Policy required document Workplace
Pay Transparency and Pay Equity Policy
A pay transparency policy says how the company sets pay ranges, publishes them in job postings and on request, answers employees who ask about pay, and reviews pay for unexplained gaps. Five years ago no state required any of it.
Now California requires employers with 15 or more employees to include the pay scale in every job posting and to give it to any applicant or employee who asks, bans reliance on salary history, and lets the Labor Commissioner impose penalties of $100 to $10,000 per violation (Labor Code 432.3); Washington requires employers with 15 or more employees to disclose the wage scale or salary range and a general description of benefits in each posting (RCW 49.58.110); New York requires employers with four or more employees to state the compensation or range and the job description in any advertisement (Labor Law 194-b); Colorado, Illinois, Massachusetts, Minnesota, New Jersey, Vermont, Maryland, Hawaii and the District of Columbia have their own versions, and the list grows most years.
Because the laws apply to postings for jobs that could be performed in the state, a remote posting reaches all of them at once.
The posting rules sit on top of the older duty that gives the policy its second half: the Equal Pay Act requires equal pay for equal work regardless of sex (29 U.S.C. 206(d)), and California, New York and others extend it to substantially similar work and to race and ethnicity, with the employer bearing the burden of explaining a gap by a legitimate factor.
A published range that a current employee sits below is the fact pattern behind the pay equity claim. The policy is where the company commits to a method for setting ranges, documents the factors that place people within them, and schedules the review that finds the gap before the employee does.
Obligation ledger
Who requires it, and what each one says.
| Source | Applies when | What it requires | Status |
|---|---|---|---|
| California Labor Code, pay scale disclosure Cal. Lab. Code 432.3 | California employers; posting duty at 15 or more employees; request duty and salary-history ban for all | Include the pay scale in any job posting (15 or more employees); provide the pay scale to an applicant on reasonable request and to a current employee for their position; do not rely on salary history in deciding whether to hire or what to pay; penalties of $100 to $10,000 per violation. Legally required. Amended in 2025, operative January 1, 2026. | Mandatory |
| Washington Equal Pay and Opportunities Act, job posting disclosure RCW 49.58.110 | Washington employers with 15 or more employees | Disclose in each posting for each job opening the wage scale or salary range and a general description of all benefits and other compensation; posting means any solicitation to recruit for a specific position, direct or through a third party, electronic or printed. A 2025 amendment gives employers five business days to cure a noncompliant posting after written notice, between July 27, 2025 and July 27, 2027. Legally required. | Mandatory |
| New York Labor Law, disclosure of compensation in job advertisements NY Labor Law 194-b | New York employers with four or more employees, for jobs performed at least in part in New York | State the compensation or range of compensation and the job description in any advertisement for a job, promotion or transfer opportunity; civil penalties under Labor Law 218. Legally required. | Mandatory |
| Equal Pay Act 29 U.S.C. 206(d) | Nearly every employer | No wage differential between sexes for equal work on jobs requiring equal skill, effort and responsibility under similar working conditions, except under a seniority system, merit system, quantity or quality of production, or a factor other than sex. State laws widen the comparison and the protected classes. | Mandatory |
Required sections
- How pay ranges are set: the method, the market data used, and who approves them
- What is posted: the range and, where required, benefits and the job description, in every posting including third-party and remote postings, with the state list
- How pay scale requests from applicants and employees are answered, and by whom
- The salary history ban: what recruiters and managers may not ask
- The factors used to place a person within a range, so that differences are documented at the time
- A pay equity review on a fixed cycle, how it is conducted, and who sees the results
- No retaliation for discussing pay or asking about it, which the NLRA and many state laws protect
- Recordkeeping: job descriptions, ranges and pay history for the period state law requires (California requires records for the duration of employment plus three years)
What the examiner asks for
What changed
Change log.
Frameworks
Where this document is required.
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Questions
What people ask.
We are in Texas. Does any of this apply?
If you post a job that could be done remotely from California, Colorado, New York or Washington, those states' posting rules apply to that posting. The Equal Pay Act applies regardless. Many employers publish ranges on every posting for that reason, which is simpler than deciding which postings are exposed.
What counts as a pay scale?
The range the employer reasonably expects to pay for the position, which is why the policy needs a method for setting it. A range wide enough to be meaningless has drawn enforcement in Colorado and Washington, and California's 2025 amendment tightened what the posted scale must reflect.
Can we ask what a candidate earned before?
Not in California, New York and the many states with salary history bans. You may ask what they expect to earn. The policy should tell recruiters exactly which question is allowed.
What is a pay equity review?
A comparison of pay for substantially similar work across sex, race and ethnicity, with the differences explained by documented factors or corrected. Doing it on a schedule, under privilege where counsel advises, is how the company finds the gap first; the posted range is how an employee finds it otherwise.
Sources
Cal. Lab. Code 432.3, pay scale disclosure (California Legislative Information)RCW 49.58.110, wage and salary range disclosure in postings (Washington State Legislature)NY Labor Law 194-b, disclosure of compensation in job advertisements (NY Senate)29 U.S.C. 206, minimum wage and Equal Pay Act (Cornell LII)