Pay transparency laws will take effect in five states next year, bringing the total states with legislation to help end salary gaps to 14, according to the National Women’s Law Center (NWLC).
Several other states are considering similar legislation, Paycom reported. Meanwhile, a handful of cities, such as Toledo, OH and Washington D.C., have enacted such laws.
“There is a cultural phenomenon that we are witnessing,” said Da Hae Kim, state policy senior counsel for the NWLC.
Indeed, even companies that aren’t directly affected by the laws are releasing information about salaries, said Mariann Madden, co-lead of pay equity at WTW. She said expectations of more state laws are pushing companies to release more salary data. And while Madden doesn’t anticipate any new federal legislation, she said that companies operating in the EU are readying to comply with sweeping pay transparency legislation that goes into effect in June 2026.
Three-quarters of North American companies post hiring rates or ranges for external job candidates, while 69% divulge them to internal candidates, according to a WTW report issued in September. Nearly 90% of companies that provide the rates or ranges do so all over the country and not just in select locations.
“The writing [is] on the wall in terms of the increased legislation across the US,” said Madden, encouraging employers, “rather than ignore what is happening outside of their own backyard, to be ready for it.”
Women working full-time throughout the year typically earn only 83 cents for every dollar earned by a man, NWLC reported. The situation for women of color is even worse. Black women working full-time, year-round typically make only 69 cents for every dollar earned by white non-Hispanic men, while Latinas earn only 57 cents.
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The five states that will start enforcing their laws in 2025 are Illinois, Massachusetts, New Jersey, Minnesota, and Vermont. All the laws are different, though there are several that have some common factors such as requiring pay ranges to be listed on job ads. Madden said that most of the laws focus on job seekers—something she believes should be amended so current employees also have access to information. She said workers can become distrustful of their employers if applicants receive more information they can’t access.
Madden added that the laws should carry teeth to ensure companies comply.
“If there’s not a big enough fine or repercussion for not complying, some organizations will wait until they’re absolutely slapped with something to comply with the provisions,” Madden said.
Pay transparency laws have only been in place for a few years, so Kim says it is too soon to tell whether they have helped close the pay gap. However, a Women’s Foundation of Colorado report released earlier this year found the pay gap in the state decreased by seven cents since its law was implemented in 2021. Now women earn 85 cents for every dollar earned by a similarly qualified man, up from 78 cents. That equals about $3,000 annually. The report added that California shrank its pay gap by three cents since its law was enacted in 2023, while Washington narrowed its gap by five cents.