Pay transparency to further empower workers
Workers are set to hold onto the upper hand they gained over the past two years as more states start requiring pay disclosures on job postings.
Why it matters: Salary transparency in job postings will prompt people to talk more openly about their own compensation and enable job seekers to gain more information about their value in the marketplace.
- At the same time, companies will have to do more work to update pay policies and handle questions from employees — all amid continuing staff shortages, contentious return-to-office policies and a rise in unionization efforts.
Driving the news: California just became the largest state to require pay range on job ads for companies with 15 or more employees starting Jan. 1 next year.
- The move comes after Colorado, Nevada, Connecticut and Washington have implemented or approved similar rules, and as rules are set to take effect in New York City next month. New York state is weighing new rules.
The big picture: Pay secrecy has led to large disparities that impact women and other underrepresented workers disproportionately. And while new laws may not solve every individual issue, requiring companies to disclose compensation will empower workers and force companies to be more aware of their competition.
State of: 17% of companies have already started to publicize salary range information on job ads even without legal pressures.
- An additional 62% of nearly 400 business leaders surveyed this summer said they’re planning or considering this, according to consulting firm WTW.
What they’re saying: There is currently a lot of “angst” among business leaders who have to figure out not only what different states are asking for, but also how to restructure pay policies and to communicate and educate existing workers, Mariann Madden, North America Fair Pay co-lead at WTW, tells Axios.
- Companies haven’t been willing to share pay information in the past and they might not be ready to share because there are existing knowledge gaps even inside organizations, she adds.
- “Sometimes [hiring] managers have limited information themselves about the pay programs and processes," says Madden.
What to watch: Pay equity examinations such as the ones that Salesforce conducts will start to pick up in pace as companies ready themselves for new laws.
- How narrow or wide pay bands are when they're disclosed, as well as how performance-based compensation including bonuses and equity plans are determined and doled out, remain big open questions.