Pay transparency means that a number of states now require that job postings disclose pay ranges. New York City is joining the trend effective 11/1/2022 – https://www.nytimes.com/2022/10/29/business/nyc-us-salary-transparency.html
For a long time companies strongly discouraged employers from discussing salaries; they still did, but usually in secret. “But a wave of new pay transparency laws means that figuring out how much a job pays is no longer dependent on a handful of fearless colleagues.”
“… companies with at least four workers that post a job that may be performed in New York City will be required to include salary ranges, whether they advertise jobs online, in a job fair flier or on internal bulletin board. Similar laws for job ads have been enacted in Colorado, California and Washington State. And since 2017, four other states have adopted laws requiring companies to disclose a pay range to job candidates at some point in the interview or negotiation process.”
Who Benefits From Pay Transparency?
Who does this pay transparency benefit the most? Women and minorities. “As transparency rules take effect in some of the country’s largest job markets, their proponents hope that pay disparities for women and workers of color will narrow. In 2020, women earned 84 percent of what men earned, according to Pew Research Center, and the gap was wider for women of color. In the federal government, where pay rates are public, women made on average 93 percent of what men earned in 2017.”
“The laws are changing some of the fundamental ways in which companies determine pay and recruit candidates. Some employers realize that they will face a period of disruption as their workers learn what colleagues are making and ask for raises. But many businesses that are already posting salary ranges said that the effects have been potent, exposing disparities and prompting changes in corporate policies.”
“When Colorado enacted its rules that require all employers to include salary ranges on internal and external job posts, Tim Meurer worked as a talent acquisition consultant in the state. At most companies, he said, pay was not consistent across positions, partly because recruiters had ‘an open checkbook’ when they made offers. They hired candidates at the lowest price they could get them, regardless of the role’s target range.”
The new law is expensive because “companies were getting away with underpaying people”.
People Apply For Roles With Salary Ranges
“Studies have shown that people are more likely to apply for roles that include salary ranges. About 60 percent of job postings on Indeed include salary information, and those that do see about 30 percent more people starting applications. Three-quarters of job seekers say they’re more likely to apply for a posting that includes a salary range, according to an Indeed survey from April.”
Salary transparency law forces companies to open the conversation about their paycheck structure and move toward treating people more fairly.
Career Counseling with Elaine
I bring extensive personal experience of working at various management levels in the corporate world to my counseling practice. Together, we can identify what is successful and what needs to change to improve your career situation. We can strategize alternative communication options and process feelings or past experiences that prevent you from moving forward. I also specialize in Financial Therapy and help clients make more informed decisions related to their salaries.