US Pay Transparency Laws 2025

Picture this: Your London-based fintech company has just secured a significant partnership with a major investment bank in New York, and you’re ready to expand your US operations by hiring your first American employees. You post an ideal job listing for a Senior Software Engineer position, offering competitive benefits and an exciting opportunity to build groundbreaking financial technology. Within weeks, however, you receive a formal complaint from the New York State Department of Labor—you’ve violated the state’s pay transparency law by failing to include salary ranges, potentially exposing your company to fines of up to $3,000 per violation and creating legal liability that could derail your expansion plans. Meanwhile, your competitor from Berlin, who researched US compliance requirements and included proper salary ranges, has already attracted top-tier candidates and gained valuable market traction. 

Welcome to the US pay transparency revolution, where 14 states have enacted pay transparency laws as of July 2025, and the landscape is changing faster than most international companies can adapt. 

For foreign employers expanding to the United States, pay transparency presents both an unprecedented compliance challenge and a strategic opportunity. You’re not just entering a market where compensation discussions were once taboo—you’re navigating a complex patchwork of state and local laws that can make or break your hiring strategy. Although there is no comprehensive federal pay transparency law in the United States, pay transparency laws at the state and local levels are becoming increasingly prevalent. 

The difference between companies that thrive and those that struggle often comes down to understanding how to leverage pay transparency as a competitive advantage while avoiding the costly pitfalls that trap unprepared international businesses. 

Why Pay Transparency Will Define Your US Hiring Success 

Here’s what many international executives don’t realize until it’s too late: pay transparency isn’t just about legal compliance—it’s about business survival and competitive advantage in America’s talent-driven economy. 

Pay transparency laws are transforming workplace norms and employer responsibilities across the United States and beyond. When companies fail to comply with these rapidly evolving requirements, they face more than just financial penalties; they also risk reputational damage. They lose access to top talent, damage their employer brand, and miss opportunities to attract candidates who increasingly expect transparency in compensation discussions. 

“Pay transparency has fundamentally changed the hiring landscape,” explains Joanne Farquharson, President & CEO of Foothold America. “International companies that understand and embrace these requirements gain significant advantages in attracting talent, while those that ignore them face escalating compliance risks and missed opportunities.” 

The challenge is multifaceted: laws are patchwork, which can make it tricky for employers to comply with varying regulations, especially if they employ people in multiple states where different rules apply. What’s compliant in Texas may violate California law, and requirements that seem straightforward at the federal level become complex when used across different state jurisdictions. 

But here’s the strategic opportunity: companies that master pay transparency requirements position themselves as progressive employers committed to fairness and equity, attracting candidates who value these principles while protecting themselves from the compliance risks that derail unprepared competitors. 

The Current Pay Transparency Landscape

States with Active Pay Transparency Laws 

As of July 2025, 14 states have enacted pay transparency laws with varying requirements, employer thresholds, and effective dates.

Since 2021 

• California – effective January 1, 2023 

• Colorado – effective January 1, 2021 

• Connecticut – effective October 1, 2021 

• Hawaii – effective January 1, 2024 

• Illinois – effective January 1, 2025 

• Maryland – effective October 1, 2024 

• Minnesota – effective January 1, 2025 

• New Jersey – effective June 1, 2025 

• New York – effective September 17, 2023 

• Nevada – effective October 1, 2021 

• Rhode Island – effective January 1, 2023 

• Washington – effective January 1, 2023 

New in 2025 

• Illinois – effective January 1, 2025 

• Minnesota – effective January 1, 2025 

• New Jersey – effective June 1, 2025 

• Massachusetts – effective October 29, 2025 

• Vermont – effective July 1, 2025 

Federal Legislation on the Horizon 

While no comprehensive federal law exists yet, Representative Eleanor Holmes Norton (D-DC) introduced H.R.1599, the “Salary Transparency Act,” on March 14, 2023. This bill would require all employers nationwide – regardless of size or number of employees – to include the wage range in all job postings, provide wage ranges to applicants, and provide wage ranges to existing employees for their positions. 

Violations of the Salary Transparency Act would subject an employer to a civil penalty of $5,000 for a first violation, which could be increased incrementally by $1,000 for subsequent violations and ultimately capped at $10,000 per violation. The bill remains under committee review but signals the direction of federal policy development. 

Key Requirements Every Foreign Employer Must Understand 

Job Posting Disclosure Requirements 

The most immediate impact for international companies involves the mandatory disclosure of salary ranges in job postings. However, requirements vary significantly by state: 

Illinois: Beginning January 1, 2025, employers with fifteen or more employees are required to include a pay scale and benefits in job postings. The law applies to positions physically performed at least in part in Illinois, as well as to positions reporting to a supervisor, office, or worksite located in Illinois. 

New Jersey: The New Jersey Pay Equity Act went into effect on June 1, 2025. It applies to employers with 10 or more employees during at least 20 calendar weeks in the current or preceding year who do business in New Jersey, employ workers in the state, or accept applications from New Jersey residents. 

Massachusetts: The Massachusetts Frances Perkins Workplace Equity Act (effective October 29, 2025) will require employers with 25 or more employees in Massachusetts to disclose pay ranges in job postings. 

