UNITED STATES NEWS

Pay transparency is spreading. Here’s what you need to know

Mar 20, 2023, 10:34 AM

NEW YORK (AP) — U.S. employers are increasingly posting salary ranges for job openings, even in states where it’s not required by law, according to analysts with several major job search websites.

Following new legislation in New York City, California, Washington, Colorado, and elsewhere, employers across the country are becoming more transparent about pay in order to stay competitive with companies in states that require employers to post salary ranges, experts say. A tight labor market and significant increase in remote work have also contributed to the rise.

The number of U.S. job postings that include salary information more than doubled between February 2020 and February 2023, from 18.4% to 43.7%, according to a new report from job search site Indeed.

Salary visibility is lowest in the southern U.S., which accounted for 18 of the 20 least transparent metro areas, and highest in the western part of the country, which tends to have more regulation.

Advocates say it’s a trend that benefits women and people of color, who statistically fare less well in hiring negotiations.

Rather than placing the responsibility on the job-seeker or employee to determine how their pay compares to coworkers, and what fair compensation might be, the laws shift that expectation to the employer.

Kate Bahn, chief economist at the Washington Center for Equitable Growth, says that means employers have less of an upper hand in determining pay. Laws that forbid employers from asking potential hires about salary history in recent years do similar work.

In 2021, the median pay for full-time women workers was about 83% of men’s pay, according to federal data, and women make less than their male counterparts in nearly all fields. Black women make 64 cents for every dollar paid to white, non-Hispanic men, according to a report by the National Partnership for Women and Families. Latina women make 54 cents and Native American women 51 cents.

Keegan Vance Forte, 37, a freelancer based in Jersey City, New Jersey, is looking for a permanent position either in New York or New Jersey. She said she’s noticed more salary listings for open roles in both states during the past several months than she did when job hunting in the past. (New Jersey does not have a law requiring transparency. New York City’s law, which requires employers to post a good-faith salary range with every posting, took effect in November.)

“I’m still getting used to it,” she said. “When I see a salary posting with a job listing, my eyes widen.”

In the past decade, Forte has held roles in business development, marketing and company partnerships, and she says knowing the available range is helpful to avoid wasting both her time and the hiring manager’s.

“Instead of dancing around the elephant-in-the-room question at the end, you at least know you’re playing in the same ballpark,” she said.

Previously, Forte has spent weeks interviewing for a position only to discover the salary wasn’t in an acceptable range for her.

“Over a career, that can be very time consuming,” she said.

Daniel Zhao, lead economist for job site GlassDoor, said that compliance with the new laws requiring disclosure is already strong in New York City, California, and Washington, and even stronger in Colorado, which has had a law mandating transparency in effect since 2019.

“The additional compliance in Colorado implies it will improve in the other states,” he said. “And what we’re really noticing is that, since the laws have taken effect, more employers have decided to share salaries nationwide.”

Major companies including Microsoft, CitiGroup, and Google have publicly committed to posting salary ranges for all jobs across the country, rather than only in the states where it’s legally required.

“Companies that are not necessarily in locations that now have laws — they’re disclosing that information anyway,” said Vicki Salemi, a career expert at job site Monster. “It’s becoming more of the norm because job-seekers are expecting it.”

Salemi, who also previously worked as a recruiter, said employers tend to compete for job candidates across state lines, including neighboring states that have different laws.

“That means it’s in their best interest to start sharing their own ranges, so the job seekers can compare apples to apples,” she said. “It’s a virtuous feedback loop.”

She called the new laws a “game-changer” in reducing the taboo around discussing pay.

In New York City, the NYC Commission on Human Rights is early in its enforcement efforts. But Jose Rios Lua, the commission’s executive director of communications, said that the new law has been “life-changing for a lot of folks.”

“Before they’ve gone through what could turn out to be a long application process, they know the salary range, so they know if a position is worth pursuing,” he said. “For those in lower-earning jobs, it might mean the difference from living paycheck to paycheck.”

A provision of New York City’s law also gives companies 30 days to rectify any violation in a job posting — whether that’s listing an overly broad salary range or not having a range at all. It’s an unusual grace period.

In the first few months, the commission has seen that both employers and prospective employees have been “vigilant about job postings,” he said.

Any member of the public can come to the commission and file an inquiry. If a company repeatedly violates the law, they will be subject to penalties including fees. Anyone who encounters a business not complying with the new salary transparency law can file an inquiry at the commission website.

The law is also proving illuminating for some employees who weren’t necessarily looking for new jobs.

Kimberly Nguyen, 25, a UX copywriter in a contract role at CitiGroup, noticed a job posting for a comparable role, but as a full-time employee with a significantly higher salary range. She shared it with her fellow contracted copy-writers and tweeted about it. The group brought it to their managers to try to negotiate for higher pay. Nguyen said they’re still waiting.

“They told us it’s out of their hands, and there’s nothing they can do,” she said. “The managers said they hadn’t even realized the job had been posted.”

A spokesperson for CitiGroup said Citi pays the contracting company that employs Nguyen a market-competitive rate for their services, and that the contractor negotiates individual pay rates. The spokesperson said Citi is hiring for a full-time role for an employee with five to eight years of experience, more than Nguyen has, and the salary range reflects that.

Nguyen’s experience shows the limits of pay transparency in a highly contracted workforce. For now, she says she’s looking for full-time roles with higher pay at other companies, while still advocating for pay increases for contracted workers at Citi. She said she supports pay transparency and sees it as a tool for pay equity.

“It’s a hill I’m willing to die on, but I also have to pay rent,” she said.

___

The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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Pay transparency is spreading. Here’s what you need to know