Relatively new salary transparency laws require employers to disclose the salary range for a vacant and advertised position.
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According to Jenn Lim, global workplace expert, speaker, business consultant and CEO of Delivering Happiness, “These laws, which are increasingly being adopted in states across the United States, empower employees and aim to address gender and racial pay inequalities. Although not the ultimate solution, it is a step in the right direction.
With that in mind, let’s take a look at the different aspects of the laws and what they might mean for job seekers.
Level payment field
The need for such laws arose when legally protected groups categorized by race, age and sex, etc. were found to be paid less than their white counterparts under 40, according to Linda VanDeventer, vice president of compensation and career strategies practice at Segal. .
“Pay transparency laws are each written with different rules. These laws may require salary ranges in job postings, require salary ranges for employees considered for promotions, require job descriptions to be provided, and require bonus/incentive program descriptions to be provided,” a she declared.
“It’s a victory for employees, they now have more rights. You have gained increased knowledge of how a job is rated by the specific company you plan to work for. Knowledge is power. More knowledge means you have more facts to use to navigate the application process and negotiate the best deal,” she added.
These laws may be less critical for jobs with a single point of hire, such as teachers, firefighters, nurses, unionized employees, who are typically paid based on a “per steps,” says VanDeventer.
Which states have them?
Currently, only a few states have pay transparency laws, including Colorado, which was the first state to roll them out. California, Connecticut, Maryland, Nevada, Rhode Island, Washington and New York have recently joined Colorado, and more may soon follow.
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A requirement for clarity
Pay transparency is part of a demand for clarity and fairness and a call for more inclusive work cultures that support everyone, not just a few.
According to Lim, “With more policies and laws in place, we are finally seeing the needle move on wage inequality. This will help put money in the pockets of women and communities of color. However, it is important to think about how employers and employees navigate these discussions. »
Implications for unequal wages
One of the downsides of these laws, no matter how well-intentioned, is that some employers could face legal repercussions for unequal wages and disgruntled employees could quit, Lim said. “There could be workplace tensions or unrest that hurt morale and productivity when workers realize they have been paid less than their counterparts.”
A subjective practice
Another possible downside to pay transparency laws, VanDeventer explained, is that due to the unique nature of some other jobs, there is no “one-size-fits-all” pay scale. “A lot of subjectivity can go into setting compensation levels.”
For example, “While an accountant is generally an accountant in all organizations, jobs in marketing, supply chain, sales, operations, etc., are designed to optimize the role to meet the needs each organization’s unique sales and organizational structure, so salaries may also vary. ”
Discourage applicants
While pay transparency laws are meant to help workers understand if they’re being underpaid, as well as provide a general goal for job seekers, Brandon Bramley, founder of The Salary Negotiator, said that there was a lot of room for improvement.
“We’ve only seen how it works against job seekers. It’s a hit on what compensation data the company provides within these ranges – is it only base salary or does it include the other components of total compensation (i.e. bonuses annual fees, equity or a signing bonus)? It has also deterred job seekers from negotiating as they believe the advertised pay scale is set in stone, but we have not found this to be the case and have seen companies negotiate above what is advertised “, did he declare.
He says recruiters rely on these ranges to push job seekers to commit to a number before the interview, learn more about the role and review benefits/culture. “The consequence of this is eventually accepting a lower than market rate and not being paid at the true top of the pay range.”
Don’t Overreact: Negotiate
VanDeventer warns not to overreact to the salaries you see posted, especially if the range is below expectations. “Quite often it is possible to earn more than what is displayed in the job posting. The organization likely posts the expected ‘hiring range’, which is often a subset of the full salary range. For a highly qualified person, there is usually room for negotiation.
Additionally, organizations often have multiple levels of employment and are more than willing to increase the level of a job for the “right” person, she said. “Employees need to be persistent if this is an organization they are very interested in working for, especially in a tight labor market.”
Employers need a strategy
For employers, “this is an opportunity to become strategic and intentional to improve the effectiveness of compensation communications and how compensation fits into the value proposition offered to employees (compensation, benefits , career development, perks),” VanDeventer said.
“Many organizations communicate poorly about how compensation programs work, which can lead to workforce disengagement and turnover,” she added.
More administrative work for companies
These laws will unfortunately lead to more administrative work on the employers’ side. According to VanDeventer, “Some employers are concerned that everyone is asking for the top of the pay scale posted and therefore struggle with ‘how much of the pay scale’ to post. They worry about turning off some candidates if they display too low a range, and try to balance that with the fear that everyone will ask for the high end of the displayed range.
A win-win potential
In the long run, pay transparency could be a good thing for everyone, says Chelsea Jay, career development and leadership coach at Seasoned and Growing. Pay transparency gives employees a “confidence boost,” she said, by arming them with knowledge about roles and salaries, and allowing them to choose which applications they spend their time on.
Pay transparency also avoids frustration for employers and candidates, as both parties come to the table with a mutual understanding of what is available in terms of compensation – at least relatively speaking.
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This article originally appeared on GOBankingRates.com: Pay Transparency Laws: How They Could Impact Your Job Search
