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In the United States, the principle of fair pay is a cornerstone of federal and state law. Every worker has a right to be compensated fairly for their labor and to receive that compensation without discrimination.
These rights are enshrined in a series of landmark laws designed to ensure a basic standard of living, promote fair competition among businesses, and protect employees from bias based on who they are.
This guide provides an overview of your rights to fair and equal pay, explaining key laws that protect you, how to identify potential violations, and the concrete steps you can take to ensure you are being paid what you are owed.
The Foundations of Fair Pay: The Fair Labor Standards Act
The bedrock of wage protection for nearly all workers in the United States is the Fair Labor Standards Act (FLSA). This is not simply a set of rules but a foundational piece of national economic policy.
The law functions as an economic stabilizer, preventing a “race to the bottom” where businesses might compete by driving down labor standards. By establishing a baseline for wages and hours, the FLSA ensures that competition is based on the quality of goods and services, not on the exploitation of labor.
What is the FLSA?
The Fair Labor Standards Act of 1938 was enacted by Congress during the Great Depression to address and correct “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.”
Its passage marked a significant expansion of federal oversight into the workplace with the goal of creating a more stable and just economy.
The FLSA’s core protections establish federal standards for four key areas affecting employees in both the private sector and government:
Minimum Wage: Sets a national floor for hourly pay.
Overtime Pay: Requires premium pay for hours worked beyond a standard workweek.
Recordkeeping: Mandates that employers keep accurate records of employee hours and wages.
Youth Employment: Establishes standards to protect minors from oppressive child labor.
These protections apply to most employees in the private sector and in Federal, State, and local governments. The law defines an “employee” broadly as any individual employed by an employer, and an “employer” as any person or entity acting in the interest of an employer in relation to an employee.
Your Right to Minimum Wage
The most well-known provision of the FLSA is the establishment of a federal minimum wage. This rate acts as a national baseline, ensuring a minimum level of compensation for millions of workers.
What is the current federal minimum wage?
The current federal minimum wage is $7.25 per hour. This rate has been in effect since July 24, 2009, and applies to all covered, nonexempt employees. A “nonexempt” employee is one who is covered by the FLSA’s minimum wage and overtime provisions.
The Federal Floor vs. The State Ceiling
A critical concept for every worker to understand is the relationship between federal and state law. The federal minimum wage acts as a “floor,” not a “ceiling.”
Many states, and even some cities and counties, have enacted their own minimum wage laws. In any situation where an employee is covered by both a federal and a state or local minimum wage law, the employee is entitled to the higher of the two rates.
This principle ensures that state and local governments can provide greater protections for their workers than the federal baseline.
State-by-State Minimum Wages
As of January 1, 2025, a significant majority of states have minimum wage rates higher than the federal standard. The following table provides a comprehensive overview of state minimum wage laws across the country.
| State/Territory | State Minimum Wage (as of Jan. 1, 2025) | Notes |
|---|---|---|
| Alabama | No State Minimum Wage | Federal rate of $7.25 applies. |
| Alaska | $11.91 | |
| American Samoa | Special Minimum Wage Rates | Rates vary by industry. |
| Arizona | $14.70 | |
| Arkansas | $11.00 | |
| California | $16.50 | Higher rates in certain cities/counties and for specific industries. |
| Colorado | $14.81 | |
| Connecticut | $16.35 | |
| Delaware | $15.00 | |
| District of Columbia | $17.50 | |
| Florida | $13.00 | |
| Georgia | $5.15 | Federal rate of $7.25 applies to most employees. |
| Guam | $9.25 | |
| Hawaii | $14.00 | |
| Idaho | $7.25 | |
| Illinois | $15.00 | |
| Indiana | $7.25 | |
| Iowa | $7.25 | |
| Kansas | $7.25 | |
| Kentucky | $7.25 | |
| Louisiana | No State Minimum Wage | Federal rate of $7.25 applies. |
| Maine | $14.65 | |
| Maryland | $15.00 | |
| Massachusetts | $15.00 | |
| Michigan | $10.56 | Scheduled to increase to $12.48 on Feb. 21, 2025. |
| Minnesota | $11.13 | |
| Mississippi | No State Minimum Wage | Federal rate of $7.25 applies. |
| Missouri | $13.75 | |
| Montana | $10.55 | $4.00 for businesses not covered by FLSA with gross sales of $110,000 or less. |
| Nebraska | $13.50 | |
| Nevada | $12.00 | |
| New Hampshire | $7.25 | |
| New Jersey | $15.49 | $14.53 for seasonal employees and employers with fewer than 6 people. |
| New Mexico | $12.00 | |
| New York | $16.50 or $15.50 | $16.50 in NYC and certain counties; $15.50 in the rest of the state. |
| North Carolina | $7.25 | |
| North Dakota | $7.25 | |
| CNMI | $7.25 | |
| Ohio | $10.70 | $7.25 for employers with annual gross receipts under $394,000. |
| Oklahoma | $7.25 | |
| Oregon | $15.95, $14.70, or $13.70 | Rate varies by region (Portland metro, standard, nonurban counties). |
| Pennsylvania | $7.25 | |
| Puerto Rico | $10.50 | |
| Rhode Island | $15.00 | |
| South Carolina | No State Minimum Wage | Federal rate of $7.25 applies. |
| South Dakota | $11.50 | |
| Tennessee | No State Minimum Wage | Federal rate of $7.25 applies. |
| Texas | $7.25 | |
| Utah | $7.25 | |
| Vermont | $14.01 | |
| Virginia | $12.41 | |
| Virgin Islands | $10.50 | |
| Washington | $16.66 | |
| West Virginia | $8.75 | |
| Wisconsin | $7.25 | |
| Wyoming | $5.15 | Federal rate of $7.25 applies to most employees. |
Source: U.S. Department of Labor
Are there exceptions to the minimum wage?
