This article was written by Rochele Bertasso, HR Business Partner at Helpside.
Pay transparency laws are a growing trend among states and can create challenges for multi-state employers. Recently, several states and municipalities have passed pay transparency laws, creating yet another set of requirements for employers to contend with in the battle for compliance.
To date, at least 8 states and 10 municipalities require some form of pay transparency. Most require disclosing the wage or salary range for a position in a job posting or upon request by an applicant or current employee. For example, California, Washington, Colorado, and New York have all passed legislation requiring that covered employers include salary ranges in their job postings. Washington and Colorado also require a description of benefits and other compensation in the posting. Other state laws specify that employers cannot use open ended salary ranges such as “$45,000 and up” or avoid the requirement altogether by excluding candidates from that state.
States with pay transparency laws
California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington have all enacted state pay transparency laws. New Jersey, New York, and Ohio are among states with municipalities that have enacted their own laws in addition to any prescribed state law.
So, what should employers do?
- First, research to see if you are covered by any pay transparency laws.
- Second, carefully scrutinize jobs that could be performed by remote workers in other states where pay transparency laws apply.
- Next, determine what must be disclosed either in the job posting to the candidate or to employees and when. Every law is different on these points.
- Do pay or salary ranges need to be provided on the job posting or to the candidate after an interview and only upon request?
- Do current employees have rights to pay range information?
- Does the employer have to disclose benefits information and to what extent?
What else should employers consider?
With pay transparency laws becoming more prevalent, employers should evaluate their compensation practices. Are they fair and easily justifiable based on things like experience, education, and performance? Are there unexplained inequalities? If so, taking proactive measures now to correct issues may be better than waiting until they are brought to light by employees.
Be careful about restricting pay discussions
One last thing to note as it relates to an employee’s right to discuss their pay. Often employers mistakenly try to restrict an employee’s ability to discuss pay in the workplace in an effort to reduce conflict and morale issues. The National Labor Relations Act (NLRA) expressly gives employees the right to discuss their pay and other terms and conditions of their employment with each other. Employers must take care to avoid restricting that right through rules, policy or even management. Employers with questions about pay transparency laws or employee rights under the NLRA should consult with experienced employment counsel. If you are a client of Helpside, feel free to reach out to one of our HR experts at email@example.com