Pay transparency is about more than closing the gender pay gap

A central goal of Colorado’s Equal Pay for Equal Work Act, which passed in 2019, was to close the gender pay gap.

Colorado became the first state to require businesses to post salary ranges for open roles when the law took effect in 2021, with the aim of ensuring “that employees with similar job duties are paid the same wage rate regardless of sex, or sex plus another protected status.” As other states followed suit, they had a similar goal of eliminating disparities between what men and women earn for performing similar work.

More than five years on, the gender pay gap persists in Colorado. And while some research shows the state is making measurable progress toward closing this gap, advocates who spoke with HR Brew agree that the gender wage gap is complex, and not likely to be fixed by pay transparency alone.

Measuring progress. Different measures of Colorado’s gender wage gap tell different stories about pay transparency’s impact.

Bureau of Labor Statistics (BLS) data from 2023 shows a gender wage gap of 82% for full-time wage and salary workers. That’s three percentage points lower than the year Colorado’s pay transparency law took effect, when women working full-time earned 85 cents on the dollar, compared to full-time male workers in the state.

But a 2024 analysis conducted by economist Max Tejera on behalf of the Women’s Foundation of Colorado, which lobbied for the pay transparency law, tells a more promising story. That research, which looked at average earnings of full-time workers and controlled for a number of factors, found the average gender wage gap in the state narrowed from 78 cents in 2021 to 85 cents in February 2024. As of July 2025, the gap had narrowed even further, with women earning 86% of what men in the state earned, according to more recent figures shared by Tejera.

Tejera told us he controlled his analysis for variables including education, age, race, and industry. Though estimates like the one provided by the BLS can be useful, this calculation of the gender wage gap may be “overly simplistic,” in Tejera’s view, as it doesn’t take into account other types of factors that contribute to it, such as race- or age-based discrimination, or occupational segregation. When controlling for these variables, “I found that Colorado had a reduction of about eight cents on the dollar,” making “four times the progress on the gender wage gap than the US as a whole.”

A work in progress. Though Tejera said he believes his research indicates pay transparency will “move the needle” toward closing the gender wage gap, he doesn’t see them eliminating it entirely.

“There are large structural factors in the economy that pay transparency won’t eliminate that lead to women being paid less than men,” he said, citing phenomena such as the motherhood penalty, which refers to the decrease in earnings women typically experience after having children, and the greedy jobs problem, which helps explain why men tend to choose higher-paying occupations with more intense scheduling demands.

Louise Myrland, who advocated for pay transparency as VP of programs for the Women’s Foundation of Colorado, echoed this point.

“The pay transparency laws really seek to address the way that bias can play into pay determinations, but there are so many other contributing factors that result in women being paid less on average than men in our economy,” she said. Achieving full gender equity in the workplace will require additional structural support, such as improved access to childcare, paid leave, and flexible schedules, she suggested.

Employers’ imperative. Whether pay transparency closes the pay gap, laws like Colorado’s have already had a substantial impact on the way HR teams approach compensation. In conversations with us, HR professionals reported seeing knock-on effects of pay transparency play out in areas such as recruitment and hiring strategy.

With access to salary information, job seekers are “able to really hone their job search and the time that they put into thoughtful applications for employment to those jobs that they know will meet their earning expectations,” said Myrland. At the same time, “employers are seeing the benefit of more efficiency in the hiring process,” because they’re able to match with candidates whose salary expectations align with what the company is offering.

Emilie Aries, founder and CEO of BossedUp, a leadership development and career services company based in Denver, said she’s seen a meaningful difference in how her clients negotiate salaries post-pay transparency. She recalled coaching her clients on how to navigate the “song and dance” of getting a prospective employer to share the starting salary or pay band for a role first. If the job seeker was to come out with a salary objective that was $20,000 less than the employer had budgeted, they could “severely undercut themselves,” she said. Now that companies have to show their salary cards upfront, “we don’t have to play that game anymore,” she added.

Closing pay gaps still remains a focus of many firms, particularly if pay transparency unearths inequities that can’t be explained. When companies are successful in closing these gaps, they’re eager to tout this achievement “as part of their recruitment strategy,” said Kelly Voss, head of rewards and career advisory with the professional services firm Aon. Wolters Kluwer and SAP North America were among the companies HR Brew spoke with whose HR leaders pointed to such results.

Voss expressed optimism that pay transparency will eventually result in a narrowing of the gender pay gap, in part because younger generations are beginning to see this as a vital part of a company’s “employee value proposition.”

“I have two sons, and they tell me what their friends make, and commonly talk about compensation,” she said. “That’s the world in which they live in, and differences in pay based on gender, ethnicity, race are just not going to be acceptable in their world.”