Employers, Prepare For Wage Transparency Laws

October 4, 2022

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Source: BenefitsPRO, by Willa Hart

What’s next for wage equality? More wage transparency laws. Across the country, multiple states and cities have passed or are currently considering legislation which would require employers to offer prospective workers more information about their compensation. The laws may give female workers more bargaining power, while drawing attention to differences in salaries between different workers, according to the New Jersey Law Journal.

Currently, seven states have wage transparency legislation on the books. Colorado was the first state to pass such a law, when, in 2021the Equal Pay for Equal Work act went into effectOther states with similar laws include California, Connecticut, Maryland, Nevada, Rhode Island, and Washington. Some cities have also passed wage transparency legislation, including New York City, Jersey City, and Cincinnati.

According to some experts, the laws are a win for wage equality. “More information about pay range will give employees more bargaining power and leverage as they’re negotiating starting pay,” says Christine Hendrickson, vice president of strategic initiatives for Syndio, a Seattle software company, according to the New Jersey Law Journal. “As starting pay is far and away the most impactful pay decision, getting started right means you have a good ground for equity moving forward.”

But the laws have introduced complications, too. For instance, many employers don’t know if they’re legally obligated to obey the laws for remote work positions. In fact, after Colorado introduced their laws, some companies decided to exclude remote candidates from Colorado from consideration for their open positions to avoid any potential wrongdoing, according to the Denver Post.

David Rapuano, an employment lawyer, says that it can be hard for employers to know what laws apply to them – especially if they’re small businesses who can’t afford to consult lawyers on the matter. “It becomes incredibly burdensome and incredibly easy to run afoul of them despite every good intention,” he says. “The question is, is the cost worth the benefit? And I don’t know the answer to that.”

Transparency laws aren’t the only wage equality legislation on representatives’ dockets. Some states, including Illinois and California, have passed or are considering legislation which requires companies to report the salaries of their employees to the government, alongside information about their race, ethnicity, and gender. The goal of the legislation is to be able to monitor for potential wage discrimination.

 

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