Vermont: Beginning July 1, 2025, employers that do business in or operate in Vermont and have five or more employees must include compensation or a range of compensation in any advertisement of a specific Vermont job opening. 

Internal Posting and Promotion Requirements 

Many states extend transparency requirements beyond external hiring to internal opportunities: 
 

Illinois: Within fourteen days after making an external job posting for a position, employers must announce, post, publish, or otherwise make known all opportunities for promotion to all current employees. 

New Jersey: The law will also require employers to make “reasonable efforts” to announce, post, or otherwise make known to current employees opportunities for promotion that are advertised internally or externally, before making a promotion decision. 

Benefits and Total Compensation Disclosure 

Beyond salary ranges, many states require disclosure of comprehensive compensation packages: 

Minnesota: Job postings must also include a general description of benefits and other compensation, including any health or retirement benefits. 

Washington: Job postings must also include a general description of benefits and information about any other forms of compensation (such as bonuses, stock options, or commissions). 

Remote Work and Multi-State Compliance Challenges 

For international companies hiring remote workers, pay transparency creates complex jurisdictional questions. Washington’s law applies to any company outside of Washington that might hire Washington-based employees. The law prohibits employers from avoiding disclosure by stating in job postings that they don’t accept applicants from Washington. 

Companies operating across multiple jurisdictions must ensure compliance with various pay transparency legislation in other states. Pay transparency laws are state (and sometimes municipal) level legislation that may require employers to disclose compensation-related information regarding job positions to applicants and potentially current employees. 

“Multi-state compliance represents one of the biggest challenges for international companies,” notes Laurie Spicer, Director of US Expansion at Foothold America. “A single remote job posting visible in multiple states must comply with the most restrictive applicable requirements, creating complexity that many foreign employers don’t anticipate.” 

One practical measure for HR personnel scrambling to comply with multiple and potentially differing state-level pay transparency regulations, or companies considering hiring across state lines, is to endeavor to comply with the most stringent of applicable state regulations in which an employee of the company performs work, or where the company is recruiting new hires. 

Enforcement and Penalties: Real Financial Consequences and Legal Litigation 

Pay transparency violations carry significant financial penalties and legal exposure that can devastate unprepared international companies. The enforcement landscape has evolved dramatically, with some states experiencing waves of litigation that demonstrate the serious consequences of non-compliance. 

Washington State: The Class Action Litigation Crisis 

Washington State provides the most dramatic example of enforcement escalation. Since the state’s pay transparency law took effect on January 1, 2023, law firm Emery Reddy PLLC filed 31 lawsuits against major employers, including Adidas AG, Home Depot Inc., Marriott International Inc., Albertsons Companies Inc., and Burberry Group plc. The scale of litigation has been unprecedented, with approximately 30 class action lawsuits filed within a single week against numerous employers, alleging violations of Washington’s pay transparency law. 

The financial stakes are severe. The suits seek not only declaratory and injunctive relief but also statutory damages in the amount of actual damages or $5,000 per violation, whichever is greater, for each applicant. This means that a single non-compliant job posting, viewed by hundreds of applicants, could result in hundreds of thousands of dollars in damages, plus attorney fees. 

The litigation crisis became so severe that the Washington State Legislature almost unanimously passed an amendment to its pay transparency law, which led to hundreds of class-action lawsuits. Numerous employers still face millions of dollars in potential liability. The Association of Washington Business reported that approximately 250 employers have been sued for allegedly failing to include a salary range, resulting in as much as half a billion dollars in potential liability. 

State-by-State Penalty Structures 

Beyond Washington’s litigation crisis, other states impose substantial direct penalties: 

New York: Civil penalties of $1,000 for the first violation; $2,000 for the second violation; and $3,000 for the third and any subsequent breaches. (New York State Department of Labor) 

California: A court can assign a company a penalty of up to $100 per employee for a first violation and up to $200 per employee for subsequent violations. So, the larger the company, the larger the potential penalty. For job posting violations, employers can be ordered by the Labor Commissioner to pay a civil penalty ranging from $100 to $10,000 per violation. (California Department of Industrial Relations) 

Colorado: Civil penalties of no less than $100 and no more than $10,000 per violation. The director is authorized to enforce actions against an employer concerning transparency in pay and employment opportunities, including fines of between $500 and $10,000 per violation. (Colorado Department of Labor and Employment) 

New Jersey: Violations carry fines of up to $300 for the first offense and up to $600 for subsequent violations, enforced by the New Jersey Department of Labor and Workforce Development. 

Nevada: $5,000 for each violation in addition to investigative costs and attorneys’ fees. The Labor Commissioner may impose against any employer or employment agency that is found to have violated any provision an administrative penalty of not more than $5,000 for each such violation. (Nevada Revised Statutes § 613.133) 

The Enforcement Reality for International Companies 

The enforcement landscape reveals several critical patterns that international companies must understand: 

Volume of Complaints: Washington’s Department of Labor and Industries received 224 complaints about employer non-compliance through the end of September 2023 alone, demonstrating active enforcement. 

