Pay transparency is spreading. Here’s what you need to know
NEW YORK (AP) — U.S. employers are increasingly posting salary ranges for job postings, even in states where it’s not required by law, according to analysts at several major job search websites.
As a result of new legislation in New York City, California, Washington, Colorado and elsewhere, employers across the country are becoming more transparent about pay to stay competitive with companies in states that require employers to post ranges. wages, say experts. A tight job market and a significant increase in remote working also contributed to the increase.
The number of U.S. job postings that include salary information more than doubled between February 2020 and February 2023, from 18.4% to 43.7%, according to a new report from job search site Indeed.
Wage visibility is lowest in the Southern United States, which accounts for 18 of the 20 least transparent metropolitan areas, and highest in the western part of the country, which tends to have more regulation.
Proponents say it’s a trend that benefits women and people of color, who statistically fare less well in hiring negotiations.
Rather than placing responsibility on the job seeker or employee to determine how their pay compares to that of their colleagues and what fair compensation might be, the laws shift that expectation onto the employer.
Kate Bahn, chief economist at the Washington Center for Equitable Growth, says this means employers have less power in setting pay. Laws that prohibit employers from asking prospective hires about salary history in recent years do a similar job.
In 2021, according to federal data, the median pay for female full-time workers was about 83 percent of men’s pay, and women earn less than their male counterparts in nearly all fields. Black women earn 64 cents of every dollar paid to non-Hispanic white men, according to a report by the National Partnership for Women and Families. Latina women earn 54 cents and Native American women 51 cents.
Keegan Vance Forte, 37, a freelancer based in Jersey City, New Jersey, is seeking a permanent position in New York or New Jersey. He said he’s noticed more salary listings for roles open in both states in recent months than when he’s been looking for work in the past. (New Jersey does not have a law requiring transparency. New York City’s law, which requires employers to post a bona fide salary range for every posting, went into effect in November.)
“I’m still getting used to it,” she said. “When I see a salary ad with a job posting, my eyes go wide.”
Over the past decade, Forte has held roles in business development, marketing and corporate partnerships, and says knowing the range available is helpful in avoiding wasting both his and the hiring manager’s time.
“Instead of dancing around the elephant in the room question at the end, at least know you’re playing in the same ballpark,” he said.
Previously, Forte spent weeks interviewing for a position only to find the salary was not in an acceptable range for her.
“Over the course of a career, that can take a long time,” he said.
Daniel Zhao, chief economist for job site GlassDoor, said compliance with new laws requiring disclosure is already strong in New York City, California and Washington, and even stronger in Colorado, which has a law requiring disclosure. transparency in force since 2019.
“Additional compliance in Colorado means it will improve in other states,” he said. “And what we’re really noticing is that, since the laws have been in place, more employers have decided to share wages nationwide.”
Major companies including Microsoft, CitiGroup and Google have publicly pledged to publish salary ranges for all jobs across the country, rather than just in states where it’s legally required.
“Companies that aren’t necessarily in places that now have laws — they’re still disclosing that information,” said Vicki Salemi, a career expert at job site Monster. “It’s increasingly becoming the norm because job seekers expect it.”
Salemi, who also previously worked as a recruiter, said employers tend to compete for job candidates across state lines, including neighboring states that have different laws.
“That means it’s in their best interest to start sharing their ranges, so that job seekers can compare apples to apples,” he said. “It’s a virtuoso feedback loop.”
He called the new laws a “game changer” in reducing the taboo on discussing pay.
In New York City, the New York Commission on Human Rights is early in its enforcement efforts. But Jose Rios Lua, the commission’s executive communications director, said the new law had “changed the lives of many people.”
“Before going through what could prove to be a lengthy application process, they know the salary range, so they know if a position is worth pursuing,” she said. “For those in low-paying jobs, it could mean the difference from a living paycheck to a paycheck.”
A provision of New York City law also gives companies 30 days to rectify any violation in a job posting, whether it’s listing an overly broad salary range or not having one at all. It’s an unusual grace period.
In the first few months, the commission saw that both employers and prospective employees were “vigilant about job postings,” it said.
Any member of the public can come to the commission and submit a request. If a company repeatedly violates the law, it will be subject to penalties, including charges. Anyone who comes across a company that does not comply with the new pay transparency law can file a request on the commission’s website.
The law is also proving to be enlightening for some employees who weren’t necessarily looking for a new job.
Kimberly Nguyen, 25, a UX copywriter in a contract role at CitiGroup, noticed a job posting for a similar role, but as a full-time employee at a significantly higher salary range. She shared it with her fellow contract writers and tweeted about it. The group took this to their managers to try to negotiate higher pay. Nguyen said they are still waiting.
“They told us it’s out of their control and there’s nothing they can do,” he said. “The managers said they didn’t even notice the job had been posted.”
A CitiGroup spokesperson said that Citi pays the contractor company that employs Nguyen a market-competitive rate for its services and that the contractor negotiates individual rates of pay. The spokesperson said Citi is hiring an employee with five to eight years of experience, more than Nguyen, for a full-time role, and the salary range reflects that.
Nguyen’s experience shows the limits of wage transparency in a highly contracted workforce. For now, she says she’s looking for higher-paying full-time roles at other companies while continuing to support pay raises for contract workers at Citi. You said you support pay transparency and see it as a tool for pay equity.
“It’s a hill I’m willing to die on, but I also have to pay the rent,” he said.
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The Associated Press receives support from the Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
