Remote Pay Policy Tiers: Tier 1, Tier 2, and Remote Salary Bands

Why One Salary Range Often Isn't Enough

Your recruiting team posts a senior accountant role on a Tuesday morning. Within 48 hours, you have applicants from San Francisco, Columbus, and rural Vermont. The same job title. Three very different labor markets. One salary range in the posting.

If your company has employees — or even one remote worker — in Colorado, California, New York, Washington, Illinois, New Jersey, Massachusetts, or Washington D.C., that single posted range isn't just a policy inconvenience. It's a compliance exposure. Each of those jurisdictions requires that a job posting include a salary range that reflects the actual pay for the work being performed there. A range anchored to your San Francisco office that doesn't reflect Columbus market rates may be technically non-compliant for an Ohio-linked posting in a state that requires it — or it may simply be indefensible to a candidate, an auditor, or an employment attorney who asks how you arrived at it.

The answer most mid-size employers land on eventually is a remote pay policy tier structure: a formal, documented method for assigning each location to a pay tier and building a corresponding salary band for each tier. By the end of this article, you'll understand how to design those tiers, anchor each one to authoritative wage data, and document the methodology so any range you post is defensible.

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What Remote Pay Policy Tiers Actually Are

A remote pay policy tier is a defined geographic category to which locations are assigned, each carrying its own salary band (or range adjustment) for a given role. The tier determines which labor market your company uses as the benchmark when building the range.

Three tiers cover the majority of employer needs:

• Tier 1 — Major Metro / High-Cost Markets. Typically includes the highest-cost labor markets where you compete intensely for talent: San Francisco Bay Area, New York City, Seattle, Boston, Washington D.C., Los Angeles. Ranges are anchored to metro-level BLS OEWS data for those specific areas.
• Tier 2 — Mid-Market / Regional Metros. Secondary cities and surrounding regions — Denver, Austin, Chicago, Atlanta, Raleigh, Phoenix — where wages are meaningfully lower than Tier 1 but meaningfully higher than a fully rural baseline. Ranges are anchored to state-level or regional-metro BLS OEWS data.
• Remote/Anywhere — Non-Metro or Unspecified Location. Roles where the employee works from a location without a designated company office, in a market your Tier 1 and Tier 2 definitions don't cover. Ranges are often anchored to national BLS OEWS figures or to a blended state-level figure from lower-cost states in your workforce footprint.

A salary band (also called a salary range or pay band) is the structured min–mid–max for a role at a given tier. The midpoint is the wage the company considers market-competitive for a fully proficient employee in that tier; the minimum and maximum are set by applying a range spread — the percentage distance between the band's floor and ceiling, expressed as a share of the midpoint. A 50% spread on a $90,000 midpoint, for example, produces a band of approximately $67,500–$112,500.

The tier structure means a single role can have three published bands — each grounded in a different geographic market, each defensible, each consistent with the company's stated methodology.

For a deeper explanation of how geographic differentials are calculated in the first place, see our guide to geographic pay differentials.

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How to Anchor Each Tier to BLS OEWS Data

The BLS Occupational Employment and Wage Statistics (OEWS) program is the primary public source for this work. It produces annual wage estimates for more than 800 occupations — tagged by Standard Occupational Classification (SOC) code — at the national, state, and metropolitan statistical area (MSA) level. The program samples approximately 1.1 million establishments (BLS, May 2025). The May 2025 national and state estimates were released May 15, 2026 (BLS, 2026); confirm the newest live release and the specific MSA detail you need at bls.gov/oes.

BLS OEWS reports wages at five percentiles: the 10th, 25th, 50th (median), 75th, and 90th. A percentile is the wage below which a given share of workers in that occupation and geography fall — so the 50th percentile (the median) means half of workers in that job and location earn below that figure and half earn above it. For range-building, the 50th percentile is typically your Tier's midpoint anchor; the 25th and 75th define a natural band width if you choose to use them directly rather than applying a fixed spread.

A worked example (illustrative — inputs are real library figures; the tier adjustment steps are method demonstration):

Take software developers (SOC 15-1252). The national median is $133,080 (BLS OOH, May 2024). At the MSA level for a major metro like San Francisco or Seattle, that figure is materially higher — confirm the exact MSA figure at bls.gov/oes before setting your Tier 1 midpoint. For this example, assume your Tier 1 anchor (pulled from the MSA OEWS table) is $158,000 and your Tier 2 anchor (state-level, e.g., Colorado or Illinois) is $140,000. Your Remote/Anywhere tier might use the national median of $133,080 as its midpoint.

Applying a 50% range spread to each midpoint:

Tier	Midpoint	Band Min (−25%)	Band Max (+25%)
Tier 1 Metro	$158,000	$118,500	$197,500
Tier 2 Regional	$140,000	$105,000	$175,000
Remote/Anywhere	$133,080	$99,810	$166,350

This is a worked example demonstrating the method. Tier 1 and Tier 2 midpoints are illustrative placeholders — pull your actual figures from the BLS OEWS MSA and state tables at bls.gov/oes (BLS, May 2024 or the most recent release). The Remote/Anywhere midpoint uses the real national median from BLS OOH, May 2024.

This is what a defensible remote pay policy tier structure produces: three different, internally consistent bands for the same role, each traceable to a named geography and a named dataset with a reference year.

For a step-by-step walkthrough of the full range-building process, see how to build a salary range.

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Designing the Tier Structure: Key Policy Decisions

Building the bands is the quantitative half of the work. The policy half — decisions your leadership team and legal counsel need to sign off on — is equally important.