The FLSA contains a few narrow exceptions that allow employers to pay certain workers less than the full federal minimum wage under specific, highly regulated circumstances.
Tipped Employees: An employer of a “tipped employee”—someone who customarily and regularly receives more than $30 a month in tips—may pay a direct cash wage of not less than $2.13 an hour.
However, this is only permissible if the employee’s tips combined with the direct cash wage equal at least the federal minimum wage of $7.25 per hour. If the total does not meet the minimum wage, the employer is required to make up the difference.
Additionally, the employee must be allowed to retain all tips, though tip pooling among employees who customarily receive tips is permitted.
Young Workers: Under the Youth Minimum Wage program, employers may pay employees under the age of 20 a wage of $4.25 per hour for their first 90 consecutive calendar days of employment.
This lower wage cannot be used to displace other workers. Once the employee reaches 90 days of employment or turns 20, whichever comes first, they must be paid the full federal minimum wage.
Full-Time Students and Student-Learners: The Department of Labor issues special certificates that allow certain employers (such as retail or service stores, agricultural operations, and universities) to pay full-time students at a rate of not less than 85% of the minimum wage.
Similarly, high school students at least 16 years old enrolled in vocational education programs (“student-learners”) may be paid not less than 75% of the minimum wage under a special certificate. These programs have strict limitations on hours worked and are designed to prevent the displacement of other workers.
Your Right to Overtime Pay
The FLSA also ensures that most workers are compensated for working long hours by mandating premium pay for overtime.
When am I entitled to overtime pay?
For covered, nonexempt employees, the FLSA requires overtime pay for any hours worked over 40 in a workweek. A workweek is defined as a fixed and regularly recurring period of 168 hours—seven consecutive 24-hour periods.
It can start on any day of the week and at any hour. Importantly, each workweek stands alone; employers are not permitted to average an employee’s hours over two or more weeks to avoid paying overtime.
How is overtime calculated?
Overtime pay must be calculated at a rate of not less than one and one-half times an employee’s regular rate of pay. Understanding the “regular rate of pay” is crucial, as it is not always the same as an employee’s stated hourly wage.
Defining the “Regular Rate of Pay”: The regular rate is the average hourly rate calculated by dividing an employee’s total compensation for a workweek by the total number of hours actually worked in that week.
This total compensation must include all remuneration for employment, such as hourly wages, salary, piece-rate earnings, and commissions. It can also include the value of non-cash payments like board or lodging provided by the employer.
Certain payments, such as gifts, discretionary bonuses, and payments for time not worked (e.g., vacation pay), are excluded by law from this calculation.
Example Calculation: Consider a nonexempt employee paid $20 per hour who works 45 hours in a single workweek.
Straight-Time Pay: 45 hours × $20/hour = $900
Overtime Premium: The employee worked 5 overtime hours (45 – 40). The overtime premium is one-half of the regular rate.
$20/hour (regular rate) × 0.5 = $10 (half-time premium)
5 overtime hours × $10 = $50 (total overtime premium)
Total Pay for the Week: $900 (straight-time) + $50 (overtime premium) = $950
Alternatively, you can calculate it as 40 hours at the regular rate plus 5 hours at the “time-and-a-half” rate ($20 × 1.5 = $30/hour).
(40 hours × $20/hour) + (5 hours × $30/hour) = $800 + $150 = $950
Common Overtime Misconceptions
Misunderstandings about overtime are a frequent source of wage violations. It is important to be clear on what the law requires.
Myth: Salaried employees are not eligible for overtime.
Fact: This is one of the most significant and costly misconceptions. Being paid a fixed salary does not automatically exempt an employee from overtime. To be exempt, an employee’s job must meet specific “duties tests” for executive, administrative, or professional roles, and they must also be paid a salary above a certain threshold.
If a salaried employee’s job duties do not meet these tests, they are considered nonexempt and are entitled to overtime pay for hours worked over 40.
Myth: Overtime is required for weekend or holiday work.
Fact: The FLSA does not require employers to pay a premium rate simply for working on a Saturday, Sunday, or holiday. Extra pay for such work is a matter of agreement between the employer and the employee. Overtime is only required by federal law when an employee’s total hours for the workweek exceed 40, regardless of which days those hours were worked.
Myth: I can agree to waive my right to overtime.
