Pay transparency basics for employers: what to know before you post a job

What pay transparency means for a job posting

This page covers pay transparency basics for employers who post jobs, run recruiting teams or approve offers. In plain terms, pay transparency is about the pay information you share with candidates: the rate or range in the job post, what you say in screening messages and what lands in the offer letter. Some of that is driven by law. Some is good practice. All of it needs to match.

Two questions sit underneath every pay figure you publish. First, is the pay itself lawful for the role and location? Second, do the rules where the job is based say anything about what the posting must disclose? The federal wage baseline answers part of the first question. The second depends on the state and local rules that apply to the job.

The federal baseline: what you must pay

The Fair Labor Standards Act (FLSA) is the federal law behind minimum wage, overtime pay, recordkeeping and youth employment standards. It covers employees in the private sector and in federal, state and local government. The Department of Labor's FLSA overview is about what you must pay and record, not about what a job post must say. Even so, it shapes every pay figure you publish.

• Minimum wage: there is a federal floor, and many states set their own. Where an employee is covered by both, the employee is entitled to the higher rate. A posted rate needs to clear the higher one.
• Overtime: covered nonexempt employees must receive overtime pay for hours over the weekly threshold. If the post mentions hours or overtime, it should reflect the role's actual classification.
• Tipped roles: the FLSA lets employers who meet certain criteria take a partial credit against minimum wage for tipped employees. Posting a tipped wage needs extra care so candidates understand what they will earn.
• Records: employers must display the official FLSA poster and keep employee time and pay records.

The DOL also publishes a Coverage and Employment Status Advisor to help identify which workers are employees covered by the FLSA. If you're unsure whether a role is an employee position at all, sort that out before you write the ad.

State and local variation

The federal baseline is not the whole picture. Wage floors differ by state, and pay disclosure rules, where they exist, are set by the jurisdiction that adopts them. Two jobs with the same title can need different postings depending on where the work happens.

For each role, answer these before you publish:

• Where will the person actually work: a specific site, several locations, or remote?
• Which state and local wage rules apply to that location?
• Do the rules for that location say anything about including pay in a posting, sharing pay on request or describing benefits?
• Who on your team owns keeping track of these rules as they change?

For location-specific detail, see the overviews of hiring compliance rules in California and hiring compliance rules in New Jersey. For multi-location employers, build a simple location-by-location reference and review it on a set schedule.

A posting workflow that holds up

Most pay problems in hiring are workflow problems. The number was right in one place and wrong in another, or nobody checked it at all. A short, repeatable sequence fixes most of that.

1. 1 Confirm the work location Record the site, region or remote arrangement for the role. Everything else depends on it.
2. 2 Confirm classification Decide whether the role is exempt or nonexempt and whether it is tipped. Get sign-off from whoever owns payroll or HR policy.
3. 3 Check the pay against the wage floor Compare the planned rate or range to the federal minimum and the applicable state minimum. Use the higher one as your floor.
4. 4 Check location disclosure rules Look up what the rules for that location require in a posting. Note what must be included and how it should be described.
5. 5 Write one approved pay statement Draft the pay line once, get it approved and reuse it word for word on every board, careers page and recruiter message.
6. 6 Carry it through to the offer Make sure screening messages and the offer letter match the approved pay statement, and that payroll records match once the hire starts.

Role title: ____
Work location (site / region / remote): ____
Classification: exempt / nonexempt; tipped: yes / no
Applicable wage floor checked: federal and state (higher used) ____
Location disclosure rules checked: yes / no; source: ____
Approved pay line for the post: ____
Benefits or other pay elements to mention: ____
Approved by / date: ____
Next review date: ____

Common mistakes

• Posting a rate that clears the federal minimum but not the state minimum for the work location.
• Describing a role as having no overtime without confirming its classification.
• Listing a tipped wage without explaining how base pay and tips work.
• Reposting an old ad with outdated pay after rates change.
• Letting recruiters quote pay in texts or emails that differs from the posted figure.
• Writing offer letters that don't match the posted pay, with no explanation.
• Assuming one location's rules cover a remote or multi-site role.

Where your ATS fits

Software does not decide what the law requires. It can make it easier to stay consistent once you have decided. ATS Mako includes an integrated email client and native SMS, so candidate conversations sit next to the job record and a recruiter can check what was said about pay. The communication engine and automated SMS workflows help you send the same approved wording every time. When it is time to hire, offer letters with e-signature keep the final terms in the same system as the posting.

Pay is only one part of a compliant hiring process. If you run background checks, read the FCRA background check basics as well.