Pay Transparency Laws Were Meant to Close Wage Gaps. New Research Suggests They May Not Be Working as Intended.
Pay transparency laws were designed to help reduce wage disparities that disproportionately affect women and people of color. Over the past decade, 15 U.S. states have enacted legislation requiring employers to disclose compensation information—ranging from listing salary ranges in job postings to sharing those details with candidates during interviews.
However, new research from Cornell University suggests these laws have not been as effective as advocates hoped. One key reason: many employers technically comply with the rules without meaningfully improving transparency.
Most pay transparency laws require companies to provide a salary range in “good faith,” but they rarely define how wide that range can be. For example, New York’s law states that job postings must include the minimum and maximum salary or hourly rate the employer believes they are willing to pay in good faith. In practice, this has allowed some organizations to list extremely broad ranges that offer little practical guidance for job seekers.
Previous reporting has shown that some employers post ranges so wide that they technically comply with the law while still leaving applicants uncertain about the likely salary. Cornell’s research indicates that these broad ranges may actually undermine the goals of pay transparency.
Across four studies, researchers analyzed how applicants responded to salary disclosures. An examination of nearly 10 million job postings revealed significant variation in salary ranges. Follow-up studies found a consistent pattern: women were significantly more likely than men to prefer jobs with narrower pay ranges.
This tendency may unintentionally reinforce gender pay disparities. According to Alice Lee, assistant professor of organizational behavior at Cornell’s School of Industrial and Labor Relations and lead author of the study, women who gravitate toward jobs with narrower salary ranges also tend to negotiate less aggressively once they reach the interview stage.
“If women are sorting into jobs with narrow pay ranges, that is then constraining their likelihood to negotiate assertively for a higher salary,” Lee says. “Policies intended to reduce pay gaps could end up perpetuating them.”
The research team conducted several experiments to better understand these dynamics. After analyzing job postings and applicant behavior, the researchers tested potential solutions to encourage women to apply for roles with wider salary ranges.
One simple change made a significant difference: providing more context in job descriptions about how compensation decisions are made.
In the experiment, job ads included two additional sentences explaining the typical starting salary and outlining how pay is determined based on factors such as experience, skills, and job responsibilities. When this information was included, women applied to jobs with broader salary ranges at the same rate as men. Researchers also observed no gender gap in negotiation behavior.
Broad salary ranges have become a recurring issue in places that require pay transparency. Because the laws leave room for interpretation, many companies disclose only the minimum information needed to comply. Enforcement agencies typically focus on clear violations—such as employers failing to include any salary information at all—rather than addressing overly broad ranges.
For example, in the first year after New York City’s pay transparency law took effect in late 2022, the city’s Commission on Human Rights filed 33 complaints against employers. Most involved job postings that lacked salary information entirely, while relatively few targeted postings with extremely wide pay ranges. Meanwhile, reporting has found examples of companies advertising positions with salary bands spanning nearly $100,000.
Employers often justify broad salary ranges for practical reasons. Some want flexibility to negotiate with highly qualified candidates or remain competitive in fast-moving industries. In other cases, organizations may lack a clearly defined compensation structure—particularly for emerging roles, such as those related to artificial intelligence, where salaries can vary widely.
Still, wide salary bands can send unintended signals to job candidates. According to Lee, some applicants—especially women—may view broad ranges as a sign of uncertainty about compensation practices or a lack of commitment to pay equity.
“If a company cares about attracting diverse talent,” Lee says, “they should think carefully about what their pay ranges are signaling.”
The research suggests that companies can improve the effectiveness of pay transparency with relatively small adjustments. Providing brief explanations about how salaries are determined—and including a typical starting salary—can help applicants better understand what to expect.
Another approach is to break a broad range into defined tiers tied to experience or qualifications. While salary flexibility may still be necessary, clearer guidance can help candidates interpret the range more confidently.
Ultimately, while pay transparency laws give workers more opportunities to ask questions about compensation, employers still hold most of the power in salary negotiations. And many companies may not realize that the way they present pay information could be discouraging the very candidates they hope to attract.
“I think some employers genuinely want to attract diverse talent,” Lee says. “But they might be unintentionally limiting those applicants without even realizing it.”