Pay Transparency & Equity on the Rise

There are few things more annoying as a job-seeker than being expected to go through most of the application process before a pay range is even mentioned. And there are few things more frustrating to the employed than learning that those around them with similar qualifications, experience, and responsibilities are receiving disproportional compensation.

Both sentiments – the desire for pay transparency and pay equity – have been driving changes in legislation across the United States, and they're picking up steam with no signs of slowing down. Your state may already have new transparency and pay equity laws in effect. Read on to learn more.

Workers are Talking about their Pay

Not long ago, it was a cultural norm (encouraged mostly by employers who stood to benefit from it) to consider matters of compensation a private matter not to be discussed. In recent times, fueled by the tools of the information age, a greater emphasis on equity, and dissatisfaction with stymied pay increases, workers have dispensed with this taboo and are encouraging one another to do just the opposite. And they've been handed a megaphone in doing it by platforms like Glassdoor, Indeed, and others, making their voices widely accessible. Make no mistake – more than ever, workers know their worth and expect to receive it.

Lawmakers Side with Workers

The public sector has long fostered a norm of public salary information. And in many industries, the government protects the right to discuss wages by law under the National Labor Relations Act. Additionally, in response to the desires of job-seekers and in the interest of equity, state lawmakers are increasingly taking things further and requiring additional pay transparency across all industries within their jurisdiction.

In 2016, California passed the Equal Pay Act, which requires (among other things) that employers must provide pay ranges to candidates who ask for it after their first interview for a job. More recently Colorado’s Equal Pay for Equal Work Act went into effect, mandating that all job postings must include pay ranges. Significantly, this applies to remote job postings that might be filled by Colorado workers if the company has any employees working there. With remote work having increased vastly in popularity in recent years because of the Coronavirus pandemic, this has prompted an increase in job postings with pay ranges across the country regardless of the company's location for the sake of universality.

Similar laws have recently passed or gone into effect in Maryland, Nevada, Rhode Island, Connecticut, Washington, and New York City.

Other states and cities already have pay transparency laws on the books as well, and more will likely follow. Among other requirements, common stipulations include mandating the provision of salary ranges to applicants, and/or forbidding the request for salary histories from candidates. Some equity laws include other provisions too, such as a requirement to notify current employees of opportunities for promotion.

What this Means for Employers and Job-seekers

Like it or not, discussions about pay and pay equity are coming to your workplace.

Employees and applicants should take the time to familiarize themselves with their rights based on the state in which they or their prospective employers are located. Anyone involved with hiring or management should take the time to familiarize themselves with the laws around pay equity and transparency in their area and those from which they wish to hire remote workers, and they should be sure to keep up with new legal developments on the topic, which are likely to continue. If necessary, they should be able to discuss pay structures and how they're determined with candidates and current employees.

Even in areas without such legal provisions, be aware that the popularity of these laws signals trends that applicants may soon come to expect: increasingly, providing a salary range early on is in, and asking candidates about past salary history is out. Employers who want to attract and retain employees will need to be aware of developing norms, and act appropriately. Most importantly, the age of writing “competitive wages” on job postings – instead of actually providing them – may be coming to a close.

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