What is the issue?

Salary transparency is the practice of disclosing salary and compensation publicly. These policies are intended to fight pay disparities and discriminatory compensation practices that most often impact women and other underserved groups. Similar to board diversity, almost all of the action has been in the states and not federally on Capitol Hill.

Why do nonprofits care?

This issue is relevant for nonprofits in the same way it is relevant for all employers: it can avoid discriminatory pay practices and save time on recruitment and interviews.

Nonprofits, often held to a higher standard for promoting equity, could face added public pressure to make salaries transparent. From Nonprofit Quarterly: “Supporters and leaders of nonprofits don’t want their organizations to contribute to or exemplify the problem of income inequality, wittingly or unwittingly.”

Is this legislated?

The movement for pay transparency dates back to the 2010s, when states and localities began to ban employers from inquiring about a job candidate’s salary history. Such a prohibition is now law in at least 21 states and aims to stop below-market offers, particularly to historically underpaid categories of employees, including women and people of color. Legislation addressing salary transparency has been applied to both nonprofit and commercial entities. Following are some examples — but not a complete list — of recent pay transparency legislation:

New York City began to require salary ranges in job advertisements in November 2022. California, Rhode Island, and Washington State followed in January 2023. New York State’s salary transparency law, effective in September 2023, includes two important pay transparency provisions:

• Requires compensation or range of compensation in the job description.
• Prohibits employers from taking adverse action against an applicant or current employee for “exercising any rights under the law,” such as asking for a pay range or job description.

New York’s law applies to remote work but specifies that existing laws around salary disclosure exclude remote work performed entirely out of state.

In April 2024, Maryland enacted legislation (effective October 2024) that alters the requirement that an employer disclose wage information to an applicant. An employer is required to disclose wage information in postings and to employees. A wage range disclosed by an employer has to be set in good faith. The law also prohibits an employer from taking retaliatory action against employees and requires keeping a record of compliance for at least three years.

In June 2024, Minnesota and Vermont enacted pay transparency requirements for new hires in their respective states to close the gender pay gap. Both laws require employers to disclose the starting salary range and hourly wage in all new job postings. The Minnesota law requires employers with 30 or more employees to provide salary ranges on job postings as of January 1, 2025. The Vermont law requires employers with at least five employees to disclose the compensation or range of compensation for any advertised position beginning July 1, 2025.

Massachusetts salary transparency legislation took effect in October 2024, with additional salary disclosure requirements effective October 29, 2025. The law includes various reporting requirements for any employee covered under federal Equal Employment Opportunity Commission law. It also requires employers to disclose the pay range for a particular and specific employment position when posting it, provide the pay range for a particular and specific employment position to an employee who is offered a promotion or transfer to a new position with different job responsibilities, and provide the pay range to an employee holding such position, or an applicant, upon request. The law covers employers with 25 or more employees.

In November 2024, New Jersey Governor Phil Murphy signed legislation requiring employers of ten or more workers to include wage or salary information and benefits descriptions in job postings for new positions. The law requires these employers to notify existing employees of positions that might qualify as a promotion. The law takes effect in June 2025.

What to keep an eye on?

There appears to be momentum for more states to enact related laws in the coming years. It is important for nonprofit sector employers to stay abreast of these new laws, particularly those with employees in multiple states and jurisdictions.