Within weeks of a city pay transparency law going into effect, most New York City job listings are published with pay ranges: 60% of listings have employer-provided salaries, per Glassdoor’s Nov. 18 report. Open roles for New York statewide, New Jersey and Connecticut talent have seen a slight uptick in pay ranges available, as well.
With 2023 on the horizon, it’s worth noting that salary disclosure laws have picked up steam over the past two years. On Jan. 1, 2021, Colorado’s Equal Pay for Equal Work Act took effect, leading some employers to legally circumvent transparency requirements by barring Coloradan applicants. CarMax, Ebay, GoDaddy, PETA, Spotify and Vice Media Group are among those Colorado-exclusionary employers, as of Nov. 23, 2022.
As seen in HR Dive’s pay transparency tracker, some states have laws on the books requiring hiring managers to spill pay details only after an initial interview or upon request.
With New York City’s Nov. 1 rollout, HR professionals, employers and labor experts mulled over whether pay transparency laws will now have unintended consequences. The answer, per HR experts, appears to be yes.
Peter A. Bamberger, a research director at Cornell University’s School of Industrial and Labor Relations, traced the “pro-secrecy” and “pro-transparency” debate in the U.S. to at least the turn of the century.
In his own research at the Smithers Institute, he found that a company’s openness regarding salary shifted workers’ perceptions of how much they could earn — a phenomenon known as “performance pay instrumentality.” A Danish study and a Canadian study also pointed to how this transparency can close gap pay gaps, which Bamberger acknowledged.
Job advertising platform Appcast found that positions listed with pay in the title cost about 35% less per click — across industries — in the U.S. The lead economist for the company told HR Dive that candor about salary is an effective recruiting strategy. Notably, the discounts in cost-per-click were even higher for open roles in education and healthcare.
A compensation management exec observed to HR Dive that, with the passing of such policies, more company leaders are tackling pay parity issues head-on. They are addressing once “taboo” and “scary” conversations, she explained earlier this month.
Notably, the Glassdoor report indicates that while more employers are complying to keep recruiting New York City talent, the salary ranges have expanded.
At the start of October 2022, the median employer-provided range was $10,000. As of Nov. 12, when the study was conducted, the median had doubled. Some New York City workers have been vocal in their belief that employer-provided ranges under the new law – which, depending on the industry, can span up to hundreds of thousands of dollars — are too vast to be useful, per the Wall Street Journal.
Still, it’s worth noting that “unintended” does not always equate to “negative” — and regardless, pay transparency laws are increasingly here to stay. Come Jan. 1, 2023, California- and Washington-based companies with 15 or more workers must disclose salary ranges or wage scales for open roles — with Washington employers required to offer details on benefits or additional forms of compensation.