What Employers Need to Know
On April 28, 2025, the Cleveland City Council passed Ordinance No. 104-2025, introducing significant changes to hiring practices for employers within the city. This legislation mandates pay transparency and prohibits salary history inquiries, aiming to promote equitable compensation practices. Ordinance No. 104-2025 is currently pending the approval of Mayor Justin Bibb and will take effect six months later, likely in November 2025.
Key Provisions of Ordinance No. 104-2025
Ordinance No. 104-2025 applies to employers operating in the City of Cleveland with 15 or more employees. This includes the City of Cleveland as an employer, but all other units of local, state or federal government are not included as “employers.” The ordinance introduces two primary requirements.
First, the ordinance mandates that employers include a salary range or pay scale in every job posting. This includes all forms of compensation—whether hourly wages, salaries, commissions or other expected earnings. The purpose is to provide applicants with a transparent view of the compensation offered, which can empower candidates to make informed decisions and help address wage inequities.
Second, the ordinance prohibits employers from inquiring into or relying on an applicant’s salary history at any stage of the hiring process. Employers may not ask applicants about their current or past compensation, use such information when making hiring decisions or screen applicants based on it. Employers are also barred from retaliating against individuals who refuse to disclose salary history. However, the ordinance does allow discussions about salary expectations, and applicants may voluntarily share salary history if they choose to do so without coercion or prompting.
There are a few important exceptions. The law does not apply to internal promotions or transfers, to individuals being rehired where their salary history is already known or to independent contractors. It also does not apply to positions subject to collective bargaining agreements, where pay rates are determined through union negotiations.
To enforce compliance, the ordinance empowers the City’s Fair Employment Wage Board to investigate complaints and impose penalties. Civil fines escalate depending on the number of violations: $1,000 for the first offense, $2,500 for the second, and $5,000 for the third within a five-year period. Complaints must be filed within 180 days of the alleged violation.
Action Steps for Employers
With the passage of Ordinance No. 104-2025, employers should consider taking the following steps to prepare for compliance.
- Review and Update Job Postings: Ensure all job advertisements include clear salary ranges or scales.
- Revise Hiring Practices: Remove any inquiries about salary history from applications and interview processes.
- Train HR and Recruitment Teams: Educate staff on the new requirements to ensure compliance during the hiring process, particularly on how to respond to candidate inquiries and voluntary disclosures in a compliant manner.
- Audit Compensation Policies: Assess current compensation structures to align with the ordinance’s objectives and promote pay equity across roles and demographic groups.
Conclusion
As enforcement mechanisms are expected to become active following Ordinance No. 104-2025’s effective date, likely in November 2025, proactive compliance is the best strategy for avoiding penalties and maintaining a positive employer brand in a competitive hiring market.
For questions regarding Ordinance No. 104-2025 and how it may impact your business, the attorneys in KJK’s Labor & Employment Practice Group are always available to help. Please call us at 216.696.8700