Fact: The right to overtime pay cannot be waived or signed away. Any agreement between an employer and an employee to not pay overtime for hours worked over 40 is illegal and unenforceable. An employer must pay the required overtime premium even if the employee agreed to work for straight time.
What the FLSA Does Not Require
While the FLSA provides critical baseline protections, it is important to understand what it does not mandate. Many common workplace benefits are not required by federal law but are instead determined by employer policy or negotiation with employees.
The FLSA does not require employers to provide:
Vacation, holiday, severance, or sick pay
Meal or rest periods (with the specific exception of break time for nursing mothers to express breast milk)
Premium pay for weekend or holiday work (unless overtime hours are worked on those days)
Pay raises or fringe benefits
A discharge notice, reason for discharge, or immediate payment of final wages to terminated employees (though state laws may have such requirements)
These benefits are generally matters of agreement between an employer and an employee or the employee’s representative.
The Right to Equal Pay: Fighting Pay Discrimination
Beyond the foundational standards of fair pay established by the FLSA, federal law also provides powerful protections against pay discrimination. This means that while employers must meet minimum wage and overtime requirements for everyone, they are also prohibited from paying employees differently based not on their work, but on their identity.
The legal framework for equal pay reveals a progressive legislative understanding of discrimination. It began with a straightforward, job-to-job comparison under the Equal Pay Act and evolved into a broader, more nuanced understanding under Title VII of the Civil Rights Act, which recognizes that discrimination is often systemic, affects multiple identity groups, and manifests in all aspects of compensation, not just base salary.
What is Pay Discrimination?
Pay discrimination occurs when an employer pays an employee less or provides them with less favorable compensation due to their membership in a protected class. Compensation includes not only salary or hourly wages but also overtime pay, bonuses, stock options, benefits, and almost every other form of remuneration.
Federal law prohibits pay discrimination based on:
- Sex (including pregnancy, gender identity, and sexual orientation)
- Race
- Color
- Religion
- National Origin
- Age (40 or older)
- Disability
- Genetic Information
The two primary federal laws that form the backbone of these protections are the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964.
| Law | Primary Purpose | Who is Protected? | Key Prohibitions |
|---|---|---|---|
| Fair Labor Standards Act (FLSA) of 1938 | Establish baseline wage and hour standards for the nation. | Most U.S. workers (nonexempt employees). | Paying less than the federal minimum wage; failing to pay time-and-a-half for overtime hours worked over 40 in a week. |
| Equal Pay Act (EPA) of 1963 | Prohibit sex-based wage differences for “substantially equal work.” | Men and women. | Paying different wages to men and women who perform jobs requiring substantially equal skill, effort, and responsibility under similar working conditions. |
| Title VII of the Civil Rights Act of 1964 | Prohibit all forms of employment discrimination, including in compensation. | Workers based on race, color, religion, sex, and national origin. | Discriminating in any term of employment (pay, benefits, promotions, etc.) based on an individual’s protected status. |
The Equal Pay Act of 1963: Equal Pay for Substantially Equal Work
The Equal Pay Act was a landmark piece of legislation specifically targeting the long-standing practice of paying women less than men for the same job. It amended the FLSA to make it illegal for employers to pay unequal wages to men and women who perform substantially equal work.
What does “substantially equal work” mean?
The law does not require jobs to be identical, only “substantially equal.” This determination is not based on job titles but on the actual content of the work performed.
Courts and the Equal Employment Opportunity Commission (EEOC), the agency that enforces the EPA, look at four key factors as a whole to compare jobs:
Skill: This is measured by the experience, ability, education, and training required to perform the job. The focus is on the skills needed for the job, not the skills an individual employee happens to possess.
Effort: This refers to the amount of physical or mental exertion needed to perform the job.
Responsibility: This encompasses the degree of accountability and the importance of the duties performed.
Working Conditions: This includes the physical surroundings (like temperature or fumes) and hazards of a job.
Minor differences in these factors will not justify a pay disparity. For a claim to be valid, the overall job content must be very much alike. Generally, the comparison must be between jobs within the same “establishment” or physical place of business, though exceptions can be made if a central authority manages compensation for multiple locations.
What are the legal justifications for pay differences?
The EPA allows for pay differences between men and women in substantially equal jobs if the employer can prove the difference is based on one of four specific “affirmative defenses”:
A seniority system (paying more to those with longer service).
A merit system (rewarding employees for exceptional performance).
A system that measures earnings by quantity or quality of production (e.g., a piece-rate system).
A differential based on any other factor other than sex (e.g., a shift differential for working the less desirable night shift).
Crucially, an employer cannot remedy a violation of the EPA by reducing the wage rate of any employee.
Title VII of the Civil Rights Act of 1964: Broader Protections
Just one year after the EPA, Congress passed the landmark Civil Rights Act of 1964. Title VII of this act dramatically expanded protections against employment discrimination, including in the realm of pay.
How does Title VII expand on the EPA?
Title VII is significantly broader than the EPA in two key ways. First, while the EPA is limited to sex-based discrimination in pay for equal work, Title VII prohibits discrimination in all terms and conditions of employment—including hiring, firing, promotions, benefits, and compensation—based on a wider range of protected classes.
