Maryland’s new pay transparency law goes into effect today, Oct. 1, 2024. Maryland Governor Wes Moore signed the bill (SB 525/HB 649) into law April 25, 2024.
Maryland joins a growing list of U.S. states that require employers to provide salary ranges on job postings. California, Colorado, Hawaii, New York, Washington state, and Washington D.C. all currently require salary ranges on job postings.
Illinois, Minnesota, Vermont, and Massachusetts have all passed laws that require salary ranges on job postings that will take effect in 2025. Rhode Island and Nevada require employers to disclose salary ranges to job applicants upon request, which was what Maryland previously had in place.
Action Items for Maryland Employers
Maryland employers or organizations looking to hire talent from the state should be prepared to comply with the law and its specifics. Employers of any size must provide salary ranges in all ads for jobs that will be physically performed at least partly inside the state.
Other details for employers to take note of:
- The legislation calls for using an hourly pay or salary range based on an applicable pay scale, a previously determined minimum and maximum pay for the position, the pay of an individual holding a comparable position, or the budgeted amount for the position.
- The state’s labor commissioner would handle enforcement and could impose fines. State lawmakers earlier removed language from the bill that would have allowed employees and job applicants to sue employers for violations.
The final version of the bill also omitted language covering jobs performed outside the state but reporting to an in-state supervisor or office, which would have mirrored New York state’s job ad law.
Ensure Fair and Competitive Pay at the Time of Hire
Maryland employers should already have a pay transparency strategy in place due to existing requirements. However, it’s imperative to ensure your compensation philosophy is sound ahead of publicly disclosing pay ranges on job postings.
Employers that operate in the state or are looking to hire talent from the state should prepare accordingly. Action items include:
- Conducting a pay equity analysis. A pay equity analysis will help you understand income disparities and gender pay gaps in your organization. This is made easier by using pay equity analysis software to identify pay inequities.
- Establishing a compensation philosophy. What are the Wage Influencing Factors (WIF) in your organization? Determine what you value and what you pay for, and stick to those principles.
- Evaluate job architecture. Having a well-structured job architecture helps ensure you’re placing employees in the correct job codes. When this is done correctly it informs pay eligibility and drives compensation consistency.
- Determine pay ranges. Doing the preliminary work above will help you establish pay ranges that are equitable internally and externally. Pay equity software tools assist greatly to determine competitive and fair salary ranges by overlaying internal pay equity data with external labor market data.
The Pay Transparency Landscape
Pay transparency laws continue to be prevalent in the U.S. and Europe. Minnesota, Vermont, and Massachusetts all recently passed pay transparency laws that will take effect in 2025.
Maine, Michigan, and New Jersey have pending bills. Virginia Gov. Glenn Youngkin vetoed a pay transparency bill that state lawmakers sent to his desk on March 14.
Additionally, pay transparency measures have also been proposed for federal employers by the Biden Administration. And in Europe, members of the EU are preparing for the EU Pay Transparency Directive that will take effect in 2026.
This puts the onus on employers to prepare for a new landscape where pay transparency is both a requirement and an expectation.
Pay Equity at the Center
Pay transparency legislation remains prominent, and it’s feasible that nearly 50% of employees in the U.S. will be covered under pay transparency laws by 2026.
Employers that aren’t moving toward more transparency with their compensation are at risk of being at a competitive disadvantage. Pay transparency is an expectation for Millennial and Gen Z job candidates, with research indicating this group will avoid applying for jobs that don’t include a salary range on the job posting.
Achieve Authentic Pay Equity With Software
Additionally, absent a pay transparency strategy, you limit your available talent pool. With most organizations deploying some version of a dispersed workforce model, you are required to comply with salary range requirements in other states for jobs that can be performed remotely.
The goal of pay transparency laws is to promote practices that lead to a more equitable compensation environment. Similar to salary history ban laws, requiring pay ranges on job postings promotes fair pay practices and holds organizations accountable.
If implemented thoughtfully and strategically by an organization, pay transparency can promote a better work environment where employees believe they are paid fairly. Providing salary ranges on job postings can also positively narrow the applicant pool and improve the hiring experience.
Absent salary range information, a job candidate could go through a multi-week interview process only to discover the job offer is far below their salary expectation. This wastes the candidate’s time and causes financial and reputational damage to the employer.
The task of moving toward full pay transparency can feel overwhelming for an organization. Pay equity software tools alleviate this concern by identifying the root cause of pay disparities and remedying them. Additionally, it supports the creation of equitable, compliant job postings and enables a consistent approach to pay range disclosure.
This empowers your organization to execute compensation plans with complete confidence that pay equity is at the center. And it ensures that you will be prepared to comply and thrive amid evolving pay transparency legislation.
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