In HR Dive's Mailbag series, we answer HR professionals' questions about all things work. Have a question? Send it to [email protected]
Q: How should I handle including salary ranges in job postings that will cross state lines?
A: From a compliance perspective, employers may need to note that Colorado is the only state that requires employers to place pay range disclosures in their job applications at the time that a job is posted.
The state's law took effect Jan. 1 and applies to any employer that employs at least one person in Colorado, said Jennifer Harpole, shareholder at the Denver office of Littler Mendelson.
That may seem straightforward, but it creates a question: What if an employer not based in Colorado hires for a position that can be done anywhere via telework, including Colorado?
The answer depends on whether the employer already has an employee in the state, Harpole said. So if a company based in New York hires for a remote position, and it does not currently employ anyone in Colorado nor maintain a place of business in the state, it would not need to comply with Colorado's pay range requirements.
However, should that same employer hire an employee to work remotely in Colorado, subsequent job postings that could be performed in the state must disclose the associated pay range, said Laura Mitchell, principal at the Denver office of Jackson Lewis.
But the employer need only disclose the pay range it would offer to candidates located in Colorado. "If they pay differently in Colorado than they would for another location, they can indicate that," Mitchell said. The employer, she added, could include language indicating this within the job post, such as "pay may vary based on location."
Employers also may be able to use a pay range based on a nationwide scale, so long as they comply with the law's central requirements. "There's some leeway there, but the range has to be in there," Harpole said.
So far, Colorado is alone in its formulation of pay range disclosure. Other jurisdictions, like Rhode Island, require employers to provide job candidates with pay range information should candidates request it.
"Fortunately for employers, the trend is just to require disclosure of salary to applicants upon request," Harpole said. "That is much less burdensome for recruiters to build into their process."
What other considerations are there?
Outside such requirements, the exact method by which an organization discloses pay ranges for positions that cross state lines may depend on its compensation structure, Mitchell said. Some employers may not differentiate pay based on where someone resides, while others build in a geographic component to pay. It is a conversation that has only grown louder during the pandemic.
Pay range disclosure could act as a way to encourage transparency, but employers may be concerned about setting the correct expectations for job candidates. "We hear it all the time," Mitchell said, noting that the recent exodus of workers from high-earning locales like Silicon Valley to others — like Colorado — can be problematic from a recruitment perspective.
Employers, Mitchell continued, do not want to disclose a pay range that would discourage skilled applicants from applying. A Colorado wage range on a remote work job posting may seem low to high-end talent in New York, for example. But posting a nationwide range could create expectations of higher pay in areas where the market does not sustain such pay, she said.
Experience and other factors may come into play. "If you have a broad range, that may be misleading for a candidate that they could expect pay on that higher end of the range, but really that's reserved for people who have been doing the job for a number of years," Mitchell said. "I'm not saying employers are trying to not provide the right information; I think they're really trying to evaluate what they would pay."
As with so many areas of HR, Harpole said there is no one-size-fits-all solution that is likely to work for all employers. But Mitchell noted that employers can make informed decisions so long as they monitor updates for the jurisdictions in which they operate and understand that their focus should be on transparency and giving applicants accurate information so they can make informed decisions.