Second, Title VII does not require a comparison of “substantially equal” jobs. It is illegal under Title VII to discriminate in pay against an employee because of their protected characteristic, even if there is no employee of a different group performing a similar job.
Protected Classes under Title VII
For compensation purposes, Title VII prohibits discrimination based on:
- Race
- Color
- Religion
- Sex (this has been interpreted by federal courts and the EEOC to include pregnancy, childbirth or related medical conditions, sexual orientation, and gender identity)
- National origin
This broader scope was essential. The data on wage gaps clearly demonstrates that the intersection of multiple identities, such as race and gender, creates far wider pay disparities than gender alone—a reality the narrower EPA was not equipped to address.
Title VII recognized that discrimination is not always a simple one-to-one comparison; it can manifest systemically by steering certain groups into lower-paying roles, denying them promotions, or undervaluing their contributions in more subtle ways.
Understanding the Wage Gap: A Look at the Data
Despite decades of legal protections, significant and persistent wage gaps remain between different demographic groups in the United States. These gaps are a statistical measure of the earnings disparity and, while not every cent of the gap can be attributed to direct discrimination, they highlight systemic inequities in the labor market.
The Gender Pay Gap
According to the U.S. Bureau of Labor Statistics (BLS), in 2023, women who were full-time wage and salary workers had median usual weekly earnings that were 84 percent of those of their male counterparts.
This means that for every dollar earned by a man, a woman earned about 84 cents. While this is a significant improvement from 1979, when the ratio was 62 percent, progress has largely stalled since the early 2000s.
Breakdown by Age: The gender pay gap is smaller for younger workers and widens with age, a phenomenon often attributed to the “motherhood penalty” and other caregiving responsibilities that disproportionately fall on women.
In 2023, women ages 25 to 34 earned 89 percent as much as men in the same age group. For workers ages 45 to 54, that ratio dropped to 83 percent.
Breakdown by Race and Ethnicity: The gender pay gap is compounded by race. When compared to the earnings of white, non-Hispanic men, the disparities are stark.
In 2023, Black women were paid just 64 cents and Latina women were paid only 51 cents for every dollar paid to a white, non-Hispanic man.
Even within the same racial group, gaps persist; for example, Black women earn less than Black men, and Hispanic women earn less than Hispanic men.
The Racial and Ethnic Pay Gap
Data from the BLS also reveals significant earnings disparities among racial and ethnic groups for all full-time workers. In 2022, the median usual weekly earnings were:
- Asians: $1,401
- Whites: $1,085
- Blacks: $878
- Hispanics: $823
Research from the Economic Policy Institute shows that these gaps cannot be fully explained by factors like education, experience, or geographic location. In 2019, after controlling for these factors, an “unexplained” wage gap of 14.9% remained between Black and white workers.
This unexplained portion is often attributed to factors that are difficult to measure, including systemic discrimination, differences in school quality, and unequal opportunities.
Other Forms of Pay Discrimination
Beyond sex and race, federal laws protect against pay discrimination on several other grounds.
Age Discrimination: The Age Discrimination in Employment Act (ADEA) of 1967 protects individuals who are 40 years of age or older from employment discrimination, including in compensation.
It is illegal for an employer to pay an older worker less than a younger worker for performing the same job because of their age. Examples of age-based pay discrimination could include a company policy of giving smaller annual raises to employees over a certain age or excluding older workers from lucrative bonus programs.
Disability-Based Discrimination: The Americans with Disabilities Act (ADA) of 1990 prohibits discrimination against qualified individuals with disabilities in all aspects of employment, including pay.
An employer cannot pay a qualified employee with a disability less than an employee without a disability because of their condition. The wage gap for people with disabilities is substantial.
For instance, disabled women face a dual burden, earning as little as 44 cents (for disabled Latinas) for every dollar paid to a white, non-Hispanic, nondisabled man.
In some cases, under a special provision of the FLSA, employers can obtain certificates to pay workers with disabilities less than the minimum wage, a practice that contributes to these wide disparities.
Religious Discrimination: Title VII also makes it illegal to discriminate in pay based on an employee’s religion. This includes treating employees unfavorably because of their sincerely held religious beliefs or practices.
Examples could include denying a promotion (and the accompanying pay raise) to a Muslim employee who takes prayer breaks during the day, or paying a Jewish employee less because they cannot work on Saturdays for religious reasons.
Employers are required to provide reasonable accommodations for religious practices unless doing so would cause an undue hardship on the business.
National Origin Discrimination: It is illegal under Title VII to discriminate in compensation based on an employee’s national origin—the country where they or their ancestors were born.
This can include discrimination based on a person’s accent, ethnicity, or perceived “foreignness.” For example, it would be illegal for a company to have a policy of paying workers with accents less than other workers, or to offer a lower starting salary to a qualified applicant because they are from a particular country.
What is Wage Theft and How Do I Spot It?
While pay discrimination involves being paid unequally, wage theft involves not being paid at all for work you have already performed. It is a direct violation of the Fair Labor Standards Act and represents a significant and often hidden drain on the earnings of American workers.
