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Salary Transparency Law Goes into Effect in New York City

Employers Take Note of Salary Postings

New York City’s salary transparency law has gone into effect. Employers with four employees or more must now post salary ranges in their job postings. Other states with similar laws include Colorado, California and Washington.

What is the purpose of the salary transparency change?

The purpose is to create greater pay equity. It is less likely that employers would offer lower salaries to women and minority groups when salaries across the board are transparent. This is meaningful for racial groups that have been underrepresented and also for women.

Are there downsides?

According to Reuters, NYC business groups showed concern that this practice might make it harder for small businesses to attract employees. Larger companies with more resources can outbid them.

In addition, existing employees will be able to see the value placed on different jobs. This would encourage workers to focus on applying for higher paying jobs.

Negotiating for higher pay might become easier, but the focus could also detract from creating a diverse team effort among employees in all positions.

What are the upsides?

Forbes magazine is onboard with the change. In fact, it suggests that businesses regardless of location should start disclosing salary ranges on job postings. It goes even further by saying there are three ways employers can promote pay equity:

  • Share employee salary ranges
  • Conduct pay audits frequently
  • Foster salary sharing among employees

In addition, the Society for Human Resource Management (SHRM) also encourages employers to openly discuss and negotiate salaries. Furthermore, 58% of U.S. companies already conduct pay equity reviews. Their pay audits are to promote pay equity.

As an employer, do you have legal concerns about pay equity?

If you have questions about how employment laws affect your business, arrange a consultation with an experienced employment defense lawyer. Call Stephen D. Hans & Associates, P.C. at (718) 275-6500.