Pay Transparency laws already enacted or proposed in numerous states and local jurisdictions require employers to be transparent with salary ranges and benefits. Depending on the jurisdiction, these laws require employers to provide job applicants with a salary range for a posted position at a specified point in the hiring process and provide existing employees with salary ranges when changing jobs or at hiring.
Below is a list of states and local jurisdictions that currently require pay range disclosures, along with links for more information.
Salary Transparency Trends
Massachusetts, New York State, and South Carolina have pending salary transparency legislation. And other states are expected to enact similar legislation during 2023. All strong indicators are that the trend to expand existing and new legislation relating to salary transparency will continue at a moderate pace.
California and New York, major employment hubs for large companies, are already setting a standard that will shift the balance of power in the enigmatic world of salary negotiations by providing job candidates and employees with illuminating information. In addition, younger adults entering the workforce are challenging the long-standing tradition of banning discussions of pay and salaries.
Disclosing salary ranges is something that many companies fear will not only provide competitive information to rivals but also hinder their ability to negotiate with a potential employee for a lower salary. In addition, employers feel including salary ranges in job postings may prevent some well-qualified candidates from applying.
On the other hand, knowing the pay range upfront can help streamline the hiring process. Job seekers on a specific compensation range may overlook a potential opportunity if the salary range is not evident. In addition, providing a salary range in a posting allows candidates the opportunity to opt out of applying for jobs below their range which will effectively filter out candidates that are not willing to take the position.
In the event a job posting with a salary range doesn’t generate a large enough candidate pool to fill a position, employers may need to perform a pay equity audit and analysis to make sure they are paying fairly for comparable work and performance. Establishing an infrastructure that creates a level playing field for all workers will help retain employees and attract talent for open positions.
Posting a salary range for a job can also be an advantage when negotiating with a candidate
seeking an above-posted range for the position. Having a preset salary range for a position can give employers bargaining power because it not only sets the base for compensation negotiations but also sets a ceiling.
Employers Next Steps
With about 20% of the U.S. population living in states requiring pay transparency, not including salary ranges in job postings may be a competitive disadvantage. Companies that compensate fairly and are willing to take the lead by making wages more transparent stand to benefit the most by generating greater job seeker engagement and building leadership trust with existing employees to boost productivity and reduce turnover rates.
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