Illinois and Hawaii join a growing list of states that have adopted pay transparency laws.
New laws recently passed in Hawaii and Illinois add to the trend of states passing legislation to require pay transparency in job postings by requiring the disclosure of pay ranges. The laws in Hawaii and Illinois add to those that went into effect in 2023 including California, Rhode Island, Washington and New York (effective September 17, 2023).
Previously, pay transparency laws were designed to protect job seekers by barring employers from asking about an applicant’s salary history. In 2021, Colorado was one of the first states to take the additional step of requiring employers to list salary ranges for posted jobs. Since then, many additional states have followed Colorado’s example by enacting similar laws. Generally, these laws prohibit any inquiry into an applicant’s salary history and require employers to list salary ranges for posted roles, with minor variations such as for the minimum size employers covered by the law and the available remedies.
Hawaii’s law requires employers with more than 50 employees to disclose the wage range to candidates. The stated purpose of the bill, like many others around the country, is to reduce pay inequality and prohibit discrimination. The law will take effect January 1, 2024.
Illinois law (which takes effect on January 1, 2025) amends its Equal Pay Act. The amended law will require Illinois employers to include pay scale and benefits information in job postings and to post or announce internally to employees all known opportunities for promotion. The requirement to include benefit information, is broader than many other states. The law defines benefits to include “bonuses, stock options, or other incentives the employer reasonably expects in good faith to offer for the position”. A pay scale disclosed in a job posting must be based on:
• Any company pay scale;
• A previously determined range for the position;
• The actual range of employees currently holding equivalent positions; or
• The budgeted amount for the position.
Meridian anticipates more jurisdictions will enact such laws and continues to track developments in this area. The attached table, which has been updated since our November 2022 update on this topic, summarizes pay transparency laws for select jurisdictions.
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The Client Update is prepared by Meridian Compensation Partners’ Governance and Regulatory Team led by Donald Kalfen and Ron Rosenthal. Questions regarding this Client Update or executive compensation technical issues may be directed to Donald Kalfen at 847-235-3605 or dkalfen@meridiancp.com or Ron Rosenthal at 847-235-3621 or rrosenthal@meridiancp.com.
This report is a publication of Meridian Compensation Partners, LLC, provides general information for reference purposes only, and should not be construed as legal or accounting advice or a legal or accounting opinion on any specific fact or circumstances. The information provided herein should be reviewed with appropriate advisors concerning your own situation and issues.
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