal allows users to explore pay data from large employers across various industries, broken down by race, ethnicity, gender, and job category. The data from 2017 and 2018 EEO-1 collections offers unprecedented transparency into workforce demographics and compensation practices.

In the pursuit of fair and equitable compensation practices, jurisdictions worldwide are implementing new laws to promote pay transparency and combat wage disparities. These legislative initiatives aim to address historical inequalities by prohibiting employers from inquiring about an applicant's salary history, disclosing salary ranges in job postings, and restricting the use of pay history in determining compensation. As we delve into the overview of three jurisdictions' upcoming pay transparency laws set to take effect in 2024, we'll examine the specifics of these regulations and their implications for employers and job seekers alike. 

President Biden's Executive Order 14069, issued on March 15, 2022, directed the Federal Acquisition Regulatory Council (FAR) to explore limiting or prohibiting Federal contractors from considering job applicants' or employees' past compensation when making hiring decisions. To this end, on December 4, 2023, the FAR submitted a proposal titled "Pay Equity and Transparency in Federal Contracting" to the Office of Management and Budget (OMB) for approval. The proposal was approved by OMB on January 29, 2024, and the FAR released the Notice of Proposed Rulemaking (NPRM), which was published in the Federal Register on January 30, 2024.

The District of Columbia is becoming the next jurisdiction to address income disparities and gender inequities in the workplace. On December 19, 2023, Bill 25-194, the Wage Transparency Omnibus Amendment Act of 2023, was passed to redefine how employers engage with prospective employees, emphasizing transparency in pay scales and benefits.

The signing of SB-23-105 by Governor Jared Polis on June 5, 2023, marked a significant moment for Colorado's Equal Pay for Equal Work Act. These amendments, effective January 1, 2024, are aimed at promoting greater pay transparency and fairness in the workplace. They not only extend the statute of limitations for wage discrimination claims but also introduce new mandates for the Colorado Department of Labor and Employment (CDLE) in handling these claims. On September 23, 2023, the CDLE released the proposed Equal Pay Transparency Rules (EPT Rules), which were officially adopted on November 9, 2023.