Pay Transparency & Pay Equity: What Every Small Business Owner Needs to Know in 2026

We have worked with a variety of organizations and businesses ranging from small to large, nonprofits, education facilities, law firms, to multi-state healthcare systems. One thing we have consistently found is that compensation decisions often evolve organically over time. A business owner hires one employee at a certain rate, another manager hires someone else six months later, and before long, nobody can explain why two employees performing similar work are paid very differently.

For years, that may not have been a major concern. Today, however, pay transparency and pay equity are among the fastest-growing areas of employment law compliance, and they're increasingly impacting businesses of every size.

What Are Pay Transparency and Pay Equity?

Pay transparency is the practice of openly communicating compensation information, such as salary ranges, pay scales, and the factors that influence pay decisions. Depending on the state, employers may be required to include salary ranges in job postings, disclose pay information during the hiring process, or maintain records supporting compensation decisions.

Pay equity means that employees performing substantially similar work are compensated fairly, regardless of gender, race, or other protected characteristics. A pay equity review simply asks, "Can we clearly explain why employees in similar roles are paid differently?" Legitimate factors may include experience, education, certifications, performance, seniority, or geographic location.

The goal isn't to pay everyone the same—it's to ensure compensation decisions are consistent, fair, and well documented.

Why It Matters

Many small business owners assume these issues only affect large corporations. In reality, smaller organizations often face greater risk because compensation decisions are made as the business grows rather than through a structured pay program.

I've seen organizations where two employees in nearly identical roles had significantly different salaries simply because one negotiated more aggressively or was hired during a labor shortage. Years later, no one could explain the difference.

As employees gain greater access to salary information and workplace expectations continue to evolve, inconsistent pay practices can lead to lower morale, turnover, recruitment challenges, discrimination complaints, and unnecessary legal risk.

What Ohio Employers Should Know

While many states now require salary ranges in job postings, Ohio does not currently have a statewide pay transparency law requiring employers to disclose compensation ranges.

That said, Ohio employers shouldn't ignore the trend.

If you recruit remote employees or applicants in other states, you may already be subject to those states' pay transparency laws. In addition, Ohio's Pay Stub Protection Act reflects a broader movement toward increased wage transparency by requiring employers to provide employees with detailed wage statements.

The workforce is changing as well. More job seekers expect employers to be upfront about compensation, and organizations that embrace transparency are often viewed as more trustworthy and competitive.

Five Steps You Can Take Today

1. Establish salary ranges. Create reasonable pay ranges for each position, even if your state doesn't require it.

2. Document pay decisions. Keep simple records explaining why employees are paid differently, such as experience, certifications, performance, or specialized skills.

3. Review compensation annually. Compare employees performing similar work and ask whether you can confidently explain any pay differences.

4. Review your job postings. Make sure job descriptions, titles, and compensation information are accurate and consistent.

5. Train your managers. Ensure anyone involved in hiring or compensation understands how pay decisions should be made and documented.

Quick Self-Audit

Ask yourself:

· Do we have salary ranges for our key positions?

· Can we explain why employees in similar roles are paid differently?

· Are compensation decisions documented?

· Do managers understand how compensation decisions should be made?

· Would we feel comfortable if an employee asked how their pay was determined?

If you answered "no" to two or more of these questions, it may be time to review your compensation practices.

Final Thoughts

Pay transparency and pay equity are no longer concepts reserved for large organizations. They are becoming part of what employees, applicants, and regulators expect from today's employers.

For Ohio business owners, the message is simple: don't wait until legislation requires change. By establishing salary ranges, documenting compensation decisions, and periodically reviewing your pay practices, you can reduce risk, build employee trust, and position your organization for future growth.

Small steps today can prevent much larger challenges tomorrow.

About the Authors

Timothy A. Dimoff, CPP, a multi-certified, award-winning and internationally-recognized security and HR management consultant, speaker, author, media commentator and expert witness is president and founder of SACS Consulting & Investigative Services, Inc., a high-risk HR and security consulting and investigation firm located in Akron, OH.

Lucija Berbakov is the founder of L&B Consulting Services, LLC, where she partners with small and mid-sized businesses to build practical, people-centered HR strategies. With over 20 years of experience in human resources, talent acquisition, and leadership development, she helps organizations create structure, improve hiring outcomes, and develop strong, effective leaders. Contact her at Lucija@LBHRConsulting.com