1. Define tier boundaries explicitly and in writing. "Major metro" means nothing if it isn't defined. Your tier policy document should list, by name, which MSAs or states fall into each tier, and how new locations are assigned. A common framework: Tier 1 = a defined list of MSAs where the BLS OEWS median for your core occupations exceeds a threshold you set (e.g., 110% of the national median); Tier 2 = MSAs or states between 90% and 110%; Remote/Anywhere = everything below 90%, or locations not otherwise listed.

2. Decide whether tier assignment follows the employee's work location or the office location. This matters most for remote employees. Most employers anchor the range to where the employee performs the work — not where the company's HQ is. This aligns with how pay-transparency laws are typically written: the range should reflect the compensation for the work being performed. Confirm the approach with counsel for your specific jurisdictions.

3. Determine your range spread by job family, not just by tier. A range spread is wider for senior, harder-to-define roles (sometimes 60–80%) and narrower for well-defined, lower-complexity roles (sometimes 40–50%). Applying a flat 50% spread across all job families is a reasonable starting point; refining by family produces more defensible bands. Note: New Jersey's proposed regulations suggest that the spread between minimum and maximum may be no more than 60% of the minimum (Saiber LLC, 2025) — confirm the current rule with the New Jersey DOL or counsel before finalizing any NJ posting.

4. Document how the tier assignment is made, and keep the record. Several transparency-law jurisdictions require that you retain posting records. Illinois, for example, requires employers to retain pay-scale and posting information for each position for five years (Greenberg Traurig / Illinois DOL, 2024). Ontario requires retention of each publicly advertised posting for three years after it is taken down (HRPA, 2026). Your tier-assignment methodology — which geography you used, which BLS OEWS release year, which spread you applied — is part of that record.

For more on the compliance layer that tier structures must satisfy across multiple states, see multi-state hiring compliance and our guide to building location-based range sets.

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Posting Compliant Ranges Across All Three Tiers

A tiered structure only reduces compliance exposure if each posting reflects the correct tier's range for the location it covers. That means your posting workflow needs to answer: Where will this work be performed, and which tier does that location belong to?

For roles explicitly open to applicants in a covered jurisdiction, post the range for that jurisdiction's tier. For roles posted as "Remote, US" with no location restriction, several jurisdictions take the position that if a Colorado (or California, Washington, or other covered-state) resident could apply, the posting must carry a compliant range. Confirm the current guidance for each jurisdiction with the relevant authority — the Colorado CDLE, the California DIR, Washington L&I, the Illinois IDOL, the New Jersey DOL, the Massachusetts AGO, or the New York State DOL — or with employment counsel, before acting on any single interpretation.

The practical implication: a "Remote, US" posting may require you to post your Remote/Anywhere band (or the highest-applicable-state band) by default, precisely because you can't control which covered-state applicants will see it. That is an argument for building all three tiers before you post, not after.

For a broader overview of how pay-transparency requirements interact with multi-location hiring, the salary range resource hub collects the key guides by jurisdiction.

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Building and Maintaining Tier Bands at Scale

The operational challenge with a three-tier structure is maintenance. BLS OEWS data is updated annually; MSA-level figures shift; your workforce footprint expands into new states; a new law goes live in a jurisdiction you hadn't tracked. A tier structure built in a spreadsheet and updated manually once a year is better than nothing — but it creates exactly the kind of audit-trail gap that an employment attorney's document request will surface.

What a well-maintained tier system needs:

• A named BLS OEWS release year watermarked to every band (so you can show, in a review, exactly which data vintage was in effect when the posting ran).
• A record of which SOC code was used for each role (SOC code and job title don't always map one-to-one — document the mapping).
• Version control on the policy document (who approved it, when, and what changed).
• A defined refresh cycle — at minimum, annually, after the BLS OEWS update.

If your team is currently maintaining tier bands in a spreadsheet, the Job Leveling Framework Template at the Salary Range Builder store gives you a structured starting point: pre-built tier columns, SOC-code mapping fields, spread-calculation formulas, and a documentation layer designed to survive an audit.

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Putting the Structure to Work

A remote pay policy tier structure is not primarily a cost-control mechanism (though it can be used that way). It is a methodology framework — a documented, repeatable answer to the question "how did you arrive at this range?" For a 25–100 person company without a dedicated compensation function, that answer needs to be auditable, current, and consistent across every posting.

The sequence is straightforward: define your tiers and their geographic criteria, pull the relevant BLS OEWS figures (national, state, MSA) for each occupied job family, apply your range spread, document the inputs and the release year, and build the posting workflow so the right tier fires for the right location. Revisit the bands at least once a year when the BLS OEWS update drops.

Salary Range Builder's Professional and Business plans automate the BLS OEWS data pull, apply geographic adjustments by MSA or state, and generate multi-location range sets — each with a data-vintage watermark and a downloadable PDF your counsel can review. The Business tier supports custom per-family range spreads and multi-location range sets in a single workflow.

Start a 14-day free trial at salaryrange.com/features to see how the tier structure works in practice — no setup call, no commitment.

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Wage data in this article is drawn from the BLS Occupational Employment and Wage Statistics (OEWS) program, May 2024 reference period (BLS OOH, May 2024), and the May 2025 national release (BLS, 2026). Always confirm the most current figures at bls.gov/oes. Pay-transparency law requirements, effective dates, and penalty figures change frequently — verify the current rule for each jurisdiction with the relevant issuing authority or with employment counsel before acting.