Clarity is coming for jobseekers in some states as new laws go into effect requiring certain employers to provide salary ranges to candidates in the job posting or during the interview or salary negotiation process.
Pay transparency can take many forms, from including salary ranges on job postings, providing pay and benefits information for positions within the company (including information about why and how pay decisions are made), to facilitating open discussions among co-workers about their salaries.
For many employees, open discussion of salary is already protected by law. Under the National Labor Relations Act, covered employees have the right to communicate with other employees at their workplace about their wages. However, some companies have specific policies that prohibit employees from discussing pay during working hours or while using company devices or company communication platforms (i.e., social media). And some employees find talking about pay and benefits uncomfortable.
But information can be powerful, especially salary information. Building upon salary research from third-party sites like Salary.com, Glassdoor.com, and similar sites (including industry-specific websites), some jobseekers will now have access to company-provided data about pay ranges. Jobseekers have traditionally been advised to request a salary range from a prospective employer, but now this information is required by law to be given to them in some jurisdictions.
One of the most significant outcomes from the legislation is the potential to standardize compensation, especially for new hires versus longtime employees.
In many states and jurisdictions, pay transparency initiatives are linked to larger “pay equity” issues, including gender equity for salaries and wages.
In addition to reducing gender pay inequity, a survey from Indeed.com found that a full 75 percent of jobseekers say they are more likely to apply for a job if the posting includes a salary range.
However, salary is just one component of total compensation. Jobseekers are still advised to consider benefits and non-salary perks of employment when considering a job offer. In addition, jobseekers should consider applicable local laws (city and state) before disclosing salary history to a prospective employer. In several areas, employers are prohibited from asking about previous compensation; however, if it is voluntarily disclosed by an applicant, the information can be used to determine a starting salary or wage.
In addition to the laws listed, salary transparency laws have been proposed in Alaska, Massachusetts, Michigan, South Carolina, and Vermont.
Pay transparency initiatives — including gender-specific pay equity laws, wage disclosure requirements, bans on requesting salary history, etc. can be found on the Pay Equity Map (https://www.fisherphillips.com/pay-equity-map/index.html)
