Pay transparency
Pay, wage, or salary transparency involves protecting the right of employees to publicly discuss salary information of either current roles or posted roles. Federal law grants employees the right to inquire about, discuss, or disclose their own pay or the pay of other employees without fear of discrimination or retaliation. This practice, once hush-hush, has gained more public popularity, allowing employees to feel more comfortable discussing their compensation.
The ultimate goal is to shine light on what it means to have equitable pay, by helping workers understand how they are being paid against their worth and fair market value of their skills, and what they need to do to advance in their careers.
As the New York Times reports, more than one-fourth of the U.S. labor force is now covered by salary transparency legislation. These laws mandate that employers disclose salary ranges in job postings, promoting fairness and empowering workers with the knowledge to make informed career decisions.
More than one-fourth of the U.S. labor force is now covered by salary transparency legislation.
Pros of pay transparency
Increases productivity: Employees become more productive when they know how much their superiors make, driving them to achieve similar compensation.
Attracts and retains talent: Transparent pay practices demonstrate a commitment to fairness, helping avoid a salary mismatch from the very beginning of the hiring process.
Ensures fair pay: Reduces the risk of discrimination and pay disparities based on gender, race, age, or other factors.
Enhances company reputation: Companies known for transparency are considered fair and equitable employers.
Legal compliance: It might not be a choice, but complying with the law always looks better than not.
Cons of pay transparency
“Comparisonitis”: Discovering pay disparities can reduce morale and job satisfaction if it leads to a feeling of unfairness.
Competitive disadvantage: Reveals compensation strategies to competitors, potentially making it easier to poach top employees.
Changes negotiations: Employees may use disclosed salaries as benchmarks, which could either make the negotiations more straightforward, or more complicated depending on the range you’ve posted. how are you going to explain $70k-$150k range for a mid-senior role?
Recent pay transparency laws
Several states have enacted pay transparency laws, requiring employers to disclose salary ranges in job postings and provide compensation information to employees and applicants. These laws promote openness in compensation practices.
California
Requires employers with 15+ employees to include pay ranges in job postings and share pay scales with current employees and applicants.
New York
Employers must disclose pay ranges for all jobs, promotions, and transfer opportunities.
Colorado
The Equal Pay for Equal Work Act mandates salary ranges in all job postings, prohibits inquiries about salary history, and requires job postings to be shared with current employees.
Maryland
Employers must provide wage range information to job applicants upon request.
Connecticut
Companies must provide wage ranges to current employees and job applicants and cannot inquire about a candidate’s salary history.
Washington
Requires businesses with 15+ employees to include salary ranges and benefits descriptions in job postings.
“Hell yes I will accept this job because I trust this is a fair offer. I won’t even quiet quit!”
Impact on remote workers
Pay transparency is particularly beneficial for remote workers or hybrid workers, offering several advantages:
Fair pay across locations: This ensures that remote workers are paid fairly compared to in-office employees, addressing potential pay disparities.
Clear advancement criteria: Helps remote workers understand the criteria for raises and promotions, ensuring equal opportunities for career advancement.
Builds trust: Remote workers feel assured that their compensation is based on clear, objective criteria, which fosters trust in management and the company.
Advice for remote workers
Educate yourself: Understand the pay transparency laws in your state to make informed decisions.
Utilize disclosed pay ranges: Use salary information to benchmark your expectations and understand the market rate for your skills.
Negotiate confidently: Leverage disclosed pay ranges to ensure you receive a fair offer reflecting your value. Ask questions curiously and advocate for yourself. In many cases the leverage is on the side of the candidate if they know they need you.
Seek transparent companies: Look for employers who openly share pay information, indicating a commitment to transparency in other areas.
Broaden your job search: Consider remote positions in states with robust pay transparency laws. Or in some cases, it might be the opposite, unfortunately.
Keep records: Document the job postings you apply to, pay ranges, and communications with potential employers for future reference.
Pursue internal opportunities: Look for internal transfers within your current company that offer better pay or align with your career goals.
What do I do when the job says “not available to people living in these states”?
You’ll also find many jobs that don’t allow applicants from these states. It’s frustrating – the reward for a more transparent workplace is to cut off those candidates altogether.
If this is the case, ask yourself if you’d want to work for the kind of employer who finds it easier to discriminate based on location than to just be transparent.
Yes, I’ve been known to choose an alternate state to get past the machines. If only they saw me in the interview, right??
Keep in touch with your federal representatives – if state laws make it harder to get a job, we need them to know this so that federal protections for candidates can be proposed. At least that’s how politics is supposed to work, I think?
What do you do to get through the state issue?
