New York City is leading the way again. This month, the New York City Council passed a regulation requiring employers to post salary details in their job ads. This pay transparency is part of a larger movement to discard the tradition of keeping salaries under wraps. When the law takes effect in November*, employers will have to publish the minimum and maximum salary range for jobs based in the city.
Pay discrimination is illegal, but there is plenty of data that shows it’s occurring. As a result, many states are banning the practice of asking for a candidate’s salary history—and the number of states is growing. Even with these movements to level the playing field, employers still have the upper hand in compensation negotiations. How will pay transparency change things in the future?
*Originally, this law was supposed to take effect in May of 2022. The deadline to implement has been extended to November 2022. However, we recommend staying ahead of the curve by adding salary details to your job ads now.
What are the Goals of the Pay Transparency Movement?
It’s often hard for job candidates to find out salary information upfront. Traditionally, talking about salaries after you’ve been hired is also frowned upon. But whether you are a candidate, employee, or employer, pay transparency is a movement that you should pay attention to.
The goal of the movement is to create a new kind of contract between the employee and employer where the balance of power evens out. This will help people of color and women receive the pay they deserve and eliminate some of the discriminatory practices that we’ve seen employers engaged in.
It’s not just for the benefit of employees; The pay transparency movement is good for employers too. It should cut down on discrimination claims and create a more open environment that will entice a great flow of candidates to your organization. It helps employers with retention and creates clarity around the formerly touchy subject of pay.
So far there are at least eight states or cities in addition to New York City that have some sort of pay transparency laws on the books, including:
- Ohio (Toledo and Cincinnati only)
- Rhode Island
We expect more locations to follow NYC’s lead in the coming months.
How does Pay Transparency Benefit Me?
The main benefit of pay transparency is that the employee understands their economic value to the company, potentially in comparison to others on the team doing similar work. When viewed from this angle, pay transparency has the potential to eliminate the wage gap. Women still earn about 84% of what men make in the same job. Pay transparency shines a light on these injustices. The same is true for racial, ethnic, and identity groups. It shows a level of respect for employees and the value they bring. Pay transparency also benefits the employer by allowing them to attract a more diverse workforce if their pay scale is appropriate to the job.
Pay transparency also saves time by eliminating or reducing the need for salary negotiations. Studies show that women are less likely to negotiate. Pay transparency eliminates these inequities. But what about remote workers? Some companies are hiring remote employees and placing language in their ads that excludes performing the work in the state with the pay transparency law. Still, others are just rolling with these new laws and adapting to them as they evolve. Either way, Money Magazine suggests, “Transparency…is a starting point, not a solution” and that starting point, we hope, will eventually allow us to arrive at a more equitable and fairer place.
Premier Talent Partners offers employers a skilled resource for finding their missing talent. For workers, we match culture, skills, and salary expectations to improve your workforce. We can help you, too. Contact us.