Note to job seekers: Companies may be required to post a salary range in your area

By Clint Rainey

January 31, 2022

Note to job seekers: Companies may be required to post a salary range in your area

New York City will soon require companies to list the salary range when advertising a new job opening—the most sweeping law yet in the growing trend toward greater workplace pay transparency. The rule, which became law after Mayor Eric Adams declined to veto it, will go into effect on May 15. Employers with at least four employees will have to post a minimum and maximum salary for jobs they’re trying to fill in the city, to give workers, particularly women and people of color, more agency in job negotiations. However, despite Corporate America at this point voicing near-universal support for ending the country’s pay gap, a number of businesses and business groups are still calling the measure unfair.

The law is widely supported by human-rights groups and worker advocates

Greater salary transparency gives job applicants more negotiating power, decreasing the odds of getting lowballed. Another reason New York lawmakers argued the law was necessary is to address pay disparities based on gender or race. Even though pay discrimination is illegal in every state, a sizable gender wage gap still exists in America—in 2020, women earned 84% of what men made, and women of color earned even less, according to Pew Research Center.

Supporters also believe salary transparency will make the hiring process fairer and more efficient. It obviously helps the job applicants. But employers also get a stronger applicant pool—a self-selecting group that already feels the salary is acceptable. Current employees benefit, too: These ranges being posted publicly gives them context to see how well their own salaries are keeping pace with their skills’ market value.

“Our immediate goal is not to penalize, but to educate and work together with the city’s business community,” says the New York City Commission on Human Rights, which is tasked with enforcing the new law. The public will be able to file complaints, it adds, which will result in the commission investigating to see if the employer has violated the law.

But a growing number of business groups are speaking out against it

On Friday, the Wall Street Journal wrote that the new law “has surprised some employers.” The Partnership for New York City—a group founded by David Rockefeller in the ’70s that includes many of the city’s biggest employers as members—is calling it “the wrong solution,” arguing the mandate creates the impression that “New York is unfriendly to business.” Employers worry the requirement will be “burdensome and time-consuming to implement,” the group told the Journal, because not every job category has a salary range.

Laws like New York’s can create other HR headaches, companies are arguing. Say they post a job listing that advertises a salary between $100,000 and $125,000—people who make more than $125,000 might not apply, they say. Another worry is that HR departments will have to invest in additional tools or services to analyze market pay rates in order to ensure they’re competitive.

Companies that support the law note this might be over-complicating things. ChartHop, a New York business analytics firm, has already started putting salary ranges on its job postings—but with a caveat underneath: “Should you feel strongly we’re not in line, we highly recommend you to reach out and let us know.”

Businesses have fought transparency laws in court

Last year, Colorado started requiring employers statewide to include pay ranges in job listings. A Colorado business group called the Rocky Mountain Association of Recruiters tried to get the law struck down in federal court, arguing it wasn’t fair to require them “to make fundamental changes to their recruiting systems.” Colorado pointed to data showing that disclosing salaries “curtails discrimination in compensation” by making it a decision “based on objective business reasons,” making it harder for the number to be affected by an applicant’s gender or race. The court dismissed the group’s lawsuit.

But it’s part of a growing trend, regardless

Colorado’s law is more expansive than New York’s in one key way: Companies based anywhere must disclose salaries for jobs that could be performed remotely by a Colorado worker. (To sidestep the law, big companies like Johnson & Johnson started posting openings that specifically stated the work couldn’t be performed in Colorado.)

Meanwhile, Nevada and Connecticut have similar pay transparency laws on the books. Rhode Island’s, which requires pay ranges be disclosed under certain conditions, goes into effect at the first of next year. Three other states—California, Washington, Maryland—have laws requiring disclosure, but only upon request. (Each varies slightly: California says any job applicant who gets an initial interview is entitled to know the pay. Washington requires disclosure at the time the applicant gets a job offer. Maryland tells employers to release the pay range to any job applicant who requests it.)

While companies can take some solace in knowing that America isn’t in danger of becoming Scandinavia—where pay is made public by publishing everyone’s tax returns—the trend stateside looks like it will continue, with states like Massachusetts and South Carolina also now considering pay transparency laws.