Have you noticed many people air their grievances about recruiters and employers on LinkedIn? Perhaps their biggest pet peeve is the lack of pay transparency when recruiters and companies post jobs on LinkedIn.
Pay transparency refers to how open employers are about employee salaries and how open employees are allowed to be when discussing with others.
Many LinkedIn’ers object to being asked to read a lengthy job description for a position they’d like to know more about and being asked to submit a resume without having any idea what the starting salary is.
They also get riled when venting about employers that expect candidates to go through a lengthy interview process but don’t disclose the starting salary until the company is ready to make an offer.
Not only are people seething over the lack of salary transparency, but cities and states are also jumping into the fray. New York City has become the latest to enact a new transparency law, which went into effect on November 1, 2022. Though it applies specifically to workers in New York City, experts believe it will have a ripple effect nationwide.
Why is salary transparency important?
Do you work for a company that is offering a bonus to employees who refer a job candidate that gets hired? If not, chances are you know someone who does or have heard about it.
Between the pandemic, beefed-up unemployment stimulus money, and The Great Resignation of 2021, during which many employees voluntarily quit their jobs, many employers are struggling to find, hire and retain good employees.
Employers, in general, have lost the upper hand when it comes to hiring. As a result, many job candidates have developed strict criteria for selecting a new employer.
They’re coming into the interview process with a list of requirements a potential employer must possess, including offering unique employee benefits like paid parental leave, the ability to work remotely, and salary transparency on the employer's part at the beginning of the hiring process, not the end.
[ Survey: Employees willing to sacrifice benefits & more to remain remote ]
Pay transparency laws by state
Not only do job applicants want salary transparency from employers, but so do those who are already working for companies.
Inc. magazine has called 2022 “The Year of Pay Transparency” because it is clearly becoming a trend across America. Seventeen states have enacted laws that allow employees to freely discuss their pay without fear of retaliation by their employer.
According to Pequity, a company that helps employers implement salary transparency and pay parity, these states, in particular, are at the forefront of the movement:
California
California was the first state in the U.S. to legally require employers to provide the pay range for a job — if the candidate asks for it after the first interview.
Passed in 2016 and updated annually, California’s Equal Pay Act prevents employers from asking about candidates’ previous salaries and was the first law to use the phrase “substantially similar work” regarding gender pay parity.
Colorado
In effect since January 2021, Colorado’s Equal Pay for Equal Work Act requires employers to list the pay range and benefits for every job opening.
Even if you have just one employee working in Colorado, you’re required to post pay for any remote job that could potentially be performed in the state.
Employers must also notify current employees of all promotion opportunities and keep records of job descriptions and wages.
Connecticut
Relatively new to the pay transparency scene is Connecticut.
They passed a bill that took effect in October 2021, requiring employers to provide a salary range for all extended offers or before then if the candidate asks for it.
This applies to transfers and promotions, too. For example, employers in Connecticut have to provide a pay range for any instance where someone is moving into a new role.
Maryland
Maryland initially passed its Equal Pay for Equal Work Act in 2016 but updated it in 2020 with language requiring employers to provide candidates with pay ranges upon request.
Employers in Maryland are also prohibited from asking candidates about their previous salary history.
Nevada
Effective October 2021, Nevada employers must automatically provide a salary range to candidates after the first interview.
It’s essentially California’s law, but compulsory for the employer.
For internal moves like transfers and promotions, the onus is on the employee to request a pay range.
New York City
Effective November 1, 2022, employers must list the salary range on all posted job ads, promotions, and transfer opportunities. It applies to any position that can or will be performed, in whole or in part, in New York City, whether it’s done from an office, in the field, or remotely from the employee’s home.
Rhode Island
Introduced and passed in 2021, the Rhode Island Equal Pay Law will require employers to provide candidates with a pay range if the interviewee requests it—starting in January of 2023.
This will apply to transfers and promotions as well.
Either way, employers are legally required to disclose the salary range for a role before compensation is discussed with the candidate.
Washington
Not far behind California, Washington amended its Equal Pay and Opportunities Act in 2019 to require employers to provide a salary range after they’ve made an offer to a candidate.
However, it’s always at the request of the candidate. If the candidate doesn’t ask, they won’t get a range.
The same goes for transfers and promotions.
If an employee in Washington state asks for a pay range, the employer must provide one.
Pay transparency by generation
25-year-old Hannah Williams has been a crusader for employers to practice salary transparency. Hannah took to the streets in April 2022 and quizzed people about their livelihoods, including their pay. She posted their video responses on Instagram and TikTok.
In only one month, her @salarytransparentstreet account captured 114.5 million views and about 1 million followers. Thanks to her newfound popularity Hannah quit her $115,000-a-year job as a data analyst to turn her project into a business.
Hannah says that around half the people she approaches are open to disclosing their earnings, with people under age 45 being the most willing to answer.
Salary transparency & remote workers
Because of the scarcity and fierce competition for top-tier employees, many employers have had to expand their horizons and hire people who live out of state and work remotely from their home state.
This has created confusion among employers in states without salary transparency laws. Labor and Employment Attorney Justin T. Hill explains the relationship between employers and remote workers located out-of-state:
“While employers may not do business within a state with such laws, employing remote employees within that state's borders places an employer within the coverage of the state's pay transparency law, among other employment laws. Further, certain employers advertising positions with an option for candidates to work in any of the 50 states must ensure that the advertisement meets the requirements of applicable pay transparency laws (even if the employer does not specifically target a state with these rigorous requirements).”
A final thought
Even in states that haven’t enacted salary transparency and pay equity laws, employers should disclose salary ranges to their job candidates and current employees. Employers treating their applicants and workers fairly don’t have to worry about opening Pandora’s Box.
The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.
