What You Don’t Know About Pay Transparency Can Cost You

A few weeks ago, I was talking with a business owner friend who was frustrated by what seemed like another ever-growing HR requirement. “Why does it matter if I put a pay range on a job posting?” they asked. “If someone applies, we’ll discuss compensation during the interview.” It’s a fair question.

For years, that was normal. Employers often posted jobs without compensation information and discussed pay later in the hiring process. Today, in many states, that same approach can create legal exposure, penalties, applicant claims, and even class action risk. And that is exactly why I keep coming back to one of my favorite HR lessons:

You don’t know what you don’t know.

The Hidden Risk in Job Postings

Most employers do not intentionally violate pay transparency laws. In fact, many employers become non-compliant for very understandable reasons:

• They use an old job description template.

• A manager independently posts a job online.

• A third-party recruiter publishes an opening.

• A remote position is posted nationally.

• An applicant tracking system pushes the same posting to multiple states.

• The company does not realize a state law has changed.

No one intended to do anything wrong, but the problem is that intent often does not matter. What matters is whether the posting complies and increasingly, applicants and employees are paying attention.

Example One: Washington and Applicant Lawsuits

Washington has become one of the clearest examples of how quickly a missing pay range can become a lawsuit.

Washington’s Equal Pay and Opportunities Act requires covered employers to include the wage scale or salary range, along with a general description of benefits and other compensation, in job postings. Recent litigation has focused on what happens when employers fail to include that information.

In Branson v. Washington Fine Wine & Spirits, LLC, applicants filed a class action after job postings did not include required wage and benefits information. The employer argued that only “bona fide” or good-faith applicants should be able to bring claims under the statute.

The Washington Supreme Court disagreed. On September 4, 2025, the court held that a “job applicant” under the statute is a person who applies to a specific job posting, regardless of whether they had a genuine interest in the position or applied in good faith.

Think about that for a moment- the issue was not discrimination, it was not unpaid wages, it was not wrongful termination -it was missing information in a job posting.

Yet that missing information created class action exposure. Washington employment law commentators have also noted that hundreds of pay transparency class action lawsuits were filed after the state’s job posting requirements took effect.

That is a textbook “you don’t know what you don’t know” moment.

Example Two: Colorado and the Compliance Trendsetter

Colorado was one of the first states to push pay transparency into job postings in a meaningful way. Colorado’s Equal Pay for Equal Work Act requires employers to disclose compensation in job postings, including pay ranges, benefits, and information about how and when to apply. Colorado’s requirements caught many employers off guard because the law applied broadly, including to employers with at least one employee in Colorado and to positions that could be performed in Colorado.

Some employers tried to work around the rules by excluding Colorado applicants from remote job postings. Others discovered that their internal job posting process, third-party recruiting practices, or applicant tracking systems were not set up to include all required compensation information.

Again, in many situations, employers were not trying to hide pay- they were operating under old assumptions.

Colorado’s law became a model for other states and helped shift pay transparency from a “best practice” to a compliance requirement. For multi-state employers, it also showed how one remote job posting can trigger obligations in a state where the company may not have a large physical presence.

Example Three: California and the Expanding Pay Transparency Standard

California is another important example, especially for employers with multi-state operations or remote employees. Effective January 1, 2023, California expanded its pay transparency requirements under Labor Code Section 432.3. Employers with 15 or more employees must include the pay scale for a position in any job posting. Employers who use a third party to post jobs must also provide the pay scale to that third party, and the third party must include it in the posting.

California defines “pay scale” as the salary or hourly wage range the employer reasonably expects to pay for the position. Guidance has also clarified that the pay scale must be included in the job posting itself, not simply linked elsewhere through a QR code or external link.

California’s law also gives applicants and employees enforcement rights. A person who claims they are aggrieved by a violation may file a complaint with the Labor Commissioner, and may also bring a civil action for injunctive relief and any other relief the court deems appropriate. Civil penalties can range from $100 to $10,000 per violation, although a first violation related to missing pay scales may avoid a penalty if the employer updates all open postings to include the required pay scale.

