Pay transparency promised pay equity. Is it working?

In 2007, Supreme Court Justice Ruth Bader Ginsburg wrote a blistering dissent in a Title VII case brought by Lilly Ledbetter, a former supervisor at a Goodyear Tire and Rubber plant who discovered she was paid less than male colleagues in equal or less senior positions, and sued for sex discrimination.

The dissent touched upon the pervasive problem of secrecy that today’s pay transparency laws are trying to solve. “Pay disparities often occur, as they did in Ledbetter’s case, in small increments; cause to suspect that discrimination is at work develops only over time,” Ginsburg wrote. “Comparative pay information, moreover, is often hidden from the employee’s view. Employers may keep under wraps the pay differentials maintained among supervisors, no less the reasons for those differentials.”

By the time Colorado enacted a law requiring employers to share salary information with potential job seekers in 2019, policymakers had been wrestling with fair pay issues like this one for decades. At the federal level they sought to remedy them first with the Equal Pay Act of 1963, and later with the Lilly Ledbetter Fair Pay Act of 2009, which expanded the statute of limitations on discrimination claims like Ledbetter’s, removing a hurdle for employees bringing lawsuits.

Thanks to pay transparency laws that have been enacted in more than a dozen US states and Washington, DC, workers have access to much more information about how their employers pay, and why. But like the policies that came before them, these laws haven’t yet resulted in a meaningful narrowing of the gender pay gap—one key goal of the movement.

The goal. Though pay transparency can refer to a variety of different compensation practices, the term generally describes laws requiring employers to disclose a good-faith salary range for the jobs they advertise.

Advocates who supported pay transparency legislation believed “giving people information at the time of a new job search was really crucial,” said Helena Almeida, VP, managing counsel with ADP. “It’s harder to increase somebody’s salary while they’re in a particular role. So getting that information to people at the beginning of a new job was vital.”

These pay transparency measures were preceded by a wave of state laws banning employers from asking about a candidate’s salary history, which was already helping to change the dynamics of compensation and bargaining power in the workplace, she added.

Colorado was the first state to enact a pay transparency law, as Gov. Jared Polis signed a bill requiring employers to post salary ranges into law in May 2019. In the bill’s text, legislators cited the persistent gender pay gap as inhibiting women’s earning potential and ability to provide for their families.

“It is the intent of the general assembly to pass legislation that helps to close the pay gap in Colorado and ensure that employees with similar job duties are paid the same wage rate regardless of sex, or sex plus another protected status,” the legislation stated.

Since the Colorado law took effect, more than a dozen other states have moved to pass salary range legislation with a similar stated goal of closing pay gaps across gender, race, and ethnicity. By the end of 2025 similar laws will be in effect across 14 states and Washington, DC, including in major markets such as New York, San Francisco, Chicago, and Boston.

More recent legislation has referenced the fact that salary transparency is now seen as a business imperative as much as a means to narrow pay gaps. The Massachusetts Attorney General’s Office, whose pay transparency law goes into effect this October, asserts that beyond ensuring workplaces are more equitable, the policy “will help strengthen the Massachusetts economy and its competitiveness by attracting and retaining the best talent.”

Employers are starting to pick up on the attraction and retention piece as well, as many are including salary ranges in their job postings, even if they’re not hiring in a jurisdiction that requires them to do so. Nearly 60% of US job advertisements on career site Indeed included compensation information as of May 2025.

The domino effect that’s occurred in sync with the passage of these laws is in part a reflection of workers expecting pay transparency from current and prospective employers. Some 36% of job candidates surveyed by research firm Gartner in 2024 said they decided not to apply for a job over the past year because the description lacked a salary range.

The realities. Many employers appeared to be caught flat-footed by the Colorado requirements when they took effect in 2021. Companies like Samsung, Johnson & Johnson, and Nike initially excluded Colorado-based applicants from job postings to avoid including salary ranges for open roles.

As new pay transparency laws took effect in New York and California, some employers posted ranges so wide it was hard to see how they could possibly be helpful to workers, or a “good faith” representation of what they paid. Citigroup, for example, advertised a job for a client service officer and listed the salary range as anywhere from $0 to $2 million. After being called out, the bank attributed the initial range to a technical error and changed it to $61,710–$155,290—still a difference of nearly $100,000. Meanwhile, the New York City Commission on Human Rights filed a complaint against Tesla for posting some jobs without salary ranges, and others that were “not in good faith.” The complaint cited a role for a field service technician that was listed as paying anywhere from $22 to $58 an hour.

Such ranges often don’t seem reasonable to current employees or job candidates, said Gail Greenfield, EVP of pay equity and total rewards strategy and solutions with software firm Trusaic. “But of course, when these ranges were created, they weren’t meant to be shared with anyone, really, outside of HR, except perhaps for managers,” she said. “Over time, organizations are probably going to want to narrow their pay ranges” so they allow employers to reward workers differently “based on legitimate factors,” but also “don’t set off alarm bells that somehow this information can’t be trusted.”

The biggest challenge employers face is deciding how transparent they want to be, Greenfield said. Becoming transparent can be a costly and time-consuming process for organizations, especially if they need to correct inequities that may be unearthed in the process. If a company has major pay inequities or pay compression issues that need to be addressed, for instance, sharing more information than what’s required could be risky, according to Greenfield. “I’ve kind of bristled at the assumption that companies should just be more transparent…that’s just simply not going to be viable for every organization.”

