Here's where more states are mandating companies to disclose salary ranges in job advertisements.

A pay transparency law has been passed in Vermont, making it the latest state to join the growing list of states, counties, and cities that require employers to disclose their salary ranges to job candidates.

In addition to the Vermont law that takes effect next year, several recently passed laws provide workers with pay ranges in the near future.

• Washington, D.C.: Effective June 30, 2024
• Maryland: Effective Oct. 1, 2024
• Illinois: Effective Jan. 1, 2025
• Minnesota: Effective Jan. 1, 2025
• Vermont: Effective July 1, 2025

By 2025, approximately one-third of workers will be affected by pay transparency laws, according to Lulu Seikaly, senior employment counsel at Payscale.

Some states have pay transparency laws that require employers to list their intended pay range for a job on publicized job descriptions. These laws apply to workers in California, Colorado, Hawaii, Illinois, Minnesota, New York (specifically in New York City, Ithaca, and Westchester County), Jersey City, New Jersey, Vermont, Washington, and Washington, D.C.

Some states and cities require employers to disclose the pay range to job-seekers during certain stages of the hiring process, such as the first interview or offer. In some cases, candidates have the right to request this information, while in others, the employer is responsible for providing it. These laws are enforced in Connecticut, Maryland, Nevada, Cincinnati and Toledo, Ohio, and Rhode Island.

Several states, including Maine, Massachusetts, Michigan, New Jersey, and Pennsylvania, have pay transparency proposals that could be implemented before the year ends.

Seikaly tells CNBC Make It that while 2022 was recognized as the year of pay transparency, 2024 is challenging it with increased action on the legislation front.

A federal pay transparency bill has been proposed by lawmakers, but it is still awaiting approval from the House of Representatives.

"If the Democrats control the U.S. House of Representatives, the U.S. Senate, and the White House, there is a strong chance of a national pay transparency law being enacted, according to Seikaly. However, since the House is currently controlled by Republicans, he is not very optimistic about the bill being passed before the end of this year."

Pay ranges on jobs ads can close wage gaps and boost hiring

Supporters of pay transparency legislation argue that it can help bridge racial and gender pay disparities, particularly when salary ranges are included in job postings.

The wage gap among federal workers, whose salaries are publicly disclosed, was approximately 6% in 2022, compared to 16% nationally.

In Colorado, the first state to enact a pay transparency law in 2019, publicized salaries increased by approximately 3.6% after the law was implemented, suggesting that greater transparency may have given workers more bargaining power to negotiate their pay.

A majority of workers, 58%, prefer job postings that include a pay range, and 60% support implementing pay range transparency practices in their workplace, according to a September 2023 survey of 4,402 adults by the National Women's Law Center (NWLC) and Morning Consult.

One-third of workers have applied for a job they weren't interested in due to the pay range being listed.

Pay range laws impact workers beyond the states that pass them

According to research from the NWLC and Glassdoor, recent legislation has prompted employers to disclose their pay ranges, even if they are not situated in a state or municipality where such a law exists.

Joy Rosenquist, a shareholder at Littler, a labor and employment law firm, states that transparent pay policies are increasingly popular among businesses operating in multiple states. Even if they are not required to do so in certain offices, companies based in New York City with offices across the U.S. are likely to implement sweeping pay transparency policies.

"Disclosing more information than required can increase trust among candidates and employees, making it a valuable retention and recruitment tool for businesses," Rosenquist says.

Transparent pay policies are more likely to be found in top-performing companies that met or exceeded their 2023 revenue targets, according to a recent report from Payscale.

Top-performing companies prioritize transparent pay communication with their employees, while non-top performers do not.

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