NEW YORK (AP) — Starting this week, job seekers in New York City will have access to a key piece of information: how much money they can expect to earn for a job posting.
Similar wage transparency laws are being passed by a small but growing number of cities and states across the country in an effort to close the pay gap for women and people of color.
Seher Khawaja, senior economic empowerment attorney at Legal Momentum, whose organization helped draft the New York City law, said wage transparency “gives existing employees and workers information to better assess how positions are valued at their workplace and whether they are paid fairly. “
It also enables employers to avoid liability.
“It forces them to think about how they determine pay and avoid discriminatory practices that have paved the way for them before,” Kavaja said.
Harris Silich, vice president of Artisan Talent, a staffing agency that hires hundreds of creative professionals in New York and across the country, said implementing the law may initially be difficult for an employer, but he thinks “everyone sees the value.”
“Every employer has once been an employee,” he said.
Business groups, including New York’s five chambers of commerce, said the law could create “dissatisfaction in the workforce and demands for adjustments to existing pay scales that the employer may not be able to afford.”
“During labor shortages or in the context of achieving diversity goals, the posted maximum may be significantly higher than historical salary ranges.” the groups write in a letter to the New York City Council.
Colorado was the first to pass a wage transparency law in 2019, followed by California, Maryland, Nevada, Rhode Island, Connecticut, and Washington, D.C., as well as cities like Cincinnati and Toledo, Ohio.
Salary disclosure rules vary. In some cases, they require employers to share the information upon request or after an interview, with exceptions for small businesses. In other cases, employers must publish salary ranges.
New York’s law is similar to Colorado’s, but it only applies to employers with four or more workers, not all businesses. That represents a third of the city’s employers but roughly 90 percent of the workers, according to state Labor Department statistics.
The new wave of legislation marks a shift in who bears the burden of ensuring pay transparency, with more employers now taking responsibility for creating an open work environment, rather than leaving employees to find out how their pay compares to their peers and whether to seek fair compensation, according to Andrea Johnson, director of state policy at the National Women’s Law Center.
Mary Ramsey, 55, a health educator based in Syracuse, N.Y., who is looking for a higher-paying job, said she hopes New York’s wage transparency law will soon apply statewide, something lawmakers in currently considering.
“Employing people should be seen as a two-way contract,” she said. “You’re looking for a good partnership.”
In September, California Governor Gavin Newsom signed a law requiring every employer with at least 15 employees to post pay scales 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 wages by race, ethnicity and gender.
In 2021, the median pay for women working full-time was about 83 percent of what men were paid, according to federal data, and women earn less than their male counterparts in nearly every field. For women of color, the numbers are even worse. Report of National Partnership for Women and Families found that black women made 64 cents for every dollar paid to non-Hispanic white men. For Hispanic women, it’s 54 cents, and for Native American women it’s just 51 cents.
Khawaja said the demographic disclosure is a welcome addition to the California law, noting that one of the most important causes of persistent pay disparities is occupational segregation by gender and race. As long as women and people of color work disproportionately in lower-wage industries, pay gaps will exist, she added.
“A disproportionate number of women work in lower-paid jobs,” Kavaja said. “So legislation to increase the minimum wage and eliminate exemptions like the tipped wage for certain categories of workers like restaurant workers is really essential to closing that gap.”
Here are some other things you should know about salary transparency:
Discussing pay with colleagues is legal
Johnson stresses that it’s perfectly legal to talk about pay in the workplace, even if employers don’t encourage it.
“The National Labor Relations Act protects employees who discuss pay because it protects employees who discuss workplace conditions, and pay is a condition of employment,” she said.
A lack of transparency around pay tends to disadvantage women and people of color — the same groups who are statistically less likely to fare well in negotiations, Johnson added.
It’s good to keep 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 prohibiting employers from even asking, a practice that can drive down wages and lock in unfairness.
“There is a fundamental information asymmetry in wage bargaining,” said Kate Bann, chief economist at the Washington Center for Equitable Growth. “Employers inherently have better information about wages, which means they have an upper hand. The side that has more information will do better.
The same goes for salary expectations
Some employers circumvent the law’s limit on salary history by asking applicants to share their salary expectations, but Bahn said that can have the same effect of lowering offers.
That’s why Laura Adler, an assistant professor of organizational behavior at the Yale School of Management, said it’s better to have salary transparency laws that require employers to disclose salary ranges — as in New York, Colorado and California. Such laws make it harder for employers to circumvent the rules.
“The more policymakers can ground their interventions in the way companies actually run their businesses, the more effective those interventions will be,” she said.
When negotiating for a new job, know that you have the right to refuse to share salary expectations so that the employer will open the offer, advocates advise.