Pay Range
What is a pay range and how is it determined?
A pay range is the minimum to maximum salary or hourly rate an employer will pay for a specific role or job grade. Pay ranges are set based on market data, internal equity, and the level of the role, usually with minimum, midpoint, and maximum anchors. In 2026, pay transparency laws in California, Colorado, New York, Washington, Illinois, and other jurisdictions require employers to disclose pay ranges in job postings, making range design a compliance question as well as a comp strategy question.
Pay ranges are the structural backbone of modern compensation. Market data (from Radford, Mercer, Payscale, Glassdoor) establishes the external reference; internal leveling establishes the relative position across the job architecture. The 2026 environment has put ranges under the spotlight because pay transparency laws in California, Colorado, New York, Washington, Illinois, and others now require disclosure in job postings. Badly designed ranges embarrass employers and produce candidate flight; well-designed ranges signal discipline and let recruiters work faster.
How Pay Ranges Get Designed
The standard approach anchors each range to market percentiles (often 50th or 60th percentile as midpoint) with a spread of 30-50% from minimum to maximum. Experienced employers build wider ranges at senior levels and narrower ranges at entry levels.
Pay Transparency and the 2026 Landscape
State laws in California (SB 1162), Colorado (EPEWA), New York, Washington, Illinois, and Hawaii require pay range disclosure in job postings. The penalties for non-compliance range from fines to private rights of action. Employers with multi-state workforces usually standardize on the most stringent jurisdiction. See compensation for broader design context.
Where Pay Ranges Show Up in HR Decisions
Ranges drive offer letters, promotion comp adjustments, merit cycle increases, and annual market refreshes. The biggest operational friction is mid-range employees who hit the max and have no room for a merit increase without re-leveling or re-ranging.
Running Pay Range Strategy in a Transparent Market
Update ranges at least annually against market data. Communicate ranges clearly to employees and candidates. Train managers on how to talk about ranges without making promises. Pair range discipline with employee retention and payroll analysis to catch compression issues early.
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