On April 30, 2025, the City of Cleveland passed a progressive Pay Transparency Ordinance (the “Ordinance”) aimed at reversing the historic wage gap for women and people of color.
The Ordinance takes effect on October 27, 2025, and it applies to employers with 15 or more employees within city limits. The Ordinance makes it unlawful and discriminatory for an employer to:
- Ask about an applicant’s prior earning history.
- Screen an applicant based on past earning history or current earnings.
- Rely exclusively on an applicant’s earning history when negotiating an employment contract.
- Refuse to hire or otherwise retaliate against an applicant who refuses to disclose his/her earning history.
The Ordinance further requires employers to disclose the salary range in any job advertisement or formal posting that invites employment applications.
Pay Transparency Ordinance Enforcement & Penalties
When Cleveland’s Ordinance becomes effective in October, employers can face penalties for non-compliance. Employers can be fined up to $1,000 for a first offense, $2,500 for a second offense, and $5,000 for any additional offenses.
Key Provisions of the Ordinance
However, the Ordinance does acknowledge certain exceptions. For example, the Ordinance does not apply when: an applicant seeks a promotion with his/her current employer; an applicant voluntarily discloses his/her earning history to an employer; or the applicant is re-hired by an employer that already has access to information about the applicant’s earning history. Similarly, the Ordinance does not apply when a position’s salary is decided through collective bargaining.
According to the Ordinance, studies have shown that considering an applicant’s previous earnings can lead to discrimination and can expand a gender-based pay gap. The Ordinance also indicates that women, on average, earn approximately 83 cents for every dollar earned by men. Over the course of a 40-year career, this can result in a wage differential of more than $400,000. The wage gap is even more significant for women of color. Studies show that Black women make 66 cents for every dollar earned by men, while Latina women make 58 cents for every dollar earned by men. Without pay transparency laws, wage gaps can be perpetuated. If female employees historically earn less than male employees—and if employers rely upon employees’ historical earnings when setting wage rates—women may continuously receive lower salaries than their male counterparts. The City of Cleveland’s Ordinance is designed to break this cycle by prohibiting consideration of an applicant’s historical earnings.
Cleveland is not the first city in Ohio to pass a pay transparency ordinance. In fact, in recent years, Cincinnati, Columbus, and Toledo have all taken steps to reduce the wage gap by passing their own pay transparency ordinances. However, Cleveland’s Ordinance has been the most aggressive the state of Ohio has seen so far. As of now, Cleveland is the only city in the State of Ohio to require employers to disclose salary ranges on their job postings.
A Step Toward Pay Equity
Pay transparency laws have gained momentum across the United States, and there is reason to believe that these laws have effectively reduced the historical wage gap. According to the Women’s Foundation of Colorado, for example, Colorado’s wage gap has been reduced by seven cents since Colorado passed its 2021 Equal Pay for Equal Work Act, and female employees in Colorado are now making almost $3,000 more per year on average. Washington and California have also successfully narrowed the gender-based pay gap since enacting state-wide pay transparency laws. Importantly, pay transparency laws are designed to increase salaries for women and people of color, without reducing salaries for others. Since the enactment of pay transparency laws, average salaries for men have not decreased.
For more information on Cleveland’s new Ordinance, or to seek counsel from our Employment practice group, please reach out to request a consultation or call us at 216-696-1422.
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McCarthy Lebit would like to thank law clerk Julia I. Crandall for her work in assisting with the preparation of this legal blog post for The More Report.
