Articles | Lift HCM

Pay Transparency Laws: A 2025–2026 Employer Guide

Written by Caitlin Kapolas | January 29, 2026 5:30:00 PM Z

If you feel like the ground is shifting under your feet regarding how you talk about money with employees, you aren’t alone. Between navigating remote work across border compliance and the anxiety of having your internal pay scales public, the transition to full pay transparency can feel like an administrative nightmare that risks upsetting your current team and triggering unwanted legal scrutiny.

At Lift HCM, we’ve helped hundreds of businesses transition to more efficient, compliant payroll and human capital management systems. We understand that transparency isn't just about a legal "check-the-box" exercise; it’s about maintaining culture and operational stability in a world where salary data is no longer a secret.

This article provides a practical, multi-state guide to building, posting, and auditing compliant pay ranges for 2026. You will walk away with a clear understanding of the active laws, a framework for operationalizing these ranges at scale, and a strategy to mitigate the risks that come with a more open compensation model.

Table of Contents

What Pay Transparency Requires and Who Must Comply in 2026

As of 2026, pay transparency is no longer a "trend"—it is a standard operating requirement for multi-state employers. These laws require employers to disclose salary ranges in job postings or upon request, but the requirements have become much more specific over the last 12 months.

The 2026 Compliance Landscape

By early 2026, over 16 states and several major cities have active transparency mandates. If you have even one employee in these jurisdictions, or if you are recruiting for a role that could be performed there (remote), you are likely covered.

  • Illinois & Minnesota: Both states officially activated their proactive disclosure laws on January 1, 2025. By 2026, the "grace periods" for initial implementation have largely ended.
  • Massachusetts: Since October 29, 2025, employers with 25+ employees must include pay ranges in all postings.
  • New Jersey: New Jersey's law is now in full effect. Crucially, proposed regulations in late 2025 introduced a 60% maximum spread rule—meaning your highest listed salary cannot be more than 60% higher than your lowest for the same role (e.g., a range of $100k–$160k is okay, but $100k–$170k is not).
  • California & Washington: These states remain the "gold standard" for enforcement, requiring not just the salary, but a general description of all benefits and other compensation.

Enforcement and the "Notice to Cure"

Regulators have moved from "education" to "enforcement." Many states, such as Washington and Massachusetts, provide a short window (often 2-5 business days) to "cure" or fix a non-compliant posting after a warning. However, repeat offenders in 2026 are facing fines as high as $10,000 to $25,000 per violation.

How to Operationalize Ranges, Postings, and Audits at Scale

Compliance becomes manageable when you embed pay range governance into your recruiting and compensation operations rather than treating it as a manual task for every new job.

1. Build a Standardized Pay Architecture

You cannot post a range if you haven't defined it internally.

  • Ownership: Compensation teams must set "Bands" (Min, Mid, Max). In 2026, these bands should be reviewed quarterly to keep up with persistent inflation and shifting market rates.
  • The "Reasonable Expectation" Test: Your ranges must reflect what you actually expect to pay. If you consistently hire people at the very top of your range, regulators may argue your "good faith" range was actually higher than advertised.

2. Manage the Remote Work Paradox

Remote work is the biggest compliance trap in 2026. If a role can be performed in New York, California, or Colorado, you must follow those disclosure rules even if your HR office is in Florida.

  • Template Discipline: Use "Compliance Blocks" in your job descriptions that automatically include mandatory benefits language (401k, health insurance, PTO) for transparency-heavy states.
  • Internal Promotion Notices: Remember that transparency isn't just for external hires. In 2026, states like New Jersey and Illinois require you to notify all current employees of promotional opportunities before a decision is made.

3. Establish Audit Controls

  • Retain Artifacts: If challenged, you must be able to produce the market data or internal equity analysis used to set a specific range.
  • Automate with HCM: Use your Human Capital Management (HCM) system to "lock" job postings that don't have an approved, compliant salary range attached.

Multi-State Pitfalls, Enforcement Trends, and Risk Mitigations

Multi-state employers face the "highest common denominator" problem. Trying to manage fifty different rules is a recipe for a lawsuit.

Common Pitfalls to Avoid in 2026

  • The "And Up" Language: Phrases like "$20/hour and up" are now explicitly illegal in states like Minnesota and New Jersey. You must provide a closed range with a clear ceiling.
  • The "Salary History" Trap: Over 20 states now ban asking for a candidate's previous pay. If your recruiters are still asking "What are you making now?", you are creating a massive liability.
  • Internal Equity Gaps: Transparency often reveals that newer hires are making more than veterans. In 2026, this leads to "Wage Gaps" that can trigger class-action pay equity lawsuits.

Strategic Mitigations

  • Annual Equity Analysis: Conduct a pay equity audit annually. Identify gaps by gender or race and fix them before you post a range that makes the disparity public to your entire workforce.
  • Manager Training: Give hiring managers scripts. They should be able to explain why a range is what it is without mentioning a candidate's personal history.
  • Adopt a National Standard: To simplify operations, many Lift HCM clients have moved to a "national transparency" model—posting ranges on every job, regardless of state, to build a brand of trust and avoid the "remote work trap" entirely.

Pay Transparency FAQ (Q&A)

Q: Does pay transparency apply to remote roles in 2026? A: Yes. If the role can be performed from a state with transparency laws, you must comply. Most employers now include ranges for all remote roles to avoid the risk of missing a specific state's requirement.

Q: What is the "60% Spread Rule" in New Jersey? A: Effective for 2026, New Jersey regulations state that the maximum salary in a range cannot be more than 60% higher than the minimum. This prevents employers from posting "fake" broad ranges like $50k–$150k.

Q: Do I have to list benefits like health insurance and 401k? A: In states like Illinois, Washington, and Minnesota, you must provide a "general description" of benefits and other compensation (bonuses/stock options) in the posting itself.

Q: What if I hire someone for more than the posted range? A: You should document the specific business reason (e.g., a highly specialized certification or extra years of experience). However, doing this frequently is a red flag for regulators and suggests your range wasn't "good faith."

Q: Does this apply to current employees? A: Yes. Most states now give current employees the right to request the pay range for their current position. Additionally, many states require you to post "promotional opportunities" internally so everyone has a fair chance to apply.

Q: Can I still ask for a candidate's salary expectations? A: Yes. You can ask what they want to make, but in most states, you cannot ask what they currently make or have made in the past.

Future-Proofing Your 2026 Pay Strategy

Pay transparency is no longer a "future" trend—it is the baseline for 2026. By moving from a reactive compliance mindset to a proactive compensation strategy, you can satisfy regulators while simultaneously building a stronger, more trusting relationship with your employees.

The challenge of managing overlapping state laws, avoiding "web-scraped" audits, and preventing internal pay compression is a heavy lift for any HR leader. Without a centralized, automated system, the risk of litigation and talent loss is significant.

At Lift HCM, we are more than just a payroll provider; we are your partner in human capital management. Our experts and technology suite are designed to help you navigate the complexities of multi-state compliance, ensuring your business stays ahead of the curve.