New Pay Transparency Laws and Impact on Remote Workforce

Today, there are more employers hiring remote workers than ever before.  And the new pay transparency laws have an impact on the remote workforce. For context, 4% of jobs were hiring for permanently remote positions before the pandemic.  Now, that number has rapidly grown to 36% by the end of 2022 (Kashyap, 2023).

Allowing remote work has many benefits, including the ability to hire people from anywhere in the country.  This increases the amount of flexibility employers have when hiring; however, it is important that employers do all their research prior to hiring someone outside of their home state(s).  This is because there are multiple states in the US that require pay transparency in their hiring process.  It aims to accelerate efforts to close gender and racial pay gaps (Shepherd, 2022).

California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington have adopted this new pay transparency law and require employers to list/disclose salary ranges in all job postings (Poster Compliance Center, 2023). 

What Impact Does This Have on Remote Jobs?

To fill remote positions, employers outside of the states listed above must comply with the state law if a resident of one of these states decides to take the job. 

In other words, “A strict interpretation of the law suggests that if there is any possibility that some or all of a job may be performed in [one of the pay transparency states], even remotely, the law is applicable. As such, an employer must carefully review whether there is a chance it may hire a remote worker living in [a pay transparency state],” said Jason Habinsky, an attorney with Haynes Boone in New York City (Shepherd, 2022).  If so, then the employer is required to be in compliance with that state’s pay transparency laws.  However, “If the hiring of a [pay transparency state] resident is unlikely [because a local presence is needed elsewhere], an employer could take the position that compliance is not warranted.” (Shepherd, 2022).

With more and more of the world working remotely, it is important that employers remain in the know about the laws and regulations of other states where they choose to hire employees. 

Related topics:
Employment Law
Hiring Practices
Remote Work
HR Compliance
State Pay Laws
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