Guidance for New Pay Transparency Laws

Pay transparency laws attempt to mitigate pay inequality. Datapeople now provides in-app guidance for employers impacted by the new 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.

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 we’re seeing additional pay transparency laws continuing in the same vein. The latest is a requirement for 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.)

What are pay transparency laws?

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

California, Connecticut, Maryland, Nevada, Rhode Island, and Washington State now have laws requiring employers to provide salary ranges. They have to do so upon an applicant’s request or at some point during the hiring process (it varies by law). In Ohio, the cities of Cincinnati and Toledo require salary range disclosure upon request of an applicant who has received an offer of employment. 

The state of Colorado enacted a pay transparency law on January 1, 2021, that requires employers to list pay range in job posts. New York City also has a similar law slated to go into effect in April 2022. 

Compliance guidance for pay transparency laws

Keeping up to date with employment law is a full-time job in itself. It’s not something that hiring teams can easily do on top of everything else. 

So, to help with compliance, Datapeople’s job description software now provides in-app guidance for hiring teams. Teams advertising in places with laws on the books receive prompts to include a pay range in job posts. Teams advertising in states or municipalities with laws coming down the pike will receive warnings of the imminent change. 

If the current trend continues, we can likely expect other U.S. 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.

Christine Knapp

Christine Knapp

Want to improve your hiring outcomes?

Add Your Heading Text Here

Search Datapeople

Schedule a Demo

We’re excited to show you our recruiting analytics products. Please provide your contact information and someone from our new accounts team will be in touch.

[gravityform id=”2″ title=”false” description=”false”]