Artificial intelligence is incredibly useful during the hiring process. But should you let it decide salaries, too?
EXPERT OPINION BY KOLAWOLE ADEBAYO
AI has quickly made itself useful across hiring. It can sift through résumés, draft a job description in seconds, and match a role to market benchmarks. For a small company that never had a compensation team, that’s a genuine unlock.
But things get thornier when AI has a say in what the actual salaries that companies pay their employees should be. And that’s the bigger question that founders now have to grapple with—whether they should let AI set the number itself. That pressure is only growing, and this year it found a sharp edge in the law.
On October 8, 2025, California outlawed a hiring
On October 8, 2025, California outlawed a hiring shortcut that employers had leaned on for years. When Governor Gavin Newsom signed SB 642 into law, effective January 1, 2026, the state redefined what a “pay scale” in a job posting is allowed to be: a good-faith estimate of what an employer expects to pay a new hire. The point, as the law firm Morgan Lewis noted, was to stop employers from posting “meaningless pay scales simply to be in compliance.”
So the old dodge is dead. Post a range wide enough to protect yourself, say from $80,000 to $200,000, and you’re not being cautious. You’re non-compliant.
Weekly roundup of the latest in tech news
California isn’t alone, and these rules don’t only apply to big companies. As of early 2026, more than a dozen states now require employers to disclose pay, and the thresholds reach startups, not just giants. In Colorado, a single employee is enough to trigger disclosure, while New York City draws the line at four; states like California, Illinois, and Washington set it at 15.
For founders who have always set pay based
For founders who have always set pay based on their instincts, that guess is now a public document, and the person most likely to read it closely is the employee who already holds the job. And not just them: everyone doing similar work will see the number too, and measure themselves against it.
The problem was always there
Improvised pay stays invisible while it works, and it works right until two people doing the same job discover they earn thousands apart, or a strong hire leaves for a competitor who bothered to benchmark the role when you didn’t.
Source: www.inc.com
