![[New York] Salary transparency laws to combat pay disparities](http://gpa.net/cdn/shop/articles/bigstock-Diverse-Financial-Company-Empl-453521009_1200x.jpg?v=1667493620)
From this week, New York City’s jobseekers will have access to a key piece of information: how much the salary they can expect to earn for an advertised opening will be, Financial Post reports.
As of November 1, New York requires employers to disclose “a good faith salary range for every job, promotion, and transfer opportunity advertised,” according to the city’s Commission on Human Rights.
Similar salary transparency laws are reportedly being adopted by a small but increasing number of cities and states across the country in an effort to address pay disparities for women and people of colour.
Seher Khawaja - senior attorney for economic empowerment at Legal Momentum whose organisation helped draft the New York City law - said salary transparency “gives existing employees and workers information to better gauge how positions within their workplace are valued and whether they’re being paid fairly.”
It also offers employers a way to avoid liability.
“It puts their feet to the fire to think about how they’re setting pay and to avoid discriminatory practices that were working their way in previously,” Ms Khawaja said.
Haris Silic - vice president at Artisan Talent, a staffing agency that places hundreds of creative professionals in New York City and across the country - said the law’s implementation may initially be tough on the employer’s side, but he thinks “everyone sees the value.”
“Every employer was an employee once,” he said.
Business groups, including New York’s five borough chambers of commerce, have reportedly argued that the law could create “dissatisfaction in the workforce and demands to adjust existing pay scales that the employer may be unable to afford.”
“During a labor shortage, or in the context of achieving diversity goals, the posted maximum may be significantly higher than the historical salary ranges,” the groups wrote in a letter to the New York City Council.
Colorado was the first state to adopt a salary transparency law in 2019, followed by California, Maryland, Nevada, Rhode Island, Connecticut and Washington, as well as cities like Cincinnati and Toledo, Ohio.
Rules for salary disclosures vary. In some cases, they require employers to share the information upon request or after an interview, with exemptions for small businesses. In other cases, employers must post salary ranges.
In Colorado, for example, a recent job posting on the recruitment site Indeed for an executive assistant in Denver advertised a salary range of $57,131 to $88,516 a year. A human resources data analyst role listed a range of $67,488 to $111,355 a year. A retail position at Target advertised an hourly salary of $23.75 to $40.40.
New York City’s law is similar to Colorado’s, however, it applies only to employers with four or more workers rather than all businesses. That accounts for one-third of employers in the city but roughly 90 per cent of workers, according to state Labor Department statistics.
The new wave of legislation represents a shift in who bears the responsibility for making salaries transparent, with more employers now being held accountable for creating an open work environment instead of leaving it to employees to work out how their pay compares to their coworkers and whether to ask for fair compensation, according to Andrea Johnson, director of state policy at the National Women’s Law Center.
In September, California Governor Gavin Newsom signed a law requiring any employer with at least 15 employees to publish pay scales with its job listings. The California law also went beyond Colorado and New York by requiring large employers to submit an annual report to California’s Civil Rights Department breaking down salaries by race, ethnicity, and sex.
In 2021, the median pay for full-time women workers was about 83 per cent of men’s pay, according to federal data, and women make less than their male counterparts in nearly all fields. For women of colour, the numbers are even worse. A report by the National Partnership for Women and Families reportedly found that Black women make 64 cents for every dollar paid to white, non-Hispanic men. For Latina women, it’s 54 cents and for Native American women, it is just 51 cents.
Ms Khawaja said the disclosure of demographic information is an encouraging addition to the California law, noting that one of the most significant reasons for persistent wage inequities is occupational segregation by gender and race. So long as women and people of colour disproportionately work in lower-wage industries, pay gaps will exist, she said.
“A disproportionate number of women are working lower-wage jobs,” Ms Khawaja continued. “So legislation to increase the minimum wage and eliminate exceptions, such as the tipped wage for certain categories of workers like restaurant workers, are really essential to closing that gap.”
Key points about salary transparency:
Discussing pay with co-workers is legal
Ms Johnson highlights the fact that it is perfectly legal to talk about pay in the workplace even if employers discourage it.
“The National Labor Relations Protection Act protects employees who discuss pay because it protects employees who discuss workplace conditions, and pay is a work condition,” she said.
A lack of transparency around pay typically disadvantages women and people of colour; the very same groups that are already statistically less likely to fare well in negotiations, Ms Johnson added.
You are allowed to withhold your salary history
No one should feel compelled to disclose their salary history to a potential employer. Some cities and states have even passed laws forbidding employers from asking. The practice can depress wages and lock in inequities.
“There’s a fundamental information asymmetry in salary negotiation,” Kate Bahn - chief economist at the Washington Center for Equitable Growth - said. “Employers inherently have better information about wages, meaning they have an upper hand. The party that has more information is going to fare better.”
The same applies to salary expectations
Some employers work around the salary history legal constraint by asking applicants to share their salary expectations, however, Ms Bahn said that can have the same effect of lowering offers.
For this reason, Laura Adler - assistant professor of organisational behaviour at the Yale School of Management - said it’s better to have salary transparency laws that require employers to disclose salary ranges, such as those in New York, Colorado, and California. These laws are more difficult for employers to circumvent.
“The more policymakers can ground their interventions in the way companies actually run their businesses, the more effective those interventions are likely to be,” Ms Adler said.
Advocates advise that candidates negotiating for a new job should know that they have the right to decline to share salary expectations so that the employer is the one to open the offer.
