How Pay Transparency Laws Impact Your Independent Insurance Agency  

• September 10, 2025

By Nicholas Ritchie

Pay transparency is no longer a trend; it’s a reality. Across the U.S., many state-level laws and local ordinances are being enacted to increase transparency in salary negotiations and in the overall hiring process.

Pay transparency is the practice of openly sharing compensation and benefits information with candidates in the hiring process. The goal is to promote wage equity and trust. Each state’s pay transparency legislation varies in scope and requirements, particularly regarding salary and benefits disclosures in job postings.

While pay transparency supports the broader goal of pay equity, the two are different. Pay equity focuses on ensuring employees are paid fairly and consistently for equal work, regardless of gender, race or other protected characteristics. Transparency aims to help achieve equity by reducing the reliance on prior salary history in compensation negotiations, instead focusing on role-based compensation. 

State Laws and Local Ordinances

State laws and local ordinances set the standard for what and how much information you must include in your external and internal job postings. Just this year, five states have added new text and regulations relating to pay transparency requirements. On a local level, many large cities and industrial centers have additional requirements—New York City, Jersey City and Cleveland are just a few examples.

The management and execution of these changes, especially in areas where both state and local requirements are in effect, can be challenging. Even more complex are remote or hybrid roles and territory-based positions where an employee will be based outside of the organization’s home state.

Each state and locality is unique in both the information required and the timeline for disseminating that information to candidates and employees. For example, Washington, D.C., requires all employers, including those with remote roles, to disclose all relevant compensation and benefits information to the candidate before an interview takes place, regardless of the company’s size.

On the other hand, Vermont requires compensation and benefits information only upon a conditional offer, and it does not apply to remote roles.

With all the minutiae of each state’s requirements, one commonality remains: the pay history ban. As best practice, you should never ask an employee about their previous pay history, regardless of location and applicable legislation. Any explicit question related to a candidate’s or employee’s prior compensation is not acceptable. It can both diminish trust and, in severe cases, lead to legal exposure, as it may reinforce existing pay disparities and violate laws aimed at promoting pay transparency. 

Remote and Territory-Based Roles

Managing pay transparency requirements becomes increasingly complex when companies employ remote workers or territory-based employees. Legislation varies widely, particularly in how it addresses these remote roles and positions based outside of a company’s home state.

Take, for example, a company headquartered in New York, with traveling sales representatives based in Illinois. The company must comply with both states’ pay transparency laws. New York legislation applies to remote roles, meaning that any job that can be performed in the state is subject to these requirements. Additionally, if the role is or can be performed in Illinois, regardless of the company’s home state, Illinois regulations also apply.

The primary challenge in complying with these multi-state requirements lies in the legislative gray areas. Many state-level laws lack explicit coverage of remote roles, territory-based employees and the definition of an actual “job posting.” Questions arise about what qualifies as a job posting, whether internal promotions are subject to the same requirements, and how salary and benefits information must be communicated.

The technicalities of these laws can be challenging to interpret and to apply consistently, particularly for organizations operating across multiple states or jurisdictions. As the push for increased pay transparency continues, legislation will likely become more standardized and explicit, helping employers navigate the requirements with consistency and confidence. 

Common Misconceptions About Pay Transparency

Here are a few of the most common misunderstandings about pay transparency and what they mean for your agency:

1) Pay transparency means full disclosure. Pay transparency is not the same as full disclosure. One of the most common misconceptions is that pay transparency requires a disclosure of each employee’s exact salary. This level of detail is not required, as most states with active legislation require only a salary range, benefits information and an application deadline on job postings. 

2) Pay transparency makes salary negotiations harder for the employer. In reality, pay transparency can help to frame negotiations rather than restrict them. Candidates and employees can enter discussions with a clearer understanding of expectations.

As an employer, you can still negotiate within the listed range, accounting for factors like location, job responsibilities, experience and internal equity. If you find during the hiring process that you need to offer a higher salary to attract qualified candidates, then you can adjust your pay range accordingly.  

3) Pay transparency will lead to conflict and discontent among employees. It’s understandable to think that increased transparency around compensation and related decisions may cause internal tension among employees. But hiding compensation information doesn’t limit dissatisfaction; it creates room for assumptions and suspicion. Plus, the current law already allows employees to discuss their wages without reprisal.

A transparent compensation framework can help employees understand the “why” behind compensation decisions, enabling them to understand individual differences better. 

4) Pay transparency is just a compliance issue. Pay transparency is not just a legal checkbox. While pay transparency begins with compliance, the legislation intends to foster greater fairness and accountability for all parties involved. Transparent compensation and hiring practices can build organizational credibility and reputation, helping to create a competitive advantage in the hiring and retention areas. 

Navigate Pay Transparency in Your Insurance Agency

Here are four tips to incorporate pay transparency best practices with confidence:

1) Avoid prior pay history questions. Regardless of local or state laws, it is best practice to avoid questions related to a candidate’s compensation history to ensure future compensation is based on the role’s worth to the company.  

2) Document salary and benefits. Prepare standardized compensation materials for external job postings and internal use. 

3) Audit current compensation practices. Ensure all roles have defined salary ranges that align with both internal pay equity and market benchmarks. 

4) Train your hiring teams. Educate recruiters and managers on how to communicate salary expectations and legal boundaries, including what not to ask. 

Nicholas Ritchie is recruiting coordinator at The Workplace Advisors. The Workplace Advisors is the endorsed HR partner of Big “I” Hires, the Independent Insurance Agents of Virginia, Big I New York, and Big I New Jersey.

The Workplace Advisors offers a wide range of services to help organizations approach pay transparency, including assessing current job postings for compliance, developing new job postings and reviewing overall compensation practices.