- If you've been on the job hunt lately, you might notice a new trend in online employment listings.

Once you scroll past the requirements for three to five years of experience or proficiency in Excel, you might see an actual salary range for the job.

- That's right.

Thanks to a wave of pay transparency laws sweeping state legislatures, more states are requiring employers to disclose salary ranges to would-be workers.

- Which could be great for you.

I mean, who wants to go through the process of optimizing a cover letter for AI screening tools, taking a written skills test, and acing three rounds of interviews only to find out that the pay isn't remotely what you expected.

- But does writing a salary range into a job description impact how much you actually take home?

(upbeat music) In 2021, Colorado became the first state to enact a law requiring employers to disclose compensation in all job postings and notices, both internal and public.

Meaning every role posted to an online job board or even circulated among existing employees had to include a realistic salary range.

- The goal of this law was to prevent pay discrimination by forcing employers to decide how much a particular role was worth before they knew who they would hire.

At first, employers balked.

Colorado's law took effect at a time when many companies were newly open to recruiting remote talent.

But some employers advertised roles that were eligible to be performed anywhere in the country, except Colorado, to avoid having to include salary information.

That loophole didn't last long though.

Over the next four years, 13 more states and Washington, D.C. have followed suit, passing their own pay transparency laws.

- After laws take effect in New Jersey, Illinois, Vermont, Massachusetts, and Minnesota in 2025, PayScale estimates that one in three workers in the U.S. will be covered by transparency laws.

So what changes can workers expect to see when these laws take effect?

For one, salary could become less tied to an individual's negotiating power.

The recruitment process can feel like a game of chicken where both the applicant and the employer want the other person to say a number first.

- [Philip] But when employers have to disclose a pay range, it can protect applicants from asking for a number that's way too low, which can stunt their earning power over the course of their entire career.

Negotiation can also backfire for women and people of color who are less likely to receive pay raises, even when they ask for them.

- The National Women's Law Center identifies wage transparency as a tool to close the gender wage gap because it makes negotiation a much smaller part of determining salaries and it keeps employers accountable.

After all, it's not just applicants who can see the pay ranges for posted positions.

Current employees can also compare what they make to the salary bands on advertised roles and use that information next time they ask for a raise.

- On the downside, if you were a stellar negotiator before transparency laws, that talent might not get you so far now.

A 2022 analysis of Chinese companies found that transparency can compress wages toward the median.

That could be good if you were getting underpaid, but not so fun if you're usually on the higher end of the pay ranges.

These researchers noted that employers might be hesitant to court superstar applicants with exceptional pay for fear that other employees will expect to get bumped up to their pay level.

So pay transparency could be a step in the right direction for some workers seeking fairer pay, but how does this all shake out for employers?

- Well, they could definitely experience some growing pains as they shift to more transparent pay.

It takes a lot of effort on the front end to evaluate compensation practices and set salary bands that are based on something more objective than how much the applicant sitting in front of you is asking for.

And if that evaluation reveals that there are wage gaps within your company, that's a quick way to tank morale.

But on the upside, transparency can help attract new talent.

The job posting site Indeed reports that companies that include a pay range in listings received three times more applications than those that didn't include pay information.

- And if you don't live in a state where your employer is required to be transparent about pay, that doesn't mean that you can't be.

As we discussed in our episode about unions, most private sector employees in the U.S. are protected by the National Labor Relations Act of 1935, which allows workers to take collective action for issues that impact them at work, whether those workers are in a union or not.

- And one of those protected actions is discussing pay with your coworkers.

Private employers covered by the NLRA can't retaliate against employees who discuss their pay, though they might be able to stop you from discussing it on employer-provided communication channels or devices.

So it may be best to take that conversation outside the company Slack chat.

- Having these tough conversations with your coworkers may expose pay disparities.

Maybe you find out you make way less or way more than someone with a similar role, or even someone with less experience than you.

Still, you can use that information to find out what your role is worth and negotiate for a raise, or know what to ask for next time you go on the job hunt.

- Most of these laws haven't been in place long enough for us to know about their long-term effects, but it's likely that a salary range in job postings alone won't be enough to end wage gaps for good.

- That's why Colorado's law only included pay transparency in job postings as one piece of the puzzle.

Their Equal Pay for Equal Work Act also reinforces employees' right to discuss pay without retaliation from their employers, requires employers to keep records of wages and job descriptions, and asks employers to be more transparent about how current employees can advance internally within their companies.

- With all these pieces working together, Colorado reports that in the four years since their law took effect, their gender wage gap has closed slightly.

Women earned an average of 78 cents on the dollar compared to similarly qualified men in 2021.

But by 2024, that number had risen to 85 cents on the dollar.

- [Philip] The idea is that more transparency at every step of employment could serve to make things fairer for employees, from filling out an application to working your way up the corporate ladder.

- These new pay transparency laws are a first step that can reveal a lot of information about wage disparities, but then it's up to lawmakers, employers, and employees to work together to act on it.