Source: Financial Post
(Quotes via original reporting)
From this week, New York City’s jobseekers will have access to a key piece of information: how much the salary they can expect to earn for an advertised opening will be, Financial Post reports.
As of November 1, New York requires employers to disclose “a good faith salary range for every job, promotion, and transfer opportunity advertised,” according to the city’s Commission on Human Rights.
Similar salary transparency laws are reportedly being adopted by a small but increasing number of cities and states across the country in an effort to address pay disparities for women and people of colour.
Seher Khawaja - senior attorney for economic empowerment at Legal Momentum whose organisation helped draft the New York City law - said salary transparency “gives existing employees and workers information to better gauge how positions within their workplace are valued and whether they’re being paid fairly.”
It also offers employers a way to avoid liability.
“It puts their feet to the fire to think about how they’re setting pay and to avoid discriminatory practices that were working their way in previously,” Ms Khawaja said.
Haris Silic - vice president at Artisan Talent, a staffing agency that places hundreds of creative professionals in New York City and across the country - said the law’s implementation may initially be tough on the employer’s side, but he thinks “everyone sees the value.”
“Every employer was an employee once,” he said.
Business groups, including New York’s five borough chambers of commerce, have reportedly argued that the law could create “dissatisfaction in the workforce and demands to adjust existing pay scales that the employer may be unable to afford.”
“During a labor shortage, or in the context of achieving diversity goals, the posted maximum may be significantly higher than the historical salary ranges,” the groups wrote in a letter to the New York City Council.
Colorado was the first state to adopt a salary transparency law in 2019, followed by California, Maryland, Nevada, Rhode Island, Connecticut and Washington, as well as cities like Cincinnati and Toledo, Ohio.
Rules for salary disclosures vary. In some cases, they require employers to share the information upon request or after an interview, with exemptions for small businesses. In other cases, employers must post salary ranges.
In Colorado, for example, a recent job posting on the recruitment site Indeed for an executive assistant in Denver advertised a salary range of $57,131 to $88,516 a year. A human resources data analyst role listed a range of $67,488 to $111,355 a year. A retail position at Target advertised an hourly salary of $23.75 to $40.40.
New York City’s law is similar to Colorado’s, however, it applies only to employers with four or more workers rather than all businesses. That accounts for one-third of employers in the city but roughly 90 per cent of workers, according to state Labor Department statistics.
The new wave of legislation represents a shift in who bears the responsibility for making salaries transparent, with more employers now being held accountable for creating an open work environment instead of leaving it to employees to work out how their pay compares to their coworkers and whether to ask for fair compensation, according to Andrea Johnson, director of state policy at the National Women’s Law Center.
In September, California Governor Gavin Newsom signed a law requiring any employer with at least 15 employees to publish pay scales with its job listings. The California law also went beyond Colorado and New York by requiring large employers to submit an annual report to California’s Civil Rights Department breaking down salaries by race, ethnicity, and sex.
In 2021, the median pay for full-time women workers was about 83 per cent of men’s pay, according to federal data, and women make less than their male counterparts in nearly all fields. For women of colour, the numbers are even worse. A report by the National Partnership for Women and Families reportedly found that Black women make 64 cents for every dollar paid to white, non-Hispanic men. For Latina women, it’s 54 cents and for Native American women, it is just 51 cents.
Ms Khawaja said the disclosure of demographic information is an encouraging addition to the California law, noting that one of the most significant reasons for persistent wage inequities is occupational segregation by gender and race. So long as women and people of colour disproportionately work in lower-wage industries, pay gaps will exist, she said.
“A disproportionate number of women are working lower-wage jobs,” Ms Khawaja continued. “So legislation to increase the minimum wage and eliminate exceptions, such as the tipped wage for certain categories of workers like restaurant workers, are really essential to closing that gap.”
Key points about salary transparency:
Discussing pay with co-workers is legal
Ms Johnson highlights the fact that it is perfectly legal to talk about pay in the workplace even if employers discourage it.
“The National Labor Relations Protection Act protects employees who discuss pay because it protects employees who discuss workplace conditions, and pay is a work condition,” she said.
A lack of transparency around pay typically disadvantages women and people of colour; the very same groups that are already statistically less likely to fare well in negotiations, Ms Johnson added.
You are allowed to withhold your salary history
No one should feel compelled to disclose their salary history to a potential employer. Some cities and states have even passed laws forbidding employers from asking. The practice can depress wages and lock in inequities.
“There’s a fundamental information asymmetry in salary negotiation,” Kate Bahn - chief economist at the Washington Center for Equitable Growth - said. “Employers inherently have better information about wages, meaning they have an upper hand. The party that has more information is going to fare better.”
The same applies to salary expectations
Some employers work around the salary history legal constraint by asking applicants to share their salary expectations, however, Ms Bahn said that can have the same effect of lowering offers.
For this reason, Laura Adler - assistant professor of organisational behaviour at the Yale School of Management - said it’s better to have salary transparency laws that require employers to disclose salary ranges, such as those in New York, Colorado, and California. These laws are more difficult for employers to circumvent.
“The more policymakers can ground their interventions in the way companies actually run their businesses, the more effective those interventions are likely to be,” Ms Adler said.
Advocates advise that candidates negotiating for a new job should know that they have the right to decline to share salary expectations so that the employer is the one to open the offer.
Source: Financial Post
(Quotes via original reporting)
