Unveiling the Numbers: Embracing Transparent Salaries
In modern workplaces, discussions about salary transparency have gained considerable attention. The traditional practice of keeping salary information confidential is challenged by advocates of transparency, who argue that it brings numerous benefits to employees and organizations. Now multiple states have jumped on the salary transparency bandwagon and are requiring disclosing this information upfront to your candidates.
In 2021, Colorado enacted the Equal Pay for Equal Work Act, making it the first state in the US to require businesses to disclose pay information to employees or the public.
Since 2021, eight additional states and multiple jurisdictions have passed similar salary transparency laws. More legislators and policy groups are joining the call for further action, recognizing that wage secrecy contributes to the gender pay gap and wage disparities impacting people of color. They reference a mounting body of research indicating that salary transparency has the potential to enhance pay equity.
Take Away: Ensure your job postings are compliant if in the eight states requiring salary disclosure.
To ensure compliance, business owners and HR teams must possess a comprehensive understanding of existing laws and adhere to them while also preparing for potential future legislation on salary transparency.
Are you compliant?
State Salary Transparency Laws are in effect as of July 1, 2023.
CALIFORNIA
Legislation Title: CA SB 1162
Date Effective: January 1, 2023
If you have 15 or more employees and at least one employee in California, you are required to include salary ranges in job postings.
COLORADO
Legislation Title: Equal Pay for Equal Work Act
Date Effective: January 1, 2021
Colorado law requires employers with at least one employee in the state to disclose salary ranges, benefits information, and a description of all other types of compensation (such as bonuses, commissions, and equity) in job postings.
CONNECTICUT
Legislation Title: CT HB 6380
Date Effective: October 1, 2021
If you have at least one employee in Connecticut, you must disclose the salary range for an applicant’s targeted position in the earliest of the following situations - on the applicant’s request:
Before you’ve discussed pay for the position with the applicant
Before or when you make the applicant an offer of compensation
You must also disclose information about the salary range for an employee’s current position when an employee is hired, changes position, or requests the information.
ILLINOIS
Legislation Title: IL SB 1480
Date Effective: March 24, 2023
Employers with 100 or more employees in Illinois must apply for an Equal Pay Registration Certificate by submitting pay and demographic data to the Illinois Department of Labor. Covered businesses must recertify every two years.
MARYLAND
Legislation Title: MD HB 123
Date Effective: October 1, 2020
All Maryland employers must provide an applicant with a salary range for the applicant’s targeted position on the applicant’s request.
NEVADA
Legislation Title: NV SB 293
Date Effective: October 1, 2021
Nevada employers must provide salary information to applicants for the role they interview for. They must also disclose salary information to employees about the wage range for a promotion or transfer if they request it and meet at least one of the following conditions:
The employee has applied for a promotion or transfer
The employee has completed an interview for the promotion or transfer
The employee has received an offer for a promotion or transfer
RHODE ISLAND
Legislation Title: RI SB 270
Date Effective: January 1, 2023
If you have at least one employee in Rhode Island, you’re required to disclose salary ranges for an employee’s current position or an applicant’s targeted position under the following conditions - On the applicant’s or employee’s request:
For applicants, before discussing an individual offer of compensation
For employees, at the time of hire or when an employee moves into a new position
WASHINGTON
Legislation Title: WA SB 5761
Date Effective: January 1, 2023
If you have 15 or more employees and engage in business in Washington or recruit for jobs that could be filled remotely by Washington-based employees, you must include salary information, a general description of benefits, and information about other compensation (such as bonuses, stock options, commissions, or relocation assistance) in job postings.
New York - You are right around the corner in September 2023. Subscribe to Rising Tide HR to not miss out on a future post covering the details of this law, with time to prepare!
Additional local and jurisdictional laws are in effect, so to always be compliant, ensure your hiring location does not require this transparency. Or better yet, engage in salary transparency regardless of your location!
Salary transparency can significantly impact a company's ability to attract and retain top talent.
In today's digital age, where information is readily accessible, potential candidates often have access to industry salary data and benchmarking tools. If a company maintains a policy of non-disclosure, it may deter qualified candidates who desire transparency and worry about being undervalued.
Organizations that embrace salary transparency can showcase their commitment to fairness and attract candidates who prioritize open and honest communication. Other than following laws requiring salary transparency, existing employees are more likely to stay with a company that values transparency and demonstrates a commitment to equitable compensation.