This is not a matter of simple payroll errors; it is a systemic issue that disproportionately harms the most vulnerable workers. The same low-wage earners, women, people of color, and immigrants who suffer from the widest pay gaps are also the primary victims of wage theft.
This practice, therefore, does more than just take money from a single paycheck; it actively widens the economic divide by taking funds directly from the pockets of those who can least afford the loss, compounding the disadvantages they already face.
Defining Wage Theft
Wage theft occurs whenever an employer fails to pay an employee the full wages to which they are legally entitled. It is one of the most costly crimes in the U.S., yet it is often subtle and goes unreported because employees may be unaware of their rights or fear retaliation from their employer for speaking up.
In 2021 alone, the Department of Labor recovered over $230 million in back wages for employees who were victims of wage theft.
Common Examples of Wage Theft
Wage theft can take many forms, some more obvious than others. Here are some of the most common ways employers illegally withhold pay:
Working “Off the Clock”: This is one of the most frequent forms of wage theft. It occurs when an employer requires or allows a nonexempt employee to perform work-related tasks before clocking in or after clocking out.
For example, a restaurant manager who asks servers to stay an extra 15 minutes after their shift ends to clean and set tables without pay is committing wage theft. While 15 minutes may seem small, over the course of a year, it can add up to dozens of hours of unpaid labor.
Minimum Wage Violations: Simply paying a nonexempt employee less than the legally required federal, state, or local minimum wage for each hour worked is a direct form of wage theft.
Overtime Violations: Failing to pay the required time-and-a-half premium for all hours worked over 40 in a workweek is a clear violation. This includes paying an employee their regular “straight time” rate for overtime hours or simply not paying for those hours at all.
Illegal Deductions: Employers sometimes make deductions from an employee’s paycheck that are not legally permitted. This can include deductions for uniforms, tools, supplies, or for cash register shortages or customer walk-outs. These deductions are always illegal if they cause the employee’s earnings to fall below the minimum wage for the hours worked.
Withholding of Final Paychecks: When an employee leaves a job, whether voluntarily or through termination, the employer is legally obligated to pay them all wages owed. Withholding a final paycheck is a form of wage theft. Many states have strict laws dictating how quickly this final payment must be made.
Misclassifying Employees as Independent Contractors: A common tactic to avoid wage and hour laws is to misclassify a worker as an “independent contractor” when they are, in fact, an employee.
True independent contractors are in business for themselves, while employees are economically dependent on their employer. By misclassifying an employee, an employer illegally avoids their obligation to pay minimum wage, overtime, and their share of Social Security and Medicare taxes.
Tip Theft: In tipped industries, wage theft can occur when managers or owners illegally take a portion of their employees’ tips, fail to pay the proper cash wage to make up the difference to the full minimum wage, or require tipped employees to share their tips with non-tipped employees like managers, dishwashers, or cooks.
Meal and Rest Break Violations: In states that mandate meal and rest breaks, it is wage theft to deny an employee their required break. It is also illegal to require an employee to perform any work duties during an unpaid meal break. If an employee is not fully relieved of their duties, their meal break must be counted and paid as work time.
Small Amounts Add Up
It is easy to dismiss small instances of unpaid time, but these amounts can be critical for hourly workers. In a 2018 wage theft case against Starbucks, the California Supreme Court addressed this very issue.
In his ruling, Justice Goodwin Liu wrote that what a company might call a “de minimis” or trivial amount is not trivial at all to an ordinary person. He noted, “$100 is enough to pay a utility bill, buy a week of groceries or cover a month of bus fares.”
This underscores the principle that all earned wages matter and are protected by law, no matter how small the individual amount may seem.
The New Frontier: Pay Transparency and Salary History Bans
In recent years, the fight for pay equity has evolved. While federal laws like the Equal Pay Act and Title VII provide crucial tools for addressing discrimination after it has occurred, a new wave of state and local laws aims to prevent it from happening in the first place.
These policies represent a fundamental strategic shift, moving from a reactive, litigation-based model to a proactive, structural-reform model. They target the root cause of many pay gaps—the lack of information available to workers—rather than just addressing the symptoms after the damage is done.
This new frontier is defined by two key concepts: pay transparency and salary history bans.
The Push for Pay Transparency
Pay transparency laws are designed to dismantle the secrecy that has long surrounded compensation and has allowed pay disparities to fester.
What are pay transparency laws?
Pay transparency laws are state or local statutes that require employers to disclose information about salary ranges. The specific requirements vary by jurisdiction, but they generally fall into a few categories:
In Job Postings: Many laws require employers to include a good-faith salary range for a position in any internal or external job posting.
Upon Request: Some laws require employers to provide the pay scale for a position to an applicant upon their reasonable request.
At a Certain Stage: Other laws mandate disclosure at a specific point in the hiring process, such as after an initial interview or before a job offer is made.
For Current Employees: Some laws also give current employees the right to request the pay range for their own position.
Which states have these laws?
