The Salary Range That Satisfied the Law and Broke the Trust It Was Meant to Build

A law that requires honesty doesn't automatically produce it. It just changes what dishonesty looks like.

Pay transparency laws now cover more than 16 states and Washington, D.C., requiring employers to post a salary range on job listings that reflects what they genuinely expect to pay. The intent is straightforward: give candidates real information, reduce negotiation asymmetry, and narrow pay gaps that have historically widened in the dark.

Employers found a workaround almost immediately. Instead of posting the range they actually intended to pay, many posted ranges so wide they disclosed nothing at all. New York's Department of Labor had to explicitly rule that placeholder ranges like "$1 to $1 million" are unlawful, and clarify that a compliant range must reflect what the employer "believes in good faith to be accurate when the ad is posted." That kind of clarification only becomes necessary once a workaround has become common enough to require a rule against it.

Regulators are now actively chasing the gap the workaround created. California tightened its own definition of "pay range" in 2026 to require the actual expected compensation, not a broad or placeholder figure. Massachusetts and New Jersey moved from published policy to active enforcement, auditing postings and issuing penalties for non-compliance. Washington added a temporary cure period, giving employers a short window to fix a non-compliant posting before penalties apply, a provision that only makes sense in a world where non-compliant postings had become routine enough to need a grace period.

New York didn't tighten its "good faith" standard because of one employer. Multiple states moved on the same problem, from different angles, in the same year. California narrowed the definition of a compliant range. New York banned placeholder ranges outright. Massachusetts and New Jersey shifted from guidance to enforcement. That is not one jurisdiction closing one loophole. It's several regulators independently discovering that the same behavior, wide, meaningless ranges technically satisfying the letter of a disclosure law, had become the default response across the employers they oversee.

A law asked employers to be transparent about pay. A large share of employers responded by being transparent about nothing, inside a range technically wide enough to be true.

The posted range wasn't really a compliance decision. It was a negotiation decision wearing a compliance disguise.

Anchoring effect: The first number a person encounters in a negotiation or decision disproportionately shapes their subsequent expectations and judgments, even when that number is arbitrary or not representative of the likely outcome. Once an anchor is set, people adjust insufficiently away from it.

A posted range of $60,000 to $180,000 for a role the employer actually intends to fill at $65,000 still does real work. It anchors the candidate to the top figure before a single conversation happens, which means the employer hasn't avoided the negotiation dynamics the law was trying to fix. They've just relocated the anchor to a number that was never real, and now have to spend the interview process walking the candidate back down from it. The law targeted information asymmetry. Employers responded to a completely different threat.

Loss aversion: People weigh the pain of a potential loss more heavily than the pleasure of an equivalent gain, which leads decision-makers to overweight the risk of losing flexibility or leverage relative to the more modest, more certain benefit of transparency.

What employers were actually protecting against wasn't legal exposure. It was the felt loss of negotiating room, the ability to lowball a candidate who doesn't push back, or to pay a strong negotiator less than a weaker one for the identical role. A wide range hedges against that loss without technically breaking the law. It just means the law's actual goal, closing the information gap that makes those disparities possible in the first place, never gets touched.

A "$1 to $1 million" range, or anything close to it, tells a candidate one of two things, and neither is reassuring. Either the organization genuinely doesn't know what it's willing to pay for the role, which suggests deeper dysfunction in how compensation decisions get made, or it knows exactly what it will pay and is choosing to withhold that number while performing the appearance of disclosure. A candidate doesn't need to know which explanation is true to lose trust in the posting. Both readings land the same way.

The effect isn't limited to candidates. Existing employees see these postings too, often for roles adjacent to their own, and a wide range doesn't reassure them any more than it reassures an applicant. If anything, it invites worse assumptions, since an employee has no way to know whether the top of that range reflects what a new hire might actually receive for work they've been doing for years at a lower rate. A range built to protect negotiating leverage against outside candidates ends up quietly damaging trust with the people already inside the building, and it does that whether or not anyone at the new hire's salary ever actually gets paid the top figure.

The fix isn't a narrower legal definition of "good faith." Regulators are already tightening that, and the anchoring problem survives it regardless, because even a defensible range still sets an expectation the employer has to manage.

• Ground every posted range in the number the organization would actually offer its strongest realistic candidate, not a legally defensible outer boundary. If the honest expected range is a $10,000 to $15,000 band, post that band. The willingness to negotiate is a separate conversation from the willingness to disclose.

• Treat the posted range as the actual negotiation frame, not a decoy to be walked back from. Train hiring managers and recruiters to reference the posted number as the real starting point in candidate conversations, so the number the candidate saw and the number they hear in the first call are the same number.

• Pair external pay disclosure with internal pay-band visibility. A posted external range that existing employees can't compare against their own documented band invites exactly the suspicion described above. Making internal bands visible alongside external postings closes the gap before it becomes a retention problem.

• Where a genuinely wide range is defensible, for example a role with real uncertainty about final seniority, disclose the reason, not just the number. "This range reflects two possible seniority levels depending on experience" gives a candidate something to anchor to that isn't arbitrary, which preserves legitimate flexibility without reproducing the trust problem of an unexplained spread.

• Some range width is genuinely legitimate, and a strict cap risks punishing honesty along with the gaming. A role where the employer honestly doesn't yet know whether the successful candidate will justify a junior or senior offer has a real reason for a wider band. Regulation aimed at closing the placeholder loophole can end up treating that honest uncertainty the same as bad-faith hedging.

• "Good faith" is an intent standard, and intent is hard to litigate. A company posting a moderately wide range, not an absurd one, can plausibly claim honest uncertainty even when the real motive is exactly the negotiating-room hedge described above. Enforcement built on proving intent will always struggle to catch the more disciplined version of the same workaround.

• Fixing the external range doesn't touch internal pay compression, and that's a separate problem entirely. Even a perfectly honest, accurately posted range can trigger legitimate resentment from tenured employees who discover it sits above their current pay. Transparency law addresses what candidates are told. It does nothing to address what an organization owes the people already inside it once that number becomes visible.

• Multi-state compliance pressure creates a rational, not just a bad-faith, reason to default to a wider range. A national employer posting one listing that must simultaneously satisfy California's, New York's, and Washington's differing standards has a genuine operational incentive to widen the range rather than build fifty separate versions of the same posting. Some of what looks like gaming is actually a reasonable response to fragmented, inconsistent state requirements, not a deliberate attempt to defeat the law.

If your organization posts salary ranges, genuine question: does the number on the listing reflect what you'd actually offer the strongest candidate in your pool, or is it the number your legal team decided was defensible if anyone asked?