*Note: This article was originally published in HR 411. This article was republished for its value to compliance in multiple industries.
What might have started as a trend, pay transparency has now grown into a demand for more accountability from employers. Since 2020, new pay transparency laws have reshaped the landscape across several countries and a growing number of U.S. states.
For C-suite leaders and compliance officers, this year brings both a challenge and an opportunity as a new wave of pay disclosure laws are being introduced across five states and the European Union.
In this C-Suite 411 article, we’ll break down the latest regulations going into effect and offer a roadmap to help executives stay ahead of the curve.
What Laws are Coming and Where
United States
While there isn’t a federal mandate for pay transparency in the United States, several states have recently introduced or expanded their laws to allow for more open dialog around pay.
Five states have adopted new pay transparency regulations, bringing the total number of states with these laws to 14.
So far in 2025, three state laws have gone into effect: Illinois and Minnesota’s laws went into effect January 1, while New Jersey’s went into effect June 1. Two state deadlines are fast approaching, as Vermont’s law will go into effect on July 1 and Massachusetts’ will begin October 29. Each state’s transparency law has similar standards but follows a different set of requirements for each.
Illinois’ law applies to employers with 15 or more employees and requires employers to disclose the pay scale and benefits in job postings. Employers must inform current employees of all promotional opportunities within 14 days after the job posting is made available. This law covers all positions performed in Illinois at least in part or where the employee reports to an Illinois-based supervisor, office, or work site.
Minnesota’s laws apply to employers with 30 or more employees and also require a salary range and benefits to be shown in job postings. Minnesota state legislators also took the time to broaden the state’s other labor laws, which went into effect alongside the state’s pay transparency law.
Read more about these changes and compliance requirements here.
New Jersey’s law applies to employers with 10 or more employees over 20 calendar weeks that do business, have employees, or take applications withing the state. Similarly to the previous states, businesses are required to disclose the salary range and benefits in all job postings. New Jersey also follows the rule that employers must inform employees of all promotional opportunities but does not list a time limit.
Vermont’s law goes into effect next and applies to employers with five or more employees. This also requires job postings to have a range of compensation listed. This law is unique in that it also applies to remote workers that will “predominantly perform work for an office or work location that is physically located in Vermont.”
Massachusetts’ law applies to employers with 25 or more employees within the state. This law has more requirements than its recent predecessors. Like the other four, job postings must have a designated pay range for the position. Additionally, employers must provide the pay range upon request for a position to an employee holding that opposition and applicants. Employers must also provide the same information to an internal employee who is offered a promotion or transfer to a new position with different job responsibilities.
Lastly, companies with over 100 employees must submit wage data reports annually, starting in February 2026. The law also prohibits employers from retaliating against employees for complaints or seeking to enforce their rights under this law.
European Union
Many countries in the European Union are also in a time crunch as the deadline for the Pay Transparency Directive is fast approaching. Employers who operate in any of these countries will need to re-educate themselves on these new regulations.
The EU Pay Transparency Directive requires all member states to transpose its provisions into national law by June 7, 2026. With Just under a year left, many countries have already created legislation to follow the directive.
So far, Belgium and Ireland have completed their legislation process and have new laws in place. Other countries like Sweden, Poland, the Netherlands, and Finland have published drafts of their proposals and are expected to implement them soon.
Each member state must implement these requirements into their legislation, so it is important to be prepared for these at a minimum.
Directive requirements for legislation include:
- Pay scale transparency in job postings.
- Employee rights to request peer pay data.
- Gener pay gap reporting and justifications for discrepancies.
- Clear definitions of “equal work” and “work of equal value.”
The goal of these requirements is to inform candidates and employees to evaluate whether they are in comparable situations considering the value of work and prohibit discriminatory recruitment practices.
How C-Suite Leaders Can Prepare
Regardless of whether your state or country has its own pay transparency laws, C-suite executives should prepare for these laws to be adopted in the future. To get that ball rolling, consider these three steps as a starter roadmap for implementing pay transparency.
1. Set clear goals
Company leaders can start their preparations by setting clear goals for pay transparency and equity. It also helps to create a system and track your progress towards achieving them.
2. Audit and Compare
The next step is to perform an audit of your company’s recruitment system and analyze current compliance regulations. By auditing your system, companies can see where they currently stand and how much they need to change.
Then recruiting managers should update their job architecture and create a roadmap for change, including internal pay equity audits.
3. Train and Inform
Additionally, HR and compliance officers should develop clear communication strategies surrounding pay, train managers to address employee questions, and focus on the bigger picture of transparency beyond just salary ranges.
Source: Littler, GovDocs
