Eight states and a handful of cities mandate that employers practice pay transparency. Expect that list to grow as legislation is on the drafting board in other states and – more importantly – talented job candidates expect it from the companies they’re considering.
Pay transparency laws require that employers openly share hourly or salary ranges for positions with job applicants, and in some cases with their own employees. HR Morning notes that pay transparency helps to “reduce the pay gap between men and women … [and] reduce pay inequities in a broader way, such as by preventing discrimination based on other protected categories like age and religion.”
To date, eight states have enacted pay transparency laws: California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island and Washington. These cities also enacted laws: Jersey City, New Jersey; New York City; Ithaca, NY; and Cincinnati and Toledo, Ohio.
California’s law is arguably the strictest. Employers in the Golden State are prohibited from relying on job candidates’ salary histories to determine whether to hire them, or seeking candidates’ pay histories.
Up-to-date, realistic salary ranges matter most
“Being transparent about pay fosters trust with employees and shows them you are committed to preventing improper wage gaps,” advises HR Morning. “And that’s a big win for employers in the ever-ongoing battle to find and retain top talent.”
Many HR professionals agree with that sentiment. Some argue that setting a salary range can shrink the pool of candidates who apply. If the goal is to herd resumes, then yes, being deliberately vague about a position’s salary range is the way to go (sarcasm intended).
If the goals are to attract and not waste valued job candidates’ time, then pay transparency is a no-brainer. So is reviewing pay ranges from time to time to make sure they’re realistic and in the ballpark with what competitors are willing to pay.
Tip: A salary range of $35K to $90K for the same position isn’t realistic or transparent. Companies do it all the time though, based on countless threads on Reddit.
HR should set salary ranges for positions that help their companies maintain a competitive edge and, if they’re located in the areas listed above, comply with pay transparency laws.
