pay transparency

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Starting May 15, 2022 New York City employers with four or more employees must post salary ranges in job advertisements. This is an amendment to the NYC Human Rights Law and considers excluding minimum and maximum salaries from NYC based positions “unlawful discriminatory practice.” This bill passed with a vote of 41 -7 reflecting how clearly the legislators are hearing that employees and job seekers want pay transparency.

NYC is not the only jurisdiction passing legislation supporting pay transparency but there are slight variations in the requirements.

Maryland and Washington require employers to disclose the pay range for a position when requested by an applicant. In California an applicant who has been interviewed may request the pay range for that position. Nevada requires employers to provide salary ranges for any applicant who has been interviewed even if they don’t request it. Connecticut employers must disclose the wage range upon the earlier of the applicant’s request or when a job offer is made. Toledo and Cincinnati require employers to provide the salary scale for a position if an applicant has received a conditional offer or if they request the information. Rhode Island’s law goes into effect on January 1, 2023 when employers must provide applicants with the position’s salary range upon the earlier of the applicant’s request, when the employer is asking about an applicant’s salary expectation or when an offer is made. NYC’s law is most similar to Colorado. The pay range must be available for both internal and external postings and must be in every advertisement.

There is some ambiguity to the new law. Salary is undefined. Does it include base pay or base pay and all other bonuses and benefits? What if a job is with a NYC employer but the job seeker will be performing the work outside the city limits? What are the penalties for non-compliance with pay transparency?

A survey by Visier found that 79% of employees want pay transparency. There is generational variation in comfort level when discussing salary in the workplace. Visier found 89% of Gen Z were comfortable discussing their salary with others, while only 53% of Baby Boomers were comfortable. Since the internet is driving much of this conversation on pay transparency the generational difference makes sense. The increasing ease of access to compensation data on the internet is creating the significant shift from the traditional belief that pay is a taboo subject to complete pay transparency.

Pay transparency laws exist largely to address racial and gender pay gaps. The average woman in New York makes 86 cents for every dollar a man makes, down from 89 cents in 2015. Employers with four or more workers in the previous year, including part-time, temp and contractors, are covered by this law. Targeting some of the city’s most marginalized workers in the food services and retail industries is driving the importance of this new law.

Interested in finding out how your compensation stacks up in your area of expertise?  Talk to the Executive Recruiters at Smith Hanley Associates.


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