Salaries and money, in general, are becoming less and less of a taboo subject. With the onset of the internet, salaries are no longer private and personal; they have been published online and are a central topic of conversation among those in the workforce. As the culture surrounding salaries is changing, the laws regarding disclosure of them are progressing too.
New York is joining California, Washington and Colorado in passing pay transparency laws. Under the authority of these laws, states will be required to disclose salary pay ranges in job postings. Starting May 15, it will be illegal to advertise jobs in New York without including the minimum and maximum salaries available for the job.
These new pay transparency laws have been deliberately left vague, not specifically defining the requirement to “advertise” salaries or distinguishing between jobs posted internally and externally. The pay transparency law does not qualify what “salary” encompasses or express any requirements for positions that are unsalaried.
This law will be enforced through the dissemination of rules and imposition of civil penalties of up to $125,000 under the domain of the New York City Commission on Human Rights.
Pay transparency laws are intended to help bridge the wage gaps experienced by minorities. Through publishing salaries and making this information more accessible to employees, businesses can no longer pay employees different salaries simply because of their backgrounds.
Instituting a pay transparency policy has the potential to completely eradicate the wage gap as demonstrated in a Payscale study. This study results indicated that women who are employed at organizations that were open about wages were paid on average $1.00-$1.01 to the wage of men.
With businesses facing worker retention issues during the pandemic, these new pay transparency laws are an effort to combat this pressing issue. Pay transparency laws have been shown to increase employee productivity and job satisfaction. Because employees know what their maximum salary is and know that if they progress and improve their performance they have an equal opportunity to achieve a higher salary, they are motivated to work harder and are more committed to their organization.