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Pay Transparency Laws Gaining Ground in North America

by Veronica Blatt

Effective today, certain employers in New York City will be required to include salary ranges for job postings. This is the newest of a host of pay transparency laws that have gone into effect in North America, with more sure to follow. These laws, in combination with laws that prohibit employers from asking about a candidate’s salary history, are intended to fight the gender pay gap as well as historically low pay rates for workers of color. Similar laws are in effect, or will be soon, in places like Colorado, California, and Washington.

These laws include a wide range of posting methods and also extend to remote applicants / remote positions. For example, if an employer in Minnesota posts a job that is located in New York City or a remote job that could be performed by someone in New York City, the salary range will be required in most instances. So the effects of what seems to be a locally-focused law will actually be quite far-reaching based on the realities of remote roles and workers.

Some research indicates that a majority of job seekers want to know the pay range of a job before applying. More than half said they would *not* apply for positions that do not include salary information. In a candidate-short market that is expected to continue for some time, employers cannot afford to alienate potential employees. Job seekers do not necessarily know what the market rate is if they would be relocating for a new opportunity, and they don’t have great resources for learning this information either.

In the short-term, this may result in pay compression issues as workers within a company start to understand what their co-workers are being paid. It has been difficult at times for employees to know if they were undergoing pay discrimination. More companies will need to do salary audits and develop plans to remediate pay discrepancies. There will almost certainly be growing pains as employers learn the new compliance requirements of these pay transparency laws. Employers are advised to seek appropriate legal counsel as needed.

 

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Tags: pay transparency | Posted in: Employers

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