For employers, California adds another layer of risk because job posting compliance does not exist in isolation. Pay ranges can create questions about internal equity, exempt classification, compensation structure, recordkeeping, and whether employees in the same or substantially similar roles are being paid consistently.

One Missing Range Can Open a Bigger Review

The conversation with my friend quickly moved from “Should we add pay ranges?” to a much broader compliance discussion. Once an applicant, employee, attorney, or agency starts reviewing recruiting practices, other questions often follow:

• Are job descriptions accurate and current?

• Are exempt and nonexempt classifications documented correctly?

• Are pay ranges supported by actual compensation data?

• Are employees performing duties consistent with their job descriptions?

• Are internal employees being paid within posted ranges?

• Are remote roles triggering requirements in multiple states?

• Are third-party recruiters following the company’s compliance standards?

• Are managers creating postings outside the approved HR process?

• Are promotion opportunities posted or communicated correctly where required?

• Are wage records and job description records being maintained?

The original issue may be a missing pay range but that is rarely where the review ends.

Why Employers Miss This

This is where proactive HR becomes so important. Many employers assume their systems will catch these issues. They rely on:

• Applicant tracking systems

• HRIS platforms

• Recruiting software

• Job boards

• Third-party recruiters

• Old job description templates

But technology only does what it is designed and instructed to do.

An applicant tracking system may successfully post a job in multiple states. It may not tell you that Washington requires wage and benefit information, Colorado requires detailed posting and opportunity information, or California requires the pay scale to be included directly in the posting.

Technology can automate a process, but it cannot replace compliance oversight.

The Real Cost of Doing Nothing

Updating job descriptions and pay ranges may feel like one more administrative project but the cost of not doing it can be much higher. A non-compliant job posting can lead to:

• Applicant claims

• Agency complaints

• Civil penalties

• Class action exposure

• Attorney fees

• Public scrutiny

• Internal pay equity questions

• Employee relations concerns

• Compensation structure reviews

And perhaps most importantly, it can create risk for employers who genuinely thought they were doing things correctly and that is the part I see most often.

Good businesses. Good people. Outdated processes.

A Better Approach: Proactive HR

Pay transparency compliance is manageable when employers approach it proactively.

A practical review should include:

1. Audit Every Job Posting Template

Make sure every job posting template includes space for the required pay range, benefits language, application deadlines, or other state-specific disclosures.

2. Review Multi-State Requirements

Pay transparency laws vary significantly by state. A posting that works in one state may be incomplete in another.

3. Update Job Descriptions

Job descriptions should accurately reflect job duties, classification status, reporting relationships, physical requirements, and compensation structure.

4. Document Pay Ranges

Employers should be able to explain how each pay range was created and why it is reasonable for the role.

5. Train Hiring Managers

Many compliance problems begin when a manager creates a posting without using approved language or HR review.

6. Review Third-Party Recruiters

If a recruiter, job board, or staffing partner posts on your behalf, confirm they are including the required pay information.

7. Connect Recruiting to Compensation Strategy

Pay transparency is not just a posting requirement. It should align with internal equity, promotion practices, compensation philosophy, and employee communication.

The Real Lesson

My friend’s original question was simple: “Why does this matter?”

The answer is that pay transparency is no longer just a recruiting trend. It is an active compliance requirement, and in some states, it is already creating litigation risk.

Most employers are not intentionally hiding pay, they are simply operating under yesterday’s rules and that is where risk lives. Risk is not only in what you deliberately choose to ignore, but in the law that changed, the posting template that never got updated, the remote job that triggered another state’s requirements, or the third-party recruiter who did not know what needed to be included.

Because in HR, the most expensive compliance problems are often not the things you knew about- they are the things you never knew to ask.

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At Evergreen Solutions, we help employers identify these hidden risks before an applicant, attorney, auditor, or agency does. Because proactive HR is always less expensive than reactive HR.