Pay transparency laws attempt to mitigate pay inequality. Datapeople now provides in-app guidance for employers impacted by these new and ever-growing laws.
Pay inequality has a long and sullied history in the United States. Women (and particularly women of color), for example, have suffered pay inequality continuously since they entered the workforce en masse a century ago. Pay transparency is an attempt to redress that wrong and an evolution in thinking about pay equality.
More on compliance + pay transparency:
In addition to the historical significance of pay transparency, job seekers in today’s market expect to learn about salary information much earlier on in their candidacy. Simply stating that a job offers “competitive salary” is no longer good enough.
Why pay transparency matters
In the first half of the 20th century, well-paying jobs for women were scarce. Prevailing attitudes at the time relegated them to mostly lower-paying administrative roles. During World War II, however, American women took the factory jobs left vacant by men joining the military. These women made massive contributions to the war effort and industry, in general. But even after that, many of them lost their jobs to returning soldiers.
The Equal Pay Act of 1963 made pay discrimination based on gender illegal. If two workers are doing a similar job at the same company, the law establishes, their pay should be equal, regardless of gender. Yet women have continued to experience pay discrimination in various forms to this day.
The rise of pay transparency laws
Pay transparency is the next step in the evolution of pay equality. Because pay discrimination can be too subtle to rise to a legal challenge, the Equal Pay Act isn’t enough.
For one thing, an employee has to learn what their coworkers make to know if they earn less than them. And because salary isn’t something that employees generally share with each other, certain groups can certainly benefit from a mechanism that makes pay transparent.
We’ve already seen new pay transparency laws go into effect in some U.S. states and municipalities. Some of these laws require companies to release pay data to the state in which they operate. Others make it illegal for companies to ask about pay history during the interview process. (To break the cycle of pay discrimination.)
Now, most notably, we’re seeing pay transparency laws requiring employers to disclose the pay range of an open job within the job ad itself or upon request from an applicant. (Even an internal applicant.)
The idea behind pay transparency laws is that transparency from the beginning of the hiring process can help nip pay discrimination in the bud. Pay becomes entirely dependent on the job itself, not what applicants made in previous positions (which can depend on an applicant’s gender or race) or any other factor.
Salary ranges in job posts
While there are varying types of pay transparency laws in effect (think employers needing to disclose pay upon an applicant’s request), requiring employers to disclose salary information in a job post is quickly growing (especially in the U.S.). Below is an ever-growing list of locations that require (or will soon require) salary information in job posts.
- California: As of January 2023, the California Pay Transparency for Pay Equity Act requires employers to list a salary range in job descriptions.
- Colorado: As of January 2022, Colorado’s Equal Pay for Equal Work Act requires employers to list a salary range in job descriptions.
- New York City: As of November 2022, the New York City pay transparency law requires employers to list the salary range in job descriptions.
- Washington: As of January 2023, the Washington Equal Pay and Opportunities Act requires employers to list a salary range in job descriptions.
- New York: As of September 17, 2023, the entire state of New York (not just New York City) requires employers to list salary range in job descriptions.
- British Columbia: Beginning November 2023, the Canadian state of British Columbia will require employers to list salary range in job descriptions.
How Datapeople helps you comply with pay transparency laws
Most hiring teams don’t have the bandwidth to keep up with ever-changing employment laws. However, not adhering to these laws can wreak havoc for your company. To help ensure compliance with pay transparency laws, Datapeople’s job description software reminds you of salary requirements in three ways:
- If you’re writing a job post for a location that requires salary transparency, Datapeople alerts your team to add compensation details if they’re not detected in the job post.
- Teams advertising jobs in states or municipalities where pay transparency laws are coming soon will receive warnings of the imminent changes.
- If your company has a policy to voluntarily disclose salary in job posts, Datapeople will alert your team to add compensation details.
If the current trend continues, we can likely expect other US states and cities to follow suit. Datapeople will, of course, continue to update our platform as these changes occur. Keep an eye on this space going forward. Want to see our pay transparency guidance in action? Click here to get started.