A nationwide movement toward greater pay transparency is altering the hiring landscape across the United States.
BY TRACY ALLEN
FOR BARISTA MAGAZINE
Featured photo by Yousef Hussain
The Compensation Advantage: Real Numbers Behind the Hype
Pay transparency isn’t just a feel-good policy with theoretical benefits. Economists at the National Bureau of Economic Research say these laws are delivering disclosed salary increases of 3.6% and actual earnings increases of 1.3% for both new hires and existing employees.
This wage boost isn’t limited to those directly protected by the law; instead, it creates what researchers call a “rising tide effect” across the labor market. When salary ranges become public knowledge, job seekers gain negotiating power they previously lacked. Armed with information about what employers are actually willing to pay, candidates can make more informed decisions about which opportunities to pursue and how aggressively to negotiate.
This transparency advantage extends beyond the hiring process. Current employees also benefit when they can see salary ranges for open positions, giving them data to support requests for raises or promotions. The information asymmetry that traditionally favored employers has begun to erode, creating a more balanced dynamic in compensation discussions.
The Compliance Challenge: A Patchwork of Requirements
While the benefits to workers are clear, employers face a complicated compliance landscape. The 16 states with pay transparency laws each impose slightly different requirements, creating a particularly challenging landscape for multi-state employers.
California, for example, requires employers with 15 or more employees to include pay scales in job advertisements and maintain detailed records of job titles and pay rates for three years after employment ends. Noncompliance can trigger civil penalties ranging from $100 to $10,000 per violation. Massachusetts takes a different approach, applying its requirements to employers with 25 or more employees and mandating pay ranges for all job postings, promotions, and transfers. New Jersey adds another layer by requiring not just salary ranges but also general descriptions of benefits in job postings.
The variations extend to how states define key terms. California recently amended its law to define “pay scale” as a good-faith estimate of the salary range the employer reasonably expects to pay upon hire, eliminating the option for employers to provide overly broad ranges that encompass an entire career trajectory.
Remote work adds another dimension of complexity. Vermont’s law explicitly applies to remote positions that will predominantly perform work for a Vermont office, while other states have different standards for determining when their laws apply to remote roles. For employers hiring across multiple states, determining which jurisdiction’s laws govern each posting can be time-consuming.
Despite these legal requirements, compliance remains inconsistent. Data show that only 75% of job listings comply with pay transparency laws where they exist. This gap suggests that many employers struggle with implementation, whether due to confusion about requirements, resistance to transparency, or simple oversight.
Beyond the administrative burden of compliance, pay transparency may force employers to confront uncomfortable internal realities, such as exposing pay disparities that may have existed for years. When employees can see how much new hires in similar roles are being offered, questions will inevitably arise about why existing staff members earn less.
Employers must be prepared to explain and justify their pay structures. Eric Yochim, co-owner of Sweet Bloom Coffee Roasters in Lakewood, Colo., says of the law enacted there in 2021: “At first, it drew attention to areas that needed more organization, as well as areas where, when compared to the competition, we were falling behind. There was also the work on the administrative end to realign ourselves with the required benchmarks. But once the initial work was done, overcoming these hurdles made us a stronger company, where open dialogue is valued and where, as much as we can make it, talking freely about compensation isn’t a taboo topic.”
The transparency requirements also limit flexibility in negotiations. When salary ranges are posted publicly, employers lose the ability to adjust offers based on individual circumstances without appearing to treat candidates differently. If an employer posts a $40,000 to $60,000 range but consistently hires at $42,000, candidates will question whether the higher end of the range is genuine. This seems likely to push employers toward narrower, more accurate ranges, which reduces their negotiating room.
Organizational Benefits: The Silver Lining
Despite these challenges, forward-thinking employers are discovering that transparency offers organizational benefits worth the initial discomfort. Salary range postings can attract more qualified applicants who self-select based on whether their expectations align with what’s offered. This filtering effect can reduce time wasted on candidates whose salary requirements don’t match the position.
Transparency also builds trust with current employees. Companies that openly share compensation information signal that they have nothing to hide and are committed to fair pay practices. In a competitive labor market where employer reputation matters, this transparency can become a recruiting advantage. Candidates increasingly expect salary information upfront, and companies that provide it demonstrate respect for job seekers’ time and needs.
“If I understand the new Rhode Island law correctly, it requires employers to post salary or wage ranges in job listings,” says Rik Kleinfeldt, president and director of sales at New Harvest Coffee Roasters in Providence. “That’s something we already do at New Harvest, so in practical terms, it hasn’t required any change on our end. … I’m somewhat skeptical that it will have a major impact—positive or negative—on hiring outcomes in our industry. In specialty coffee and hospitality, pay transparency has already been fairly common, and many candidates tend to focus just as much on schedule flexibility, workplace culture, and growth opportunities as they do on the posted wage.”
That said, Rik adds, “Having clearer expectations up front can reduce wasted time for both employers and applicants, which is generally a good thing. As long as the requirements remain straightforward and don’t add unnecessary administrative burden, I don’t see the law as particularly challenging for small businesses like ours.”
Eric of Sweet Bloom agrees. “The benefits of this law have been truly transformative as it allows us to build our teams based on transparency from the outset. Our staff feels more empowered knowing their compensation is fair and benchmarked against clear standards, which boosts morale and retention. This not only supports the well-being of our team but also drives better performance: Happy, secure baristas and roasters mean exceptional coffee experiences for our guests.”
The laws do require employers to conduct regular compensation audits and develop more systematic approaches to pay decisions. While this represents additional work, it should ultimately lead to more rational and defensible compensation structures. Businesses are being prompted to ensure their pay practices can withstand scrutiny, which can reveal and correct inequities that might otherwise persist.
Looking Forward: The Momentum Toward Federal Action
As more jurisdictions see positive wage effects without significant employment disruptions, remaining states could face competitive pressure to adopt similar requirements. Or, once roughly half of the states adopt transparency requirements, the remaining states may quickly follow suit.
A Salary Transparency Act introduced in Congress in 2023 would establish federal-level pay disclosure requirements, though it has not yet passed. The growing state-level adoption creates political momentum for potential federal action, which would eliminate the complex patchwork currently challenging employers and potentially increase compliance rates through standardization.
International developments add further pressure. The European Union’s Pay Transparency Directive requires EU member countries to implement comprehensive transparency measures by June 2026, setting a precedent that may influence American policy discussions.
For both employers and employees, pay transparency represents a fundamental shift in the employment relationship. The 3.6% increase in disclosed salaries demonstrates that transparency delivers real financial benefits to workers, though the path forward requires businesses to fundamentally rethink how they structure and communicate about compensation.
Success in this new environment demands that employers move beyond minimum compliance toward genuine commitment to fair pay practices. Businesses must audit their compensation structures, document their pay decisions carefully, and prepare to explain their salary ranges to both candidates and current employees.
The question is no longer whether to disclose salary information but how to do so in ways that benefit all stakeholders. The businesses that thrive will be those that view transparency not as a burden to be managed but as an opportunity to build more equitable and competitive compensation practices.
This article originally appeared in the February + March 2026 issue of Barista Magazine.
Tracy Allen (he/him) is CEO of Brewed Behavior, a consultancy founded to offer comprehensive support to all segments of the coffee industry. He is a past president of the Specialty Coffee Association of America (SCAA) and was the first chair of the Rules and Regulations Committee for the World Barista Championship (WBC).
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