Feb 1, 2023
Pay Transparency Is Spreading as Bills Crop Up From Hawaii to Vermont
(Bloomberg) -- Bartenders at Hawaii’s beachside resorts and commodity traders in Chicago could soon get a better idea of what their colleagues and peers are earning as proposals to boost pay transparency multiply across the US.
At least nine states and municipalities have introduced legislation to add new rules or bolster existing requirements to disclose good-faith salary ranges in job listings, and more are expected to follow, said Christine Hendrickson, the vice president of strategic initiatives at Syndio, which provides software that helps employers identify pay disparities.
In addition to Hawaii and Chicago, regulations are under consideration in Connecticut, Massachusetts, New Jersey, Vermont, Virginia, West Virginia and Washington, DC, she said.
“It’s very clear pay transparency is not going away, and when I look at some of the laws being introduced, they are really pay transparency on steroids,” Hendrickson said in an interview.
Lawmakers are betting that by forcing companies to advertise pay ranges, women and people of color will get the information they need to lock in more competitive salaries. Women make 83 cents for every dollar earned by men — a gap that’s persisted for the past decade. For certain minority groups, the disparity is much worse, US data show.
Colorado was the first state to enact a mandatory pay-transparency measure for job listings, which took effect in 2021. Similar rules followed in New York City, California and Washington state. A New York state law will join them in this September. Other states, including Maryland and Nevada, only require employers to provide salary ranges on request or to candidates applying for a position.
Companies are adjusting, with some embracing the concept and others still struggling with the level of openness around pay, said Tauseef Rahman, a partner at consultancy Mercer. When New York City’s law took effect in November, a Bloomberg News analysis found salary ranges that spanned more than $100,000.
It took about three years for companies to adapt to rules prohibiting employers from asking candidates about their past salary history, Rahman said. He expects a similar adjustment period for pay-disclosure requirements.
Chicago introduced a proposal more than a year ago to require salary ranges for job postings, but it hasn’t advanced in city council. City lawmakers, called aldermen, have until May to take action, according to a staff member. The regulation would also require employers to make a good-faith effort to ensure employees are aware of opportunities for promotion. Aldermen Gilbert Villegas and Daniel La Spata, who introduced the measure, said they continue to support it.
The proposal will allow historically underpaid people “to seek or accept jobs that better reflect the pay they deserve, thus closing the inequitable pay gap,” Villegas said in a statement. “Now it is time to make this a reality for Chicago.”
Some pay-transparency proposals go well beyond the laws enacted in other states. A measure proposed in Hawaii would not only mandate salary disclosure with job listings, but would also require companies to repost a listing if the previously advertised range changes before a hire is made. Companies would also have to send employees an annual update on the salary range for their job and for roles that are substantially similar.
Connecticut, which already allows job applicants to request pay ranges, would make it mandatory to post that information with all listings under a proposal by Democratic State Rep. Amy Morrin Bello. Many people aren’t aware that they can request salary information for a posted job or may be uncertain where to ask, she said.
“I’ve heard from people the frustration they have when they’re job hunting. You’re looking at a job thinking ‘Oh my gosh, this job sounds great,’” Morrin Bello said in an interview. “All of a sudden you find out, ‘Well, geez, this job is paying a salary that I’m not interested in.’”
Other pay-transparency measures under consideration include:
- Massachusetts would require salary ranges for job postings and for existing workers.
- New Jersey has a pair of possible new laws, one of which makes salary ranges mandatory with all postings and another in which such disclosure is only upon request.
- Vermont’s proposed law would make pay disclosure mandatory.
- Virginia and West Virginia would only require disclosure as part of the hiring process, not in listings.
In Washington, DC, a proposed rule that would require employers to include salary ranges with job postings made it to public hearings in December and is set to be re-introduced this year by council member Trayon White, his chief of staff said in an email this week.
“We’re seeing advocates, legislators, companies across the country really identify pay transparency as a leading tool for closing the pay gap, and helping to recruit and retain talent,” said Andrea Johnson, director of state policy for the National Women’s Law Center, who spoke in favor of the DC law in the December public hearing.
Companies have many incentives to post salary ranges, especially to attract younger workers who often won’t even entertain a job that doesn’t post the salary, she said. And while there are outliers, most companies are complying with the new laws as they take effect. The measures are bringing an end to a long period of secrecy around pay, she said.
They’re helping to “incite further cultural change with the understanding that we can discuss our pay freely,” she said. “I can go to my employer and talk about my pay and not worry about them retaliating against me.”
--With assistance from Sophie Caronello.
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