Pay transparency is quickly becoming the new standard in the workplace. Across the U.S., states are passing laws that require employers to share salary ranges, prevent retaliation for pay discussions, and close wage gaps. Now, Pennsylvania employers should prepare for similar requirements.

Even though a statewide law isn’t yet in effect, the proposed Pennsylvania Pay Transparency Act (HB 560) signals major changes ahead. Acting now will help your organization stay compliant, competitive, and trusted by employees.

The Pennsylvania Pay Transparency Law: What’s Coming

Under HB 560, employers with 15 or more employees would be required to:

Disclose pay ranges (or a minimum salary) for new job openings, promotions, and transfers.
Notify employees annually of their position’s pay range in writing.
Maintain equity across “substantially similar” jobs, ensuring pay is based on skill, effort, and responsibility.
Allow open pay discussions—employers may not prohibit or retaliate against employees who share pay information.

These requirements introduce several critical new concepts for employers. The mandate to maintain equity across “substantially similar” jobs is especially significant. This term, common in pay equity legislation, goes far beyond “job title.” An analysis of “substantially similar” work involves a deep look at the actual duties performed, the level of skill (including experience, training, and education), the degree of effort (physical or mental), and the scope of responsibility (including supervisory duties and impact on business outcomes). This means a “Project Manager” in engineering and a “Program Coordinator” in marketing could be deemed “substantially similar” if their core functions align, even if they are in different departments with different titles.

The anti-retaliation provision is also broad. It protects an employee’s right to inquire about their own pay, and to discuss or disclose their compensation with colleagues. Retaliation is not just firing; it can include demotion, denial of a promotion, an uncharacteristically poor performance review, or being reassigned to a less desirable shift or territory after engaging in protected pay discussions.

Building on Local Precedent

Philadelphia’s Wage Equity Ordinance already restricts employers from asking about prior salary, showing that transparency expectations are already growing in Pennsylvania. This trend is not limited to Philadelphia. Allegheny County (which includes Pittsburgh) enacted its own salary history ban in 2021. This ordinance also makes it illegal for employers to inquire about a candidate’s prior compensation.

The proliferation of these local ordinances signals a clear and growing consensus among Pennsylvania’s key economic centers. Both salary history bans and pay range disclosures are seen as two sides of the same coin: both are mechanisms designed to break the cycle of historic pay discrimination, where past, potentially biased, salaries dictate future earning potential. A statewide law like HB 560 is the logical next step in this progression.

How Pennsylvania Employers Can Prepare for Pay Transparency

Getting ready now can save time, reduce risk, and strengthen employee trust. Here’s how your organization can proactively prepare:

1. Conduct a Pay Equity Audit

A pay equity audit is a statistical analysis of your compensation data to identify pay disparities between employees in protected classes (e.g., based on gender, race, ethnicity) who perform “substantially similar” work. This isn’t just looking at a spreadsheet; it often involves regression analysis to “control” for legitimate, non-discriminatory factors that explain pay differences, such as tenure, geographic location, relevant experience, or documented performance metrics. The goal is to isolate any remaining pay gaps that cannot be explained by these factors, as these represent your highest areas of legal risk. Once identified, you must work with leadership and legal counsel to create a clear plan to remediate these gaps.

2. Establish Clear Compensation Ranges

“Market research” is the first step. This means purchasing or accessing reliable, up-to-date salary survey data for your industry and geographic locations. You must then define your company’s “compensation philosophy.” Do you aim to pay at the 50th percentile of the market (a “market-matching” strategy) or the 75th (a “market-leading” strategy)? Once your philosophy is set, you can build “pay bands” or “ranges” for each role or job family. These ranges must have clearly defined minimums, midpoints, and maximums. This structure provides the framework for all pay decisions and ensures that pay is tied to the role, not just to a manager’s discretion or an applicant’s negotiation skill.

3. Update Job Descriptions and Postings

This step is the non-negotiable foundation for your pay equity audit. Your job descriptions are your primary evidence for defining what is (and is not) “substantially similar” work. If your job descriptions are outdated, inaccurate, or focused on the “person” rather than the “role,” your entire audit will be flawed. Review every job description to ensure it accurately reflects the core duties, required skills, effort, responsibilities, and working conditions of the position. This process helps you standardize job titles and levels, making it possible to group jobs for your compensation analysis.

