More employees are demanding pay transparency. Despite many employers’ reluctance to embrace this emerging practice, it has gained a stronger foothold in 2023. In fact, pay transparency laws are impacting more employers as a growing number of states and localities require organizations to share pay information with applicants and employees. Here are some pay transparency basics to know for 2023:
What Is Pay Transparency?
Pay transparency is the practice of openly sharing pay-related information with current and potential employees. It helps ensure fairness and equity in the workplace. This information generally includes pay scales or salary ranges.
Pay Transparency Laws
Colorado was the first jurisdiction to enact pay transparency laws in 2021. Since then, 14 states and localities have enacted their own pay transparency laws. In fact, an estimated one-fourth of all U.S. workers were covered under pay transparency laws at the start of 2023. Pay transparency laws vary depending on the jurisdiction. For example, covered employers in California must provide pay scale information in any job posting, and covered employers in New York City must provide the minimum and maximum annual salary or hourly wage for all job postings, promotions and transfer opportunities.
Pay transparency laws present compliance challenges for employers since they vary based on the state or locality. Employer compliance difficulties are often greater for organizations that recruit and hire employees across state lines, since hiring remote workers can trigger obligations in states where employers do not have a physical presence.
Regardless of current applicability, even employers who are currently unaffected by local mandates should consider how pay transparency practices may impact their workplace or labor trends. Reach out today for additional resources.