Wolters Kluwer, an information services company headquartered in the Netherlands, is only publishing salary ranges for jobs in locations where it’s required for the moment, said Elisa Wyman, SVP of global rewards and DEIB. “We understand that it’s not something that happens overnight,” she said of the company’s pay transparency journey, which includes training managers to have conversations about compensation, and getting salaries aligned with a global job structure.

Given Wolters Kluwer employs about 21,000 workers across 50 countries, the process of becoming totally transparent is fairly complex, Wyman said. While the firm isn’t yet ready to publish compensation for all open roles, it did share its global pay equity analysis in its 2024 annual report, which showed an adjusted gender pay gap of 3.1% across the company.

Chicago-based digital consulting firm West Monroe opted for full transparency, according to chief people officer Tanya Moore.

“It’s naive to think that employees don’t talk about their compensation,” Moore said when asked why her organization opted to share salary ranges for all US-based roles, even in locations where it’s not required. She pointed to anonymous forums like Fishbowl or Glassdoor as places employees might turn to if they can’t get the information from HR. “If we hide information, I really believe that employees are going to fill in the blanks with assumptions, and often those assumptions aren’t accurate, and they tend to not be positive.”

Moore acknowledged, though, that full transparency requires a fair amount of investment in education and resources so employees understand why they’re paid what they’re paid. As West Monroe prepares to publish salary bands internally, it’s also training its managers about the company’s compensation philosophy, benchmarking process, and market adjustments, so they can have detailed conversations with employees about their pay.

“You can’t do pay transparency overnight,” she said. “If you roll this stuff out without making sure you've cleaned up any gaps, making sure that you have a compensation philosophy and framework, making sure that you’ve educated people, you have resources available, it really could be a disaster.”

HR leaders are also learning that when they do decide on a transparent compensation strategy, they must stay the course. Help Scout, a remote-first software company that makes customer support tools, pays workers at the same level in the same salary range, regardless of where in the world they’re located.

If she could revisit the company’s approach, Help Scout’s VP of people Leah Knobler would differentiate salaries based on geography, she told HR Brew, as this could save the business money. But at the same time, she notes that Help Scout has been able to attract talent from lesser-known markets thanks to this structure.

“You pick what your philosophy is and what your strategy is for your company, and then you have to just kind of stick to it,” Knobler said. “Let’s continue just to do it as well as we can, understanding that maybe there are learnings, and we would do it differently if we could wave a magic wand.”

Is pay transparency working? It’s still fairly early to assess whether pay transparency laws have been effective in closing pay gaps. The gender wage gap in the US has changed little over the past two decades, as a Pew Research Analysis of government data showed it narrowed only slightly, with women earning 85% of what men earned in 2024, up from 81% in 2003.

The Women’s Foundation of Colorado, which lobbied for the passage of the pay transparency law, shared heartening statistics from the Centennial State last year with a report showing the gender pay gap for the average woman working full-time, year-round closed from 78 cents for every to dollar paid to men in similar jobs in 2021 to 85 cents per dollar in 2024.

Looking at median weekly earnings of full-time workers, though—the way the gender pay gap is typically measured—progress in Colorado looks more muted. The state’s pay gap actually widened to 82 cents on the dollar in 2023, down from 85 cents when pay transparency took effect in 2021, according to the Bureau of Labor Statistics.

Though assessing whether pay transparency will lead to pay equity is a bit of a “crystal ball” exercise, organizations will have math on their side if they take the right approach, said Kelly Voss, head of rewards and career advisory with the professional services firm Aon.

“If we’re showing salary structures, we have people falling outside of salary structures, and we’re adjusting to have people come into the salary structures, over time the math works for you,” she said.

We’re starting to see “the beginnings” of reductions in pay inequities, because pay transparency is “shining a light on how companies are making pay decisions, and in some sense, [requiring] companies to justify those pay decisions,” said Trusaic’s Greenfield.

“There’s an opportunity for pay transparency to reduce or eliminate pay inequities, at least in the long run,” she continued. “In the short run, some of the reasons that inequities are likely to persist” include “the cost of addressing existing inequities, especially for organizations that haven't done this work seriously.”

The federal government does not currently require companies to share their pay data, but individual companies have been eager to share success stories about reducing pay gaps within their organizations when they do occur. Software company SAP touted a pay equity analysis it performed in mid-2022 that showed 99% of its US employees were paid fairly—that is, the company found few instances where statistically significant differences existed across gender and race for “employees performing comparable work.”

SAP shared salaries for its North American employees internally before it started sharing them externally, which helped the company correct inequities, said Megan Smith, head of people and culture for the Americas. Sharing salary structures with current employees “really holds the employer accountable,” and creates “a lot of clarity and structure for the managers who are making these salary decisions.”

“We had a few more years’ lead time to really be thinking through making sure that that pay fairness is there,” Smith added.

While the grand ambition behind pay transparency laws to reduce inequities that still exist across the US has yet to be fully realized, the movement has shifted the culture of organizations when it comes to talking about compensation. Smith mentioned finding out someone on her team was paid more than her at a previous company when she was in her mid-20s, which marked “a turning point” in how she thought about conversations surrounding pay. She recalled resenting her manager, and being frustrated she didn’t do more to inform herself.

“Now, generationally, it’s completely different,” she said. “People feel more empowered to be able to have conversations, and they have more tools to know where to go to find this information and expect that it can be a part of a discussion.”

This is one of the stories of our Quarter Century Project, which highlights the various ways industry has changed over the last 25 years. Check back each month for new pieces in this series and explore our timeline featuring the ongoing series.

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