4. Train Managers and HR Teams

Your managers will be on the front lines of this new transparency. They will be the first to receive questions from their direct reports, and they must be prepared to answer them correctly and consistently. Training should focus on:

How to explain the new pay ranges: What do the minimum, midpoint, and maximum mean?
How to answer tough questions: “Why am I paid less than the midpoint?” or “I’m at the maximum for my range. Does this mean I can never get another raise?”
How to discuss career paths: Shifting the conversation from “Why don’t I make what Bob makes?” to “What skills and performance do I need to demonstrate to move to the next level in my pay band or be promoted to the next band?”

5. Communicate with Employees

You must control the narrative. Simply posting ranges without context will create confusion and mistrust. Develop a comprehensive communication plan that clearly explains your compensation philosophy before the ranges are rolled out. Explain how pay decisions are made, what market data you use, and how the new pay bands work. This transparency is the entire point. It builds trust by showing employees the “why” behind their pay, demystifying the process and demonstrating a commitment to fairness.

6. Review and Update Company Policies

Finally, your internal policies must reflect the new legal reality. Scour your employee handbook, offer letters, and any internal wikis for “pay secrecy” policies—rules that prohibit or discourage employees from discussing their salaries. These policies are illegal under the National Labor Relations Act and are explicitly banned by HB 560. You must also create a formal, clear procedure for employees to request their pay range or report pay equity concerns, as required by the law. This ensures compliance and provides a structured internal channel for resolving disputes.

Why Pay Transparency Matters for Pennsylvania Employers

Embracing pay transparency isn’t just about legal compliance—it’s a strategic advantage. Companies that are open about compensation often see:

Stronger employee engagement and retention
When pay is a “black box,” employees tend to assume the worst—that they are being underpaid or that pay is based on favoritism. Transparency demystifies compensation, directly linking an employee’s pay to their role, skill, and impact. This sense of fairness and clarity is a powerful driver of trust and engagement, reducing the likelihood of top performers leaving for a competitor they assume will pay more.
Improved recruitment outcomes in a competitive job market
In today’s talent market, job postings without salary ranges are increasingly ignored. Candidates are screening employers for transparency just as employers screen them for skills. By providing a clear, competitive range upfront, you attract a more qualified pool of applicants, shorten the time-to-hire by setting clear expectations, and avoid a negotiation process where both sides are guessing.
Reduced pay equity risks and discrimination claims
The proactive pay equity audit we discussed is your single best defense against discrimination claims. It allows you to find and fix indefensible pay gaps before they become a lawsuit or a front-page reputational crisis. This process moves your organization from a reactive legal posture to a proactive one, addressing systemic issues on your own terms.
Enhanced employer reputation and trust
In an age of instant-review sites like Glassdoor and social media, your internal pay practices are already part of your external employer brand. By embracing transparency, you position your organization as a leader in fairness and accountability. This reputation becomes a competitive advantage, making you an “employer of choice” for top talent that values a modern, equitable workplace./li>

Take Action Now

The Pennsylvania Pay Transparency Act is part of a national trend toward openness and equity in compensation. Employers who prepare today will have a smoother transition when the law takes effect—and gain an edge in attracting and retaining top talent.

Abel Personnel helps Pennsylvania employers navigate HR compliance, compensation audits, and pay equity strategies. Contact us today to ensure your organization is ready for pay transparency and future state requirements.

Sources:

Jasie Garlin

Jasie Garlin, CSP is the Director of Operations at Abel Personnel, Inc. with over 12 years of experience in the staffing and recruitment industry. Throughout her career she has helped to streamline processes, improve efficiency, and deliver exceptional talent solutions to clients. With a deep understanding of the staffing lifecycle and a passion for developing innovative operational strategies, she is dedicated to driving growth and fostering a high-performance culture. Jasie enjoys mentoring emerging talent and staying ahead of industry trends.

Preparing for Pay Transparency: What Pennsylvania Employers Need to Know