Pay Transparency Requirements for Small Businesses

Pay transparency laws almost always include an employee-size threshold — a minimum number of workers you must have before the posting requirements apply. These thresholds range from 1 (Colorado, Washington DC) to 50 (Hawaii). Knowing your threshold by state is the first step to understanding whether your company is covered.

Employee threshold by state

How are employees counted?

The counting rules vary by jurisdiction and trip up many employers:

• California (SB 1162): Counts all employees nationally, not just California-based workers. A company with 14 employees in Texas and one in California has 15 employees and is covered.
• New York City (Local Law 32): Counts all employees globally. A company with 4 remote employees anywhere in the world is covered if it posts jobs open to NYC applicants.
• Colorado (EPEWA): Applies to any employer with one or more Colorado employees — even if the employer is headquartered elsewhere.
• Part-time employees: Most laws count part-time employees. Temporary workers placed through a staffing agency generally are not counted, but workers on your own payroll are.
• Independent contractors: Almost universally excluded from employee counts.

What if you are just under the threshold?

Thresholds are snapshots — they can be crossed as you hire. A company at 14 employees that is actively recruiting crosses the 15-employee threshold as soon as a new hire starts in California, Illinois, Washington, or Maryland.

It is worth building salary ranges into your job posting process now, even if you are technically below the threshold. Companies that start early find the workflow change much less disruptive than companies that have to retrofit their entire compensation structure after a fast-growth period.

Exceptions for staffing agencies and third-party recruiters

Most laws require the employer — not the recruiter — to include the salary range, since the employer is the party that controls compensation. However, if you use a staffing agency to post roles on your behalf, you should provide them with the salary range to include. Some staffing agencies have begun requiring this from clients as a condition of posting.

State-by-state compliance for a 20-person company

A hypothetical 20-person company with employees across five states — California, Colorado, New York, Illinois, and Washington — would be covered by every one of those states’ pay transparency laws. For any remote posting open to applicants in all five states, that company would need to include:

• A minimum and maximum salary range (required everywhere)
• A benefits description (required in Colorado and Washington)
• A job description (required in Washington and DC if posting there)

The simplest implementation: include all three elements in every posting by default. The extra effort per posting is minimal, and it eliminates the risk of forgetting the requirements for a specific state.