Top 10 Pay Transparency Actions for Employers in 2025

Pay transparency legislation is picking up even more momentum in 2025.
In Illinois and Minnesota, new laws went into effect on Jan 1. Plus, at least three more states – Massachusetts, New Jersey and Vermont – are gearing up to roll out new pay transparency laws later this year.
So it’s a good time to look at what other companies are doing to comply with evolving legislation on pay equity and salary transparency.
What Is Pay Transparency – and Why Does It Matter?
Generally, pay transparency laws require employers to share info about compensation with applicants and employees. For example, they may require employers to disclose pay ranges in job postings or at some other point during the hiring process.
As you probably know, wage transparency laws are important because they help reduce the pay gap between men and women. And they can also reduce pay inequities by preventing discrimination based on other protected categories, like age and religion.
Top 10 Strategic Pay Transparency Actions Companies Are Taking
What are the best pay transparency practices for employers in 2025? Regular check-ins on compensation packages across the company is a good best practice, according to Jamila S. Mensah, partner at Norton Rose Fulbright.
The good news is, many employers take steps to make sure their employees are paid competitively, according to a recent Pearl Meyer survey. Specifically, in Workplace Policies and Pay Transparency, 301 employers shared the “pay transparency-related actions” their company has taken:
- Market-priced all or a significant number of our jobs (63%)
- Updated our salary structure(s) or market pay ranges (58%)
- Conducted a pay equity analysis (49%)
- Communicated key aspects of our compensation philosophy to all employees (30%)
- Trained managers on having effective compensation discussions (29%)
- Designed or updated our job architecture (29%)
- Conducted a “Comp 101” or similar session with people managers and/or employees (25%)
- Defined career levels and communicated them to employees (24%)
- Updated our compensation philosophy (23%), and
- Informed all employees about any changes (whether driven by legislation or done voluntarily) and how they impact them (18%).
Concerningly, eight percent of respondents said they took none of those actions to address pay transparency at their companies. The question is, why not?
Challenges in Implementing Pay Transparency
Respondents also shared their top challenges associated with pay transparency requirements:
- Managing employee concerns that stem from posted pay ranges for positions they believe are comparable to theirs (36%)
- Ensuring our pay ranges reflect the relative internal relationship among our positions (36%)
- Educating and equipping managers with enough information to be able to explain how pay ranges are determined (35%)
- Ensuring our pay ranges accurately reflect competitive market rates (35%), and
- Managing employee focus on the upper end of the published pay range (29%).
Notably, more than one-third of companies face challenges regarding managing employee concerns about pay and giving managers the info they need to effectively discuss pay with employees. Here’s the reality: If you want to have transparent pay practices, the first step is being able to talk to employees about pay.
Leveraging Technology to Drive Pay Transparency
Luckily, there are plenty of technology options to help employers implement and maintain pay transparency. You may already have some of these tools in your existing tech stack.
Example 1: HRMS Platforms
As you probably know, HRMS platforms streamline HR processes. In this instance, storing all compensation data in one place makes it easier to manage and access salary structures, pay ranges and historical data.
Example 2: Compensation Management Software
Compensation management software is another option. It can simplify pay data, making it easier to organize, analyze and display salary ranges, pay scales and equity data in a structured format.
Example 3: Analytics Software
Analytics software helps HR teams make data-driven decisions by analyzing workforce trends and performance.
In a pay transparency analysis, it can help analyze pay data to spot discrepancies based on gender, race or other factors. Pay equity audits can help employers address potential inequities and promote fair compensation practices.
Business Impact: Why Pay Transparency Is a Win for the Company
There are several business reasons to implement pay transparency practices. Doing so boosts employee engagement and helps attract top talent. It also helps control costs.
HR and finance teaming up on pay transparency makes a lot of sense. Here’s why:
- Balancing fairness and the budget. HR ensures pay is fair and competitive, while finance makes sure it stays within budget. Together, they find the right balance that benefits everyone without overextending financially.
- Staying compliant. With pay transparency laws changing regularly, HR tracks the legal requirements, and finance ensures the numbers line up. Collaboration between the departments helps avoid compliance issues.
- Using data effectively. Finance brings the market data, and then HR can use it to create clear, transparent pay structures. By teaming up, finance and HR can ensure compensation decisions are based on solid, accurate information.
- Reducing turnover. Transparent pay practices help employees feel valued and fairly compensated, which can significantly reduce turnover. HR and finance working together can create a more competitive and attractive compensation strategy, encouraging employees to stay long-term.
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