As of July 1, 2026, Virginia’s new pay transparency and wage history ban (HB 636/SB 215) law is officially in effect. This law brings significant changes to how local independent businesses will recruit and hire employees.  Employers are now required to include a good-faith salary estimate or range on every job posting, including hourly, part-time, and internal postings. Additionally, businesses can no longer ask applicants about their pay history or use prior pay information when making hiring decisions. While this may not feel significant, the changes will require businesses to review hiring practices, job postings, and compensation policies to ensure compliance. By understanding the changes and taking proactive steps to comply now, you prevent potential legal risks and fines, while positioning your local business as transparent and trustworthy in today’s complex job market.

What changed?

The requirements surrounding the new pay transparency law are twofold. Businesses must include a good-faith wage or salary range in every public and internal job posting, including internal opportunities for promotions and transfers. Businesses are prohibited from asking applicants about their current or previous wages or salaries, relying on that information when making hiring or compensation decisions, or retaliating against applicants or employees who decline to disclose their pay history.

The new law applies to virtually every employer in Virginia, no matter company size. This means that even small, local independent businesses are required to comply. Businesses that do not comply may face enforcement actions and fines from the Virginia Attorney General. Applicants and employees may also pursue private legal action to recover damages, attorney fees, and other appropriate relief.

Learn more about the pay transparency law.

How will this impact your local business?

Complying with these new requirements requires more than just simply adding a salary range to job postings. Employers will need to review their entire hiring process, from advertising to interviews, to ensure they are transparent and align with new rules. 

One of the biggest challenges small businesses may face is establishing salary ranges before a posting is made. These ranges must be set in good faith and should reflect objective factors such as market data, internal pay equity, employee experience, and budget. If your business has historically had a flexible pay structure or negotiated compensation, you may need to formalize your pay structure.

The law also changes how hiring conversations are conducted. Hiring managers, owners, and anyone involved in the interview process should be trained not to ask about an applicant’s current or previous pay. Even if a candidate voluntarily shares their salary history, employers cannot rely on that information when determining compensation. By reviewing hiring practices now, employers can reduce risk while creating a more transparent and consistent recruitment process.

How can your business prepare?

Because the law is already in effect, immediate preparation is a necessity. There are several steps local businesses should take to reduce risk. The first step is to audit all active job postings across all platforms, including LinkedIn, your website, and job boards. Update every posting to include a good faith pay estimate or salary range.

Next, review your hiring materials and processes. Remove salary history questions from employment applications, interview guides, and recruiter scripts. Take the time to ensure your hiring managers understand that they cannot ask about or rely on an applicant’s prior compensation when making employment decisions. We recommend establishing guidelines for how salary ranges are determined. Develop a clear system that uses factors like market data, internal pay equity, experience requirements, and budget to develop compensation ranges that have evidence of good faith if questions arise.

Internal coordination is key to ensuring compliance. Internal discussion should take place to ensure that human resources, hiring managers, finance, and any recruits are aligned on all new legal requirements. Some businesses may find that many internal documents will need to be updated, so clear communication will help keep the process consistent and compliant.

Learn more about the steps your business needs to take to comply with Virginia’s new business laws.

How might pay transparency benefit your business?

The Society for Human Resource Management believes that pay transparency can benefit businesses by cultivating a culture of openness, transparency, and equity. Indeed promotes pay transparency as especially beneficial for small businesses, as it can discourage workplace discrimination.  Virginia’s new pay transparency laws provide an opportunity for businesses to strengthen their hiring and retention strategies.  Clear salary ranges can help attract candidates whose expectations align with the position, leading to more qualified applicants.

Transparency can also enhance your brand by showing that your business values openness. By being upfront about your pay structure, you build trust with candidates and the community, which can help your business stand out.

Internally, establishing consistent salary ranges encourages employers to evaluate compensation more objectively. This can help create greater consistency across similar roles while reducing the risk of unintentional pay disparities.

Ultimately, businesses that embrace pay transparency as more than a compliance requirement may be better positioned to attract talent and build a more equitable workplace.

Key Takeaways                                         

• Pay transparency is a business opportunity. Clear, consistent compensation practices can strengthen your employer brand, attract qualified candidates, build employee trust, and create a fairer workplace.

• The law applies to nearly every Virginia employer. Regardless of your business’s size, all job postings must include a good-faith salary range, and employers can no longer ask about an applicant’s pay history.

• Compliance requires a review of your entire hiring process. From job postings and employment applications to interview questions and compensation policies, businesses should ensure that every step aligns with the new requirements.

• Preparation today can reduce legal and financial risk tomorrow. Auditing job postings, documenting how salary ranges are determined, and training hiring managers can help businesses avoid penalties, legal claims, and compliance issues.