This is a rapidly evolving area of law, with more states and cities enacting legislation each year. As of early 2025, states with significant pay transparency laws include California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Minnesota, New York, Rhode Island, and Washington, along with the District of Columbia.
Several other states and localities have laws taking effect in 2025, including Massachusetts, New Jersey, and Vermont.
How does transparency help close the wage gap?
Pay transparency is a powerful tool for promoting equity because it directly addresses the information asymmetry that has historically disadvantaged workers, particularly women and people of color.
It Levels the Negotiation Playing Field: Research shows that pay negotiations are notoriously unfavorable to women, who are often penalized for being perceived as too aggressive and tend to ask for less than men.
When employers provide a clear salary range upfront, it gives all applicants the same baseline information. This shifts the focus of negotiation from a candidate’s past (and potentially depressed) earnings to the actual market value of the job, empowering them to make an opening offer that is less tied to their personal history or identity.
It Incentivizes Employer Accountability: When companies are required to post salary ranges publicly, it creates a strong incentive to conduct internal pay audits and address unjustified disparities before they become public knowledge.
This proactive approach can help businesses identify and correct inequities between employees performing similar work, thereby reducing their legal risk and improving morale.
It Empowers All Workers: Transparency allows current employees to see if their pay is aligned with what the company is offering new hires for similar roles. This information can empower them to renegotiate their own salary or to seek better-paying opportunities elsewhere, creating a more efficient and equitable labor market.
Research on Colorado’s 2021 transparency law found that posted salaries increased by about 3.6 percent on average after the law took effect, suggesting that transparency can lead to more worker-friendly pay.
Salary History Bans: Breaking the Cycle of Underpayment
A complementary policy to pay transparency is the prohibition on employers asking about a job applicant’s salary history. These bans are designed to break a vicious cycle that traps many workers in a pattern of underpayment.
Why are employers banned from asking about my past salary?
The logic behind salary history bans is straightforward: if a worker was underpaid in their previous job—whether due to discrimination, a weak negotiating position, or having worked in a lower-paying sector—using that past salary as a benchmark for their new salary will perpetuate that inequity.
A new employer, by basing their offer on a candidate’s depressed prior wages, is effectively importing and continuing the effects of past discrimination. This forces women and workers of color, who are statistically more likely to be underpaid, to carry that disadvantage with them from job to job throughout their careers.
By banning the question, the law forces employers to value a candidate based on their skills, qualifications, and the market rate for the role they are seeking, not on what they happened to earn in the past.
Which states and cities have these bans?
Salary history bans have become widespread. As of 2024, 21 states (including D.C.) and over 20 cities and counties have enacted some form of a salary history ban.
This includes states such as Alabama, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, New Jersey, New York, Oregon, Virginia, and Washington.
What is the impact of these laws?
Emerging research indicates that these policies are having their intended effect. Multiple studies have found that after salary history bans were implemented, pay for job changers increased, with particularly significant gains for women and Black workers.
One study found that these bans increased wages for job-changing women by 6.2% and for non-White workers by 5.9%.
Another study found that the bans motivated employers to post salary ranges in job ads more frequently, further contributing to a more transparent market.
While some research suggests that the effects can be complex, with some employers shifting to ask about “salary expectations” instead, the overall trend points toward these bans being an effective tool in narrowing wage gaps.
A Closer Look: Worker Rights in California
The United States operates under a system of federalism, where federal law sets a minimum standard of rights, but states are free to provide additional, stronger protections.
California’s robust labor laws provide a powerful example of this “federal floor, state ceiling” concept in action. The state has frequently acted as a “laboratory of democracy,” creating a comprehensive ecosystem of worker protections that addresses gaps left by federal legislation.
For workers, this serves as a critical reminder that rights are not uniform across the country and underscores the importance of being aware of local and state-level laws, which may offer significantly more benefits than federal law alone.
California’s Minimum Wage: Exceeding the Federal Standard
While the federal minimum wage has remained at $7.25 per hour since 2009, California has consistently mandated a higher rate.
Statewide Minimum Wage: As of January 1, 2025, the minimum wage for all employers in California is $16.50 per hour. This is more than double the federal rate.
Industry-Specific Minimums: California has also established even higher minimum wages for certain industries. For example, a statewide minimum wage of $20.00 per hour for most fast food restaurant employees went into effect on April 1, 2024. A tiered, higher minimum wage for healthcare facility workers also began to take effect in 2024.
Local Ordinances: Many cities and counties within California have their own minimum wage ordinances that are higher than the state rate.
California’s Overtime Rules: Beyond the 40-Hour Week
California’s overtime laws are substantially more protective for employees than the federal FLSA. While federal law only requires overtime after 40 hours in a workweek, California law mandates it on a daily basis as well.
Daily Overtime: In California, nonexempt employees are entitled to overtime pay at one and one-half times their regular rate of pay for all hours worked in excess of eight hours in a single workday.
Weekly Overtime: The state also maintains the 40-hour weekly standard, requiring time-and-a-half for hours worked beyond 40 in a workweek.
Seventh Day Overtime: An employee is entitled to time-and-a-half for the first eight hours of work on the seventh consecutive day of work in a single workweek.
