5 Ways Pay Transparency Laws Impact the Staffing Industry and How to Support your Clients

An increasing number of states have already enacted pay transparency laws, (including Illinois and Minnesota effective January 2025) with draft bills under review in several other States.

These laws require employers to disclose salary ranges in job postings and during the hiring process. While the intention is to promote fair pay and reduce wage gaps, there are ripple effects for staffing agencies and their clients.  If you’re hiring for either in-person OR for remote roles that could be based in States with Pay Transparency Laws, here’s what you need to know!

1. Job Postings Must Include Salary Ranges

Having to include a pay range in a job ad can make the posting more competitive, but it can also expose less desirable pay.

How to support your client:

• Have a discussion with your client about the law’s requirement in their state.
• Use market data to help them set competitive and realistic pay ranges. You may find data from a variety of sources including the American Staffing Association, Bureau of Labor Statistics, Salary.com, or TalentNeuron. 
• Highlight other benefits such as flexible work or growth opportunities to attract candidates when the pay is low-mid range. 

2. Potential for Internal Pay Equity Issues

Current employees may discover disparities with colleagues doing similar work which can impact morale and turnover.

How to support your client:

• Suggest your client perform pay audits to identify and adjust internal inequities.
• Assist with the framework for transparent communication with employees regarding pay structures.
• Offer benchmarking tools or salary data to ensure pay rates are consistent and fair. 

3. Greater Competition for Top Talent

Pay transparency makes it easier for job seekers to compare salaries and offers. This may increase competition among employers, especially for in-demand roles.

How to support your client: 

• Suggest your clients have a well-defined and succinct interview process.
• Encourage clients to move quickly when making offers to avoid losing candidates (give them a specific timeline).
• Recommend total packages such as bonus opportunities and a promotional path that stand out beyond wages.

4. Increased Candidate Salary Negotiations

When salary ranges are visible, candidates will often expect or push for top-of-range offers, even if their skills and experience align closer to the lower end.

How to support your client:

• Use pre-screening conversations to assess flexibility and priorities beyond pay.
• Help set clear expectations with candidates early in the process.
• Provide clients with interview tips on handling salary discussions. 

5. Administrative and Compliance Burden

Clients may struggle to keep up with changing legislation and compliance requirements; especially if they are expanding their business into multiple states.

How to support your client:

• Provide a compliance checklist (with a disclaimer) for clients hiring in multiple states.
• Pass along resources or referrals for HR / Legal partners who can assist your client.
• Offer payrolling or additional services to reduce their workload. 

Pay transparency laws are here to stay and are already expanding into more states. Staffing agencies that position themselves as compliance-aware, workforce experts will not only protect their clients but also better serve their candidates.

For additional resources including pay transparency laws by state, click here.