“I wish it was more transparent because that’s what it’s all about,” Livesay said.
While about a dozen states and municipalities, including California and Washington state, now have laws on the books as of January requiring pay transparency in job postings, corporate America is struggling to adapt. Companies struggle to keep up with the patchwork of legislation, establish meaningful salary ranges, and engage in compensation conversations with applicants and their own employees. Meanwhile, job seekers say they’re frustrated with approaches that undermine the goal of the pay disclosure policy: to level the playing field by dragging the compensation conversation into the public eye.
When the pay disclosure laws came into effect in key job markets, some major companies such as Alphabet, Wells Fargo, IBM, and American Express have chosen to publish salary scales for all US positions, regardless of whether it is mandatory or not. (Alphabet, Wells Fargo and IBM all declined to discuss that decision.)
California law forces most companies to provide salary information in job postings
But according to Frank Kerbein, director of the Center for Human Resources at the Business Council of New York State, Inc., the patchwork of pay transparency laws creates a burden for many employers they can’t handle. the group’s 3,500 members have fewer than 50 employees.
“You have a different battle depending on the size of your organization,” Kerbein said. “The Walmarts, the Targets, they’ll figure it out.”
For Chat Joglekar, CEO of Baton, a New York City-based start-up that helps small businesses get valuations, it seemed like the law went into effect without much guidance or fanfare. He said he favors transparency and thinks it is a “net good for the ecosystem”. But the way it unfolded felt “kind of retarded,” Joglekar said, “like it was up to us to figure it out.”
“When we did this, there was the concern, ‘Are we doing it wrong?'” said Joglekar, trying to figure out how to present the salary disclosures, especially without a huge staff team to help. So far, he said, things are going well. “Given the few jurisdictions that have done it, it would be nice if there was even more pressure to get everyone on the same playing field,” Joglekar said.
$330,000 to $1.8 million? Video game workers question public salary ranges.
Compensation so far According to Davia Temin, CEO of Temin and Company, a crisis management firm, white-collar workers across America have been a “black box of sorts.” She said she thinks the new laws will inevitably create some tension between generations, with older workers used to being silent about pay and younger workers pushing for transparency.
“If you start taking that box apart, it’s probably going to be more uncomfortable than comfortable for a long time,” Temin said. “How that awkwardness translates to business performance is another thing.”
Businesses are gradually taking off, says Roger Lee, co-founder of Comprehensive.io, which tracks pay ranges for job openings in the tech industry. According to the site, just over a quarter of California tech companies were compliant when the new state law went into effect Jan. 1. Since then, however, the number has risen to about 54 percent as companies adapt to the new reality.
In New York City, where the wage rules went into effect in November, compliance is even higher, at nearly 65 percent.
“In general, most companies comply in good faith,” Lee said, “but there are some outliers.”
The main complaint against employers so far seems to be that the salary ranges are too broad. For example, a software engineer working at Netflix in Los Gatos, California, “or remotely,” could earn $90,000 to $900,000, according to the company’s post. A program manager at Tesla in Fremont, California, could earn anywhere from $68,000 to $222,000, according to a job posting. A senior product manager at cryptocurrency exchange Okcoin in San Jose could earn between $175,167 and $439,000, the company’s posting said.
Such broad ranges can undermine the target of pay transparency laws, which aim to leverage openness around a historically private topic to address race and gender pay gaps that persist in the United States.
Women in the