Class Action Exposure: Within a few months of the pay transparency law’s effectiveness, multiple plaintiffs, represented by Emery Reddy, PLLC, filed multiple putative class-action lawsuits against various companies that had job postings allegedly in non-compliance. 

Repeat Plaintiff Pattern: Courts have raised concerns about professional plaintiffs who systematically search for non-compliant postings to generate lawsuits. However, Judge Barbara Rothstein ruled that simply not including a pay range in a job posting is a mere technical violation, not enough to establish standing for an applicant to bring suit in federal court. 

For international companies, these real-world enforcement examples demonstrate that pay transparency compliance is not theoretical—violations result in immediate financial exposure, legal costs, and operational disruption that can severely impact expansion plans. 

Best Practices for Salary Range Development 

Good-Faith Estimation Requirements 

Most state laws require “good-faith” salary ranges that reflect realistic expectations for actual compensation. The range comprises the minimum and maximum annual salary or hourly compensation range, based on the employer’s good-faith estimate, for a job opportunity at the time of posting. 

Such term may include reference to any applicable pay scale, previously determined wage range for the position, the actual wage range for those currently holding equivalent positions, or the budgeted amount for the position, as applicable. 

Avoiding Common Pitfalls 

Open-Ended Ranges: The Minnesota law expressly prohibits employers from posting open-ended pay ranges. Guidance from the Illinois Department of Labor states that employers should avoid using open-ended phrases, such as “$40,000 and up” or “up to $60,000.” 

Commission and Tipped Positions: For commission-based roles, employers must disclose that the position is commission-based, but aren’t required to disclose the commission structure or a compensation range. For tipped positions, include the base wage or wage range. 

Integration with Equal Pay Compliance 

Pay transparency laws complement existing equal pay requirements under the Equal Pay Act of 1963. The EPA prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions. 

All forms of pay are covered by this law, including salary, overtime pay, bonuses, stock options, profit-sharing plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits. 

Your pay transparency efforts must align with the Equal Pay Act and comply with EEO regulations. It’s not just about posting ranges—it’s about proving those ranges are equitable across protected categories. 

Common Compliance Mistakes International Companies Make 

1. Assuming Contract Terms Control

Many international companies assume that independent contractor agreements automatically exempt them from pay transparency obligations. However, most laws focus on the actual working relationship rather than contractual designations. 

2. Ignoring Local Variations

Some cities have their requirements, including New York City, Ithaca, and Westchester County, NY, as well as Cincinnati, Columbus, and Toledo, Ohio. Companies must research local requirements in addition to state laws. 

3. Inadequate Range Documentation

Failing to document the methodology for determining salary ranges can create compliance issues during audits or investigations. 

4. Third-Party Posting Oversights

Coordinate with third parties you use to assist with job postings to ensure they are complying with the applicable requirements, if needed. 

How Foothold America Supports Your Pay Transparency Strategy 

At Foothold America, we’ve successfully helped numerous international companies navigate the complex landscape of US pay transparency requirements. We understand that compliance must serve your business objectives while positioning you competitively in the American talent market. 

Our comprehensive approach includes: 

• Multi-State Compliance Analysis – We analyze your hiring footprint and identify all applicable requirements across federal, state, and local jurisdictions. 
   

• Salary Range Development – Our compensation experts help establish market-competitive ranges that comply with good-faith estimation requirements while supporting your talent acquisition goals. 
   

• Technology Integration – We connect you with leading HR technology platforms that streamline pay transparency compliance while providing competitive intelligence. 
   

• Ongoing Monitoring – We provide continuous updates on regulatory changes and help adapt your practices as requirements evolve. 
   

• Strategic Positioning – We help transform compliance obligations into competitive advantages that strengthen your employer brand and talent attraction capabilities. 

Your success in the American market depends on mastering these evolving requirements while leveraging them strategically. Investing in proper pay transparency infrastructure yields enormous dividends through enhanced talent attraction, reduced legal exposure, and competitive differentiation. 

Conclusion: From Compliance Challenge to Competitive Advantage 

Pay transparency represents one of the most significant shifts in American employment practices in decades. For international companies, these requirements initially appear as complex compliance obligations that vary by state and are subject to frequent changes. However, companies that approach pay transparency strategically discover powerful tools for attracting talent, demonstrating values alignment, and gaining competitive advantages. 

The key to success lies in understanding that pay transparency is not just about legal compliance—it’s about building trust with candidates and employees while positioning your company as a progressive, fair employer in a competitive market. Companies that embrace transparency early, implement comprehensive compliance systems, and leverage these requirements strategically consistently outperform competitors still struggling with basic compliance. 

The regulatory landscape will continue evolving, with federal legislation likely and additional states implementing requirements throughout 2025 and beyond. International companies that establish robust pay transparency frameworks position themselves advantageously for future changes, avoiding the costly mistakes that can trap unprepared organizations. 

To stay ahead, companies should proactively review and update their pay policies to ensure they align with both current legal requirements and evolving workforce expectations. 

Ready to transform pay transparency from a compliance challenge into your competitive advantage? Contact our team of US expansion specialists today to discover how Foothold America can support your pay transparency strategy and accelerate your path to American market success.