Pay Transparency & Equity
Pay transparency is on everyone’s tongue right now. It’s being talked about everywhere around the country. If you hear the phrase ‘pay transparency’ then you also hear ‘pay equity.’ What do they mean? And are they the same and/or interchangeable? Pay transparency can help build employee trust and retain talent and is required in many states.
Expanding Across the U.S.
Pay transparency laws are popping up all over the country at state and local levels. These laws take the Equal Pay Act of 1963 a step further and requires businesses to show pay ranges or report company wages. Rather than placing the responsibility on the jobseeker or employee to determine how their pay compares to coworkers, and what fair compensation might be, the laws shift that expectation to the employer. Advocates say it benefits women and people of color, who statistically fare less well in hiring negotiations.
State and Municipalities
Currently there’s new legislation in states and municipalities like New York City, California, Washington, Colorado, Maryland, Nevada, Connecticut, and Rhode Island. Some Ohio and New Jersey localities have also enacted similar legislation and expanding across the U.S. Resulting in employers being more transparent about pay to stay competitive in states that require employers to post salary ranges.
Job Postings
Even in states where it’s not currently required by law employers are increasingly posting salary ranges for job openings. U.S. job postings that included salary ranges more than doubled since 2020. 43.7 per cent of U.S. job postings contained salary ranges last month, which is up from 18.4 per cent in February 2020.
What is pay equity?
Pay equity is paying employees who have similar job functions with comparably equal pay, regardless of their gender, race, ethnicity, or other status. It’s not only important to a business’s bottom line, but it also builds employee trust, reduces turnover as well as building a positive Brand and social responsibility.
Pay transparency is one of the hottest topics in business today. Clear communications about compensation encourages a culture of fairness.
The Cardinal Culture
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