Nine U.S. states now require employers to post salary ranges in job listings, and the policy does narrow pay gaps between coworkers doing the same job — but a 2024 review in the Journal of Economic Perspectives found it also pushes employers to negotiate harder on starting offers, which can flatten average pay growth for everyone.
What do pay transparency laws actually require?
Colorado's Equal Pay for Equal Work Act is one of the strictest versions on the books, and its own enforcement data shows how seriously the state is treating it. Colorado's Department of Labor and Employment reports 2,907 complaints filed since the law took effect, resulting in 641 voluntary compliance letters and 24 formal citations totaling $841,500 in fines — including a $298,000 penalty against DaVita and $79,500 against Lockheed Martin.
The mechanics are simple: employers must disclose compensation and benefits in every job posting, internal or external, plus give current employees notice of promotion opportunities. Colorado isn't alone — California, Washington, New York and several other states have adopted similar disclosure rules, part of a wider policy shift that, according to the economist Zoë Cullen, has now been adopted in some form by 71% of OECD countries since 2000.
Does posting a salary range actually shrink the wage gap?
Cullen's 2024 paper in the Journal of Economic Perspectives is the most direct answer available, and it's a qualified yes. She separates transparency into three types with different effects. Horizontal transparency — letting coworkers compare pay for the same role — does narrow gaps between them, she found, but it also gives employers leverage: knowing workers can see each other's offers, some firms negotiate more aggressively to hold average pay down.
Vertical transparency — seeing what people above you earn — works differently. Cullen's review points to more accurate, often more optimistic beliefs about earnings potential, which tends to boost motivation rather than resentment. Cross-firm transparency, meanwhile, is the version most job-seekers actually benefit from: seeing what competitors pay for the same role sharpens wage competition between employers and gives workers more leverage to switch jobs for more money.
Why do some workers end up worse off?
The demotivation risk is real, and it's been measured directly. A 2018 study by Cullen and Ricardo Perez-Truglia of UCLA Anderson, published in Harvard Business Review, surveyed 2,060 employees at a large Asian commercial bank and tracked what happened after they learned actual salary figures for people above and beside them.
Learning that a manager earned more than expected made employees work harder — the vertical effect Cullen later confirmed at scale. But learning that a peer earned more for the same job had the opposite result: those employees's effort and performance measurably declined. The lesson isn't that transparency backfires — it's that who you're comparing yourself to matters as much as the number itself.
Is discussing your salary with coworkers actually legal?
Separately from any state posting law, federal law already protects the conversation. The National Labor Relations Act gives most private-sector employees the right to discuss wages with coworkers, unions, the media or the public — in person, by phone or in writing, including during work hours if other personal talk is allowed. The National Labor Relations Board is explicit that employers cannot ban these conversations, retaliate against workers who have them, or require permission first; doing so is grounds for an unfair-labor-practice charge.
That protection predates the current wave of state salary-range laws and applies whether or not your state has one. It's the legal floor underneath all of this: even where a posted range tells you little, your right to ask a coworker what they make isn't up for negotiation.
What should you actually do with a posted salary range?
Treat the number as a starting point, not a verdict. A wide range on a job posting often reflects genuine variation by experience or location rather than an attempt to mislead — but Colorado's citation record shows real employers do get the disclosure requirements wrong, sometimes expensively. If a range looks unusually vague or the actual offer lands far outside it, that's worth naming out loud in the negotiation, not treating as awkward.
Practically, the cross-firm effect Cullen describes is the one job-seekers can act on directly: because a posted range lets you compare one employer's offer against a competitor's for the same role, it's leverage you didn't have before these laws existed. Bring a competing range into a negotiation and you're using the exact mechanism the research says moves employers — not just asking nicely.
None of this is legal or financial advice — Colorado's law, like those in other states, comes with its own filing deadlines and exceptions, and an employee with a specific dispute should talk to the relevant state labor agency or an employment attorney rather than rely on a general explainer.
For a related workplace perspective, read Pay transparency laws aren't closing the wage gap. They're raising wages..