NEW YORK (AP) — Starting this week, job seekers in New York will have access to key information: how much money they can expect to make for an advertised opening.
New York will require employers starting Nov. 1 to disclose “a bona fide salary range for every advertised job, promotion and transfer opportunity,” according to the city’s Human Rights Commission.
Similar pay transparency laws are being passed by a small but growing number of cities and states across the country in an effort to address pay disparities for women and people of color.
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Seher Khawaja, senior counsel for economic empowerment at Legal Momentum, whose organization helped draft the New York City law, said pay transparency “gives existing employees and workers information so they can better assess the value of positions within their workplace and whether they are paid fairly.”
It also gives employers a way to avoid liability.
“It puts your feet on fire to think about how they set wages and to avoid the discriminatory practices that were creeping in before,” Khawaja said.
Haris Silic, vice president of Artisan Talent, a staffing agency that places hundreds of creative professionals in New York and across the country, said implementing the law may initially be difficult on the side of the employer, but he thinks “everyone sees the value in it”.
“Every employer was an employee once,” he said.
Business groups, including New York’s five borough chambers of commerce, argued that the law could create “discontent within the workforce and demands for adjustments to existing pay scales that the employer may not be able to afford”.
“In the event of a labor shortage or as part of achieving diversity goals, the posted maximum may be significantly higher than historical salary ranges,” the groups wrote in a letter to the New York City Council. .
Colorado was the first to pass pay transparency legislation in 2019, followed by California, Maryland, Nevada, Rhode Island, Connecticut and Washington, along with cities like Cincinnati and Toledo, Ohio.
Salary disclosure rules vary. In some cases, they require employers to share information upon request or after an interview, with exceptions for small businesses. In other cases, employers must post salary scales.
In Colorado, for example, a recent job posting on the Indeed hiring site for an executive assistant in Denver advertised a salary range of $57,131 to $88,516 per year. A human resources data analyst role showed a range of $67,488 to $111,355 per year. A retail position at Target advertised an hourly wage of $23.75 to $40.40.
New York City’s law is similar to Colorado’s, but it only applies to employers of four or more workers rather than all businesses. That’s one-third of the city’s employers but about 90% of workers, according to state Department of Labor statistics.
The new wave of legislation marks a shift in responsibility for making wages transparent, with more employers now being held accountable for creating an open work environment instead of leaving it up to employees to figure out how. their pay compares to that of their colleagues and whether they should seek fair compensation, according to Andrea Johnson, director of state policy at the National Women’s Law Center.
Mary Ramsay, 55, a health educator based in Syracuse, New York, looking for a better-paying job, said she hopes New York City’s Pay Transparency Law will come into effect soon. statewide, which lawmakers are currently considering.
“Hiring people should be seen as a two-way deal,” she said. “Looking for a good partnership.”
In September, California Governor Gavin Newsom signed a law requiring all employers of at least 15 employees to post salary grids with their job postings. The law also went further than Colorado and New York by requiring large employers to submit an annual report to the California Department of Civil Rights, breaking down salaries by race, ethnicity and gender.
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In 2021, the median wage for full-time female workers was about 83% of male wages, according to federal data, and women earn less than their male counterparts in almost every field. For women of color, the numbers are even worse. A report by the National Partnership for Women and Families found that black women earn 64 cents for every dollar paid to non-Hispanic white men. For Latin women it’s 54 cents and for Native American women it’s only 51 cents.
Khawaja said the disclosure of demographic information is an encouraging addition to California law, noting that one of the biggest reasons for persistent pay inequality is occupational segregation by gender and race. As long as women and people of color work disproportionately in low-wage industries, pay gaps will exist, she added.
“A disproportionate number of women work in low-wage jobs,” Khawaja said. “So legislation to raise the minimum wage and eliminate exceptions, such as tipped wages for certain categories of workers like restaurant workers, is really key to closing this gap.”
Here are a few other things to know about pay transparency:
Discussing compensation with colleagues is legal
Johnson points out that it’s perfectly legal to talk about pay at work even if employers discourage it.
“The National Labor Relations Protection Act protects employees who discuss pay, because it protects employees who discuss working conditions, and pay is a working condition,” she said.
A lack of transparency around pay generally disadvantages women and people of color — the same groups who are already statistically less likely to do well in negotiations, Johnson added.
It’s OK to withhold your salary history
Don’t feel obligated to disclose your salary history to a potential employer. In fact, some cities and states have passed laws that even prohibit employers from asking, a practice that can drive down wages and lock in inequality.
“There is a fundamental information asymmetry in wage bargaining,” said Kate Bahn, chief economist at the Washington Center for Equitable Growth. “Employers inherently have better wage information, which means they have the upper hand. The part that has more information will fare better.
Ditto for salary claims
Some employers circumvent the legal constraint of salary history by asking applicants to share their salary expectations, but Bahn said it can have the same effect of reducing offers.
That’s why Laura Adler, an assistant professor of organizational behavior at the Yale School of Management, said it’s better to have pay transparency laws that require employers to disclose salary ranges, like in New York, Colorado and California. These laws are more difficult for employers to circumvent.
“The more policymakers can base their interventions on how companies actually run their business, the more effective those interventions are likely to be,” she said.
When negotiating for a new job, know that you have the right to refuse to share salary expectations in order for the employer to open the offer, lawyers advise.