How employers can stay compliant with the rise of pay and opportunity transparency laws

Pay transparency laws are rapidly expanding across the United States, requiring businesses to rethink how they communicate compensation and career advancement opportunities. With new legislation taking effect in states like Illinois, Minnesota, New Jersey, Vermont, and Massachusetts in 2025, employers must ensure alignment with evolving regulations while maintaining competitive and fair compensation practices.

For organizations operating in multiple states, these requirements can be complex. Transparency laws impact job postings, internal promotions, salary recordkeeping, and overall pay equity efforts. Here’s what employers need to know about the latest legislative changes and how to navigate compliance effectively.

The expanding landscape of pay transparency laws

Many of the new state regulations mirror existing ones in California, Colorado, and New York, requiring employers to disclose salary ranges and benefits in job postings. However, some take additional steps by mandating transparency around internal promotions and requiring companies to maintain compensation records for several years.

For example, Illinois’ Pay Transparency Amendment, which took effect on January 1, 2025, orders employers with 15 or more employees to include pay scales and benefits in job postings. Employers must also notify internal employees of promotion opportunities within 14 days of an external job posting. Failure to comply results in escalating fines, with penalties reaching up to $10,000 for repeated violations.

Similarly, Minnesota’s new law calls for businesses with 30 or more employees to disclose salary ranges and benefits in job postings. Other states will implement similar requirements later in 2025:

• New Jersey: Effective June 1, 2025

• Vermont: Effective July 1, 2025

• Massachusetts: effective October 29, 2025

Key compliance strategies for employers

With multiple state regulations now requiring pay disclosures, businesses should take the following steps to certify compliance while maintaining competitive and equitable compensation practices.

1. Standardize job postings across locations

For companies hiring across different states, it’s crucial to develop a standardized approach to job postings to meet the strictest state requirements. If you’re hiring remotely or advertising roles nationally, assume that candidates in pay transparency states may apply and include salary ranges and benefits information upfront.

2. Conduct pay audits to ensure equity

Pay transparency is designed to reduce wage disparities, making internal pay equity more important than ever. Employers should conduct regular compensation audits to assess disparities across gender, race, and other protected categories. Ensuring that current employees are paid fairly before disclosing salary ranges externally can prevent potential discrimination claims.

3. Document and maintain salary records

Many states, such as Illinois, tell employers to maintain records of pay scales and benefits for several years. Companies should establish a structured system to document salary ranges for all positions, including historical records of past job postings. This practice helps protect against potential audits and compliance issues.

4. Prepare for internal promotion transparency

Several new regulations instruct businesses to disclose internal promotion opportunities. To align, employers should implement clear internal communication strategies, certifying all employees are informed of advancement opportunities. Creating structured career progression plans and clearly outlining promotion criteria can also help improve retention and employee satisfaction.

5. Train recruiters and hiring managers

Compliance with pay transparency laws requires alignment across recruiters and hiring managers. Providing training on legal demands and best practices ensures that compensation discussions remain compliant and that job postings consistently meet state mandates.

The future of pay and opportunity transparency

Pay transparency will likely continue expanding in the coming years, with more states expected to introduce new laws beyond 2025. Additionally, transparency rules are evolving to include opportunity disclosures, requiring employers to provide clearer promotion criteria and career advancement pathways. Staying informed on state-specific regulations and preparing for continued shifts will help businesses navigate this evolving landscape successfully.

While these changes may present challenges, they also offer an opportunity for businesses to foster trust, attract top talent, and improve workplace equity. By proactively adapting to transparency requirements and implementing structured pay and promotion practices, employers can stay ahead of compliance while building a more engaged and fair workplace.