Two separate developments have converged on employer pay practices. The first is disclosure: a growing number of states and cities now require employers to include a salary or wage range in job postings, to give ranges on request, or to report pay data. The second is scrutiny: once ranges are public, employees compare them to their own pay, and the employer needs an answer that is more specific than "market."
As of mid-2026 there is no single federal posting requirement, and the state and local rules that exist differ in almost every dimension — which employers are covered, whether the duty attaches to postings or only to requests, whether benefits must be described, whether the range must be "good faith," and what enforcement looks like. Colorado, California, New York, and Washington are commonly cited examples of jurisdictions with posting-related obligations, but the details vary and the list keeps changing. Check the current text of each applicable state and city law rather than relying on a summary.
What posting rules generally require
Where a posting obligation applies, the recurring elements look similar even though the specifics differ. The employer must state a range it genuinely expects to pay for the role, not a placeholder spanning every level in the company. Many rules extend to third-party recruiters and job boards, so a compliant internal template does not help if an agency posts something else. Several jurisdictions also require a general description of benefits or other compensation, and some require the range to be given to internal candidates for promotions and transfers as well as external applicants.
A separate and older family of state laws restricts asking applicants about salary history, on the theory that prior pay carries forward past disparities. These bans are common enough that multistate employers usually drop the question entirely rather than maintaining a jurisdiction-by-jurisdiction script.
Watch out: a range so wide it conveys nothing is a recurring enforcement theme. If the posted band spans several levels of work, the fix is not a narrower guess — it is defining the level. Roles that have never been properly levelled are usually the ones producing implausible ranges, which is why the exercise starts with the duties written into current job descriptions.
The standards a pay difference is measured against
Disclosure rules do not create the underlying obligation. Federal law already prohibits sex-based wage discrimination for substantially equal work under the Equal Pay Act, enforced by the EEOC, and prohibits compensation discrimination on the basis of race, sex, religion, national origin, age, and disability under Title VII and its companion statutes. Recordkeeping obligations for wage data run through the Wage and Hour Division.
State equal pay statutes frequently go further in two ways. Several use a "substantially similar work" or "comparable work" standard broader than the federal "equal work" test, and several narrow the defences — for example by requiring that a factor relied on be job-related and consistent with business necessity, or by excluding prior salary as a justification. That combination means a pay gap that would be defensible federally may not be under a particular state's statute.
| Explanation | Usually defensible when | Falls apart when |
|---|---|---|
| Seniority or tenure | Applied through a consistent, documented structure | Applied ad hoc, or tenure differences are small relative to the gap |
| Merit or performance | Backed by ratings that predate the pay decision | Ratings are uniformly positive or written after the fact |
| Measured output | A real quantity or quality metric drives the difference | The metric is selectively applied across the group |
| Geographic differential | A published, consistently applied location structure exists | Location adjustments are negotiated case by case |
| Prior salary | Rarely — and prohibited as a justification in several states | Almost always; it imports whatever gap existed before |
| Negotiation | Rarely on its own | Nearly always; unequal willingness to negotiate is not a business reason |
Running a review that produces answers
A pay equity review is an analysis of whether pay differences within comparable groups track legitimate factors. Done well it is a management exercise; done casually it produces a spreadsheet that raises questions nobody has answered.
- Decide the scope and the privilege posture first. Whether the review is conducted at the direction of counsel affects how findings and drafts may be treated later. Make that call before any data is pulled, not after the results look uncomfortable.
- Build comparison groups. Group by work actually performed — level, function, and responsibility — not by title. This is where inconsistent job architecture surfaces immediately.
- Assemble clean compensation data. Base pay, plus bonus, commission, equity, and differentials, on a consistent full-time-equivalent basis and a common date.
- Identify the explanatory factors in advance. Tenure, level, location, performance rating, relevant certifications. Choosing factors after seeing results invites the criticism that the model was built to explain the answer away.
- Analyse and investigate outliers. Where a gap remains unexplained, go individual: read the history of that person's offers, promotions, and increases. Many outliers have a documented reason; the ones that do not are the point of the exercise.
- Decide remediation and record the reasoning. Adjustments, structural fixes, or a documented explanation — each outlier should end with a decision, not an open question.
Practical step: fix the process alongside the pay. Most unexplained gaps come from a small number of upstream mechanisms — offers set by negotiation rather than by band, counteroffers granted unevenly, promotion increases calculated as a percentage of an already-low base, and market adjustments given to whoever asked. Repairing individual salaries without changing those mechanisms guarantees the gap reappears.
Talking about pay internally
Publishing ranges creates predictable conversations, and unprepared managers create liability in them. Give managers the structure, the factors that place someone in a band, and permission to say "I don't know, let me find out." What they must not do is discourage employees from discussing pay with each other: employees have protected rights to discuss wages and working conditions collectively, and rules or informal pressure against pay discussion are a recurring source of trouble. Handbook language in this area needs particular care, as covered in our guide to policy acknowledgements and at-will disclaimers.
Adjusting one employee's pay after a complaint also has a retaliation dimension in both directions — raising the complainant's pay while quietly disadvantaging them elsewhere is a familiar fact pattern. The framework for that risk is in our piece on retaliation and whistleblower claims. And where pay decisions feed into performance ratings, the quality of those ratings becomes part of the pay defence, which is why performance documentation and compensation review are best treated as one system.
Quick answers
Do we have to post a range for a fully remote role?
Often yes. Several jurisdictions apply their posting rules to remote positions that could be filled by a resident of that jurisdiction, regardless of where the employer sits. Some employers respond by posting ranges everywhere; others exclude specific states in the posting, an approach that has drawn criticism and, in places, regulatory attention. Check the current rule for each jurisdiction where you will accept applicants.
Will an audit be used against us if it finds gaps?
It can be, which is why scope and privilege are decided at the start and why findings should end in documented decisions rather than open items. The alternative — not looking — is worse in practice: disparities do not resolve themselves, disclosure rules make them visible to employees, and an employer that never examined its own pay structure has no explanation ready when asked.
Can we lower someone's pay to close a gap?
Under the federal Equal Pay Act, an employer may not reduce another employee's wages to eliminate an unlawful differential, and several state statutes say the same. Remediation moves upward. Structural changes — new bands, revised increase rules — can slow future growth for a group prospectively, but cutting an existing salary to fix a comparison is not a lawful route.
Does a posted range bind us at offer time?
The range must be one the employer genuinely expects to pay when the posting goes up. Circumstances change, and some laws address updates, but routinely making offers outside the posted band undermines the good-faith requirement and is exactly the pattern enforcement looks for. If the band was wrong, correct the posting rather than the applicant's expectations.
How often should a review be repeated?
Annually is a common cadence, timed before the compensation cycle so findings can be acted on in the same year. Add an off-cycle look after an acquisition, a large hiring push, or entry into a new state, since each can import a pay structure that does not match the existing one.
Where this leaves you
Start with architecture: levels, bands, and current job descriptions. Then confirm posting duties for every jurisdiction where you will accept applicants, including remote candidates, and fix recruiter templates at the same time. Run the review with the privilege question settled first, investigate outliers individually, and close each one with a decision. Repair the upstream mechanisms — offers, counteroffers, promotion increases — or the analysis will read the same next year. The EEOC's guidance library sets out the federal standards, and the related workplace obligations sit together in the Workplace Rights & HR pathway.