Now is an opportune time for employers inside and outside of Cleveland to evaluate their pay policies and practices against the requirements of the many existing and forthcoming pay equity and transparency laws.
On April 30, 2025, Cleveland, Ohio, became the latest in a long list of jurisdictions to restrict how private employers recruit and hire talent. Intended to promote equitable compensation practices, Ordinance No. 104-2025 requires covered employers to post salary information in job ads and further bans covered employers from asking applicants about their salary history or using salary history to set pay. The ordinance covers private employers with at least 15 employees located in Cleveland and takes effect October 27, 2025.
The ordinance is part of a broader movement to reshape how employers determine pay for new hires in the interest of equity. Lawmakers in 22 states and dozens of cities across the country have passed similar laws in recent years. The laws in some of those jurisdictions will take effect later in 2025. As we reported, one such law, the New Jersey Pay Transparency Act, requires certain employers to disclose pay and benefits information in internal and external postings for new jobs, transfers and promotion opportunities and takes effect June 1, 2025. Now is an opportune time for employers inside and outside of Cleveland to evaluate their pay policies and practices against the requirements of the many existing and forthcoming pay equity and transparency laws.
Key Provisions of Cleveland’s Pay Equity Ordinance
Subject to certain limited exceptions, the Cleveland ordinance makes it unlawful for covered employers to use an applicant’s salary history to determine what compensation to offer the applicant and omit salary information from postings for open positions. We discuss each of these core provisions of the ordinance in turn.
Ban on Salary History Inquiries
The ordinance prohibits covered employers from inquiring about an applicant’s salary history, screening an applicant based on their current or past salary history, relying solely on an applicant’s salary history to decide whether to offer employment or determine the salary to offer, or retaliating against an applicant for refusing to disclose their salary history.
The ordinance defines the terms “inquire,” “salary” and “salary history” broadly to facilitate its remedial purpose. For example, “salary” for purposes of the ordinance encompasses not just base wages, but also includes commissions and benefits, although “benefits” are undefined.
Mandatory Inclusion of Compensation Information in Job Postings
The ordinance requires covered employers to include the salary range or salary scale for a position in the notification, advertisement or other formal posting for a job. Covered employers are required to include such information in postings for all manner of roles including, but not limited to, temporary and seasonal work, work on commissions and work through the services of a temporary employment agency.
Carveouts to Prohibitions
The ordinance exempts certain categories of employees and circumstances from its broad prohibitions.
First, the ordinance does not apply to current employees. It does not restrict covered employers from discussing compensation with candidates for internal transfers or promotion, for example. Similarly, it does not cover rehires whose salary history the employer knows from the applicant’s prior employment. Employees of federal, state or local governments (other than the city of Cleveland) also are not covered by the ordinance.
Next, where a collective bargaining agreement governs compensation, the ordinance does not apply to positions subject to the agreement.
Further, if an employer learns of an applicant’s salary history incidentally in the results of a pre-hire background check, the employer may consider the salary information, so long as it is not the sole determinant of the pay offered to the applicant. Similarly, the ordinance explicitly permits covered employers to consider an applicant’s current or prior salary if the applicant discloses it voluntarily, without prompting.
Finally, the ordinance does not apply where a separate federal, state or local law specifically authorizes the employer to rely on an applicant’s salary history to determine pay for the job.
Penalties for Violations
The ordinance vests enforcement authority with Cleveland’s Fair Employment Wage Board (FEWB). Individuals have 180 days to file a complaint of alleged violation of the ordinance with the FEWB. Upon receipt of a complaint, the FEWB will notify the employer. After 90 days have passed from the employer’s receipt of a complaint without a resolution, the FEWB may issue a civil penalty on the employer in amounts ranging from $1,000 to $5,000. The amount of civil penalties is subject to increase annually based on the consumer price index.
The ordinance does not include a private cause of action for applicants. Therefore, applicants have no right to sue employers for violations of the ordinance.
What This Means for Employers
Cleveland employers ought to use the next several months before the ordinance takes effect to review their pay policies, hiring practices and hiring documents in preparation for compliance.
Cleveland employers should review their job applications for questions about salary history. Additionally, they should review salary and benefits information to prepare for disclosing compensation information in job postings. Another step they may want to take is training internal and external recruiters, hiring managers and other personnel involved in hiring about the mandates of the ordinance. Cleveland employers ought to consider as well how the ordinance may affect employee relations with existing employees.
Cleveland employers may want to undertake an internal pay equity audit and consider working with counsel to benefit from the protections of attorney-client privilege.
Employers in Ohio should note that three other major cities have laws similar to the ordinance already in effect: Cincinnati (effective March 2020), Toledo (effective June 2020) and Columbus (effective March 2024). The Cleveland ordinance goes further than each of those other Ohio city laws in requiring disclosure of salary and benefits information in job postings. The laws in Cincinnati and Toledo require employers to disclose pay ranges for positions only upon an applicant’s specific request, after the employer has extended a conditional job offer for the position. The Columbus law has no requirement to disclose pay ranges to applicants.
The distinctions among pay equity laws in Ohio’s cities is a mere snapshot of the nuances among the many state and local laws banning salary inquiries, mandating salary disclosures and/or otherwise regulating pay decisions. Employers operating in states or cities with such laws in place should be mindful of the legal as well as employee-relations implications of the laws on their hiring and compensation practices.
For More Information
If you have any questions about this Alert, please contact Eve I. Klein, Kathryn R. Brown, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group, or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.