Double Time Pay: California law includes an even more protective “double time” provision, which is not present in federal law. An employee must be paid twice their regular rate of pay for all hours worked in excess of 12 in a single workday, and for all hours worked in excess of eight on the seventh consecutive day of work.
Mandatory Meal and Rest Breaks
The FLSA does not require employers to provide meal or rest breaks to adult employees. California law, however, mandates them.
Meal Breaks: Employers must provide an uninterrupted, 30-minute unpaid meal break to an employee who works more than five hours in a day. A second 30-minute meal break is required if an employee works more than 10 hours in a day.
If an employer does not provide a compliant meal break, they must pay the employee one additional hour of pay at their regular rate as a penalty.
Rest Periods: California employers must authorize and permit a paid 10-minute rest period for every four hours worked, or major fraction thereof. These rest periods should be taken as close to the middle of the work period as is practicable.
Like with meal breaks, failure to provide a compliant rest break triggers a penalty of one hour of pay.
The California Fair Pay Act
California has significantly strengthened its equal pay laws, creating protections that go well beyond the federal Equal Pay Act.
“Substantially Similar Work”: The California Fair Pay Act uses a more flexible standard of “substantially similar work” rather than the federal “substantially equal work.” This allows for comparisons between employees who perform similar tasks and have similar responsibilities, even if their job titles or day-to-day work are not identical.
Adds Race and Ethnicity: The state’s law explicitly prohibits pay discrimination based not only on sex, but also on race and ethnicity, providing a clear statutory basis for such claims.
Eliminates “Same Establishment” Rule: Unlike the federal EPA, California’s law eliminates the requirement that employees being compared must work at the “same establishment,” allowing for comparisons across different company locations.
Prohibits Prior Salary Justification: California law explicitly forbids an employer from justifying a sex-, race-, or ethnicity-based pay difference by relying on an employee’s prior salary history. This is a key provision aimed at stopping the cycle of pay discrimination.
Pay Transparency and Salary History Ban: California also has robust pay transparency and salary history ban laws, requiring employers to include pay scales in job postings and prohibiting them from asking applicants about their salary history.
This case study of California’s laws serves a dual purpose: it provides detailed information for workers in the nation’s most populous state and acts as a powerful call to action for all readers to investigate the specific protections available where they live.
Taking Action: How to Enforce Your Rights
Understanding your rights is the first step, but knowing how to enforce them is what gives those rights power. The enforcement of American pay rights is handled by two different federal agencies, creating a procedural maze that can be confusing for workers.
This separation reflects the different legislative origins of “fair pay” standards versus “equal pay” anti-discrimination laws. A worker’s ability to get justice depends critically on their ability to correctly diagnose the type of violation they have experienced and navigate the correct agency’s unique and often unforgiving deadlines.
This section provides a practical, step-by-step guide to help you take action.
Know Your Employer’s Responsibilities
Before filing a complaint, it is helpful to understand the basic obligations your employer has regarding pay information.
Recordkeeping: Employers covered by the FLSA are legally required to keep accurate and detailed records for each nonexempt worker. This includes personal information, the time and day the workweek begins, the total hours worked each day and week, the basis on which wages are paid (e.g., hourly, salary), the regular hourly pay rate, total straight-time and overtime earnings, and all additions to or deductions from wages.
These payroll records must generally be maintained for at least three years.
Workplace Postings: Employers are required to display official posters in a conspicuous place (like a break room) that inform employees of their rights under various labor laws, including the FLSA.
The Department of Labor provides these posters to employers free of charge. The primary poster for wage rights is the “Employee Rights Under the Fair Labor Standards Act” poster, which covers the federal minimum wage, overtime pay, and child labor laws.
Filing a Wage Complaint with the Department of Labor
If you believe your employer has violated the Fair Labor Standards Act—for example, by failing to pay you the correct minimum wage or overtime—the correct agency to contact is the U.S. Department of Labor’s Wage and Hour Division (WHD).
How to File a Complaint with the WHD
The process is confidential, and you can file a complaint regardless of your immigration status.
Gather Your Information: Before you file, collect as much information as possible. This includes your name and contact information; your employer’s name, address, and phone number; the name of a manager or owner; a description of your job duties; the dates you worked; and details about how you were paid (e.g., pay rate, frequency, method).
Contact the WHD: You can file your complaint in one of two ways:
By Phone: Call the WHD’s toll-free helpline at 1-866-4-USWAGE (1-866-487-9243). Help is available in multiple languages.
Online: You can contact the WHD through their online portal to be directed to your nearest field office. You can also visit your local WHD office in person.
What is the time limit for filing?
The FLSA has a strict statute of limitations. You must file your complaint within two years of the violation. If the violation was willful (meaning the employer knew or showed reckless disregard for the law), the statute of limitations is extended to three years.
It is crucial to file as soon as possible to ensure your claim is not barred by this deadline.
Filing a Discrimination Charge with the EEOC
If you believe you are being paid less because of your race, color, religion, sex, national origin, age, or disability, the correct agency to contact is the U.S. Equal Employment Opportunity Commission (EEOC).
Filing a charge with the EEOC is a prerequisite to filing a private lawsuit for discrimination under federal law.
How to File a Charge with the EEOC
The EEOC offers several ways to begin the process.
Start the Process: You can initiate a charge in several ways:
Online: The EEOC Public Portal is the fastest way to start. You will first submit an online inquiry, after which the EEOC may schedule an interview with you.
By Phone: Call the EEOC at 1-800-669-4000.
In Person: You can make an appointment to visit an EEOC field office.
By Mail: You can send a letter to your nearest EEOC office.
The Formal Charge: After your initial inquiry and interview, you will work with the EEOC to file a formal “Charge of Discrimination.” This document officially starts the investigation process.
What are the deadlines for filing?
The time limits for filing with the EEOC are extremely strict and represent a significant procedural hurdle. This is why it is critical to act quickly if you suspect discrimination.
In most cases, you must file a charge with the EEOC within 180 calendar days from the day the discrimination took place.
This deadline is extended to 300 calendar days if a state or local agency also enforces a law that prohibits employment discrimination on the same basis. This extension applies in most states, but it is always safest to act within the 180-day window.
For pay discrimination, the Lilly Ledbetter Fair Pay Act of 2009 clarified that the deadline clock resets with each new discriminatory paycheck you receive.
What Happens After I File?
Once you file a complaint with the WHD or a charge with the EEOC, the agency will notify your employer and begin an investigation. This may involve reviewing records, interviewing you, your coworkers, and management.
If the WHD finds a violation, a common remedy is the recovery of back pay, which is the difference between what you were paid and what you should have been paid. In some cases, an equal amount may be awarded as liquidated damages.
The WHD maintains a database called Workers Owed Wages (WOW), where you can search to see if the agency has collected back wages on your behalf that they have been unable to deliver.
If the EEOC finds a violation, it will first attempt to reach a settlement with your employer. If that fails, the agency may file a lawsuit on your behalf, or it will issue you a “Right to Sue” letter, which allows you to file your own lawsuit in court.
Employer Best Practices and Resources
Ensuring compliance with federal and state pay laws is not just a legal obligation but also a fundamental component of good business practice. Fair pay practices can improve employee morale, reduce turnover, and protect a company from costly litigation and reputational damage.
Best Practices for Employers to Ensure Fair Pay
Employers can take several proactive steps to ensure they are complying with the FLSA and anti-discrimination laws.
Classify Employees Correctly: This is the most critical first step. Employers must conduct a thorough analysis to correctly classify workers as either employees or independent contractors.
For employees, they must then apply the FLSA’s salary and duties tests to determine whether each employee is exempt or non-exempt from overtime. Misclassification is one of the most common and expensive wage and hour mistakes.
Maintain Accurate and Detailed Records: Meticulous recordkeeping is not just a best practice; it is a legal requirement under the FLSA. Employers should use a reliable time-tracking system to capture all hours worked by non-exempt employees, including any “off the clock” work.
Records of wages, hours, and other required information should be retained for at least three years.
Develop and Communicate Clear Policies: A written employee handbook should clearly outline policies regarding work hours, timekeeping procedures, meal and rest breaks, and overtime.
The policy should explicitly state that unauthorized overtime will not be tolerated but that if it is worked, it will be paid, and the employee will be subject to disciplinary action. This transparency helps prevent misunderstandings and demonstrates a good-faith effort to comply with the law.
Conduct Regular Audits and Training: Laws and regulations change. Employers should conduct periodic self-audits of their pay practices to identify and correct potential issues.
This includes reviewing job descriptions to ensure they match actual duties performed and checking that pay scales comply with both federal and state laws. Regular training for managers and supervisors on wage and hour compliance is essential, as they are on the front lines of assigning work and approving hours.
Stay Informed About State and Local Laws: Employers must remember that the FLSA is a baseline. They are responsible for complying with the state and local laws where their employees work, which are often more stringent than federal requirements, particularly regarding minimum wage and overtime.
Resources and Further Reading
The following official government resources provide detailed information for both workers and employers on fair and equal pay.
U.S. Department of Labor (DOL) Wage and Hour Division (WHD): The primary source for information on federal minimum wage, overtime, child labor, and other provisions of the Fair Labor Standards Act.
Website: https://www.dol.gov/agencies/whd
Handy Reference Guide to the FLSA
U.S. Equal Employment Opportunity Commission (EEOC): The primary source for information on federal laws prohibiting pay discrimination based on race, sex, age, disability, and other protected characteristics.
Website: https://www.eeoc.gov
Pay Discrimination Information
Bureau of Labor Statistics (BLS): The principal federal agency responsible for measuring labor market activity, working conditions, and price changes in the economy. It is the best source for official data on wages and pay gaps.
Website: https://www.bls.gov/
State and Local Labor Offices: For information on state-specific minimum wage, overtime, and equal pay laws, contact your state’s department of labor. The DOL provides a directory.
Directory of State Labor Offices
Our articles make government information more accessible. Please consult a qualified professional for financial, legal, or health advice specific to your circumstances.
