A pay transparency law in New York state became active on Sunday. Employers within the state must now provide salary ranges in their job postings. California, Colorado and Washington have all implemented laws of a similar nature since 2021, and a number of cities and towns have also passed relevant legislation. Data from Indeed Hiring Lab revealed that, in August, half of online job listings included salary information, which was a significant increase from the 18.4% of listings in February 2020.
The prevalence of pay transparency in job listings is on the rise, and all signs suggest this trend will continue, according to Indeed Hiring Lab, the economic research arm of career site Indeed. In August, 50% of online job listings offered salary info, which is up from 18.4% in February 2020. This increase is largely due to the implementation of pay transparency laws in various states and municipalities, as well as higher levels of leverage for job seekers in a post-pandemic job market where employers are competing to hire. Experts have noted that this growing practice of pay transparency has weakened the social norms and policies around pay secrecy. Indeed economist Cory Stahle believes the rate of pay transparency is likely to keep increasing. He noted that the Indeed stats don't cover job ads that include only the top salary offered, due to the unclear nature of such postings.
On Sunday, New York joined the ranks of four other states (California, Colorado, Washington, and New York City) in implementing a pay transparency law. This law requires that employers with a minimum of four employees make a good faith salary disclosure in their job postings. The pay transparency movement is new, with Colorado leading the way by passing the law in 2019 and it came into effect on January 1, 2021.
The city of Ithaca, alongside Albany and Westchester counties in New York, and Jersey City in New Jersey, have instituted pay transparency laws, according to the National Conference of State Legislatures. Oppositely, other states, such as Cincinnati and Toledo in Ohio; Maryland; Connecticut; Rhode Island; and Nevada have adopted a more modest policy which permits employers to reveal salary brackets to job seekers on command, as documented by the National Women's Law Center. Further, Obloj and Zenger noted the myriad of websites, such as Glassdoor.com, Payscale.com, and Salary.com, affording a noteworthy amount of access to salary data.
Mandi Woodruff-Santos, a career and money coach, noted the clear advantages to both employees and businesses of making salary data available in job postings. She remarked that more transparency could help diminish enduring inequalities in pay, particularly for women and those of color. "It levels the playing field," she said. "At least they have a starting-off point." In addition, according to Stahle of Indeed, it eases the process of submitting and selecting applications since job seekers can quickly decide which job is right for them. He additionally suggested that it may be advantageous to young workers and newly minted graduates when planning their careers.
A survey from Indeed in 2022 found that 75% of job seekers are more likely to apply for a job if the salary range is present in the posting, and 56% of job seekers would apply to a company even if they don't recognize the name if the salary range is displayed. But there are potential drawbacks to pay transparency. According to Obloj and Zenger, the practice may cause a decrease in overall wages of employees, even while increasing wages for those who are unfairly underpaid. This decrease may be a result of employers resisting salary negotiations as the practice can lessen the bargaining power of the employee. Additionally, pay transparency can lead to a drop in worker productivity and change the way workers prioritize their tasks.
Applicants aren't required to accept the salary or pay range listed in a job advertisement, according to Woodruff-Santos. She suggests asking about it first, as you should not assume it is the definitive answer. If the salary isn't negotiable, there are still other items to haggle for. Woodruff-Santos suggests working from home flexibility as a "big whale," meaning it is a great benefit even though it doesn't pay money.
When leaving an old job, workers may be leaving money on the table that a new employer might be able to make up for, according to Woodruff- Santos. This could be in the form of a signing bonus repayment, a 401(k) match, restricted stock units, and a relocation-benefit package. Furthermore, they should think about other benefits such as wellness services, health insurance, commuter benefits, tuition reimbursement, retirement benefits and dependent-care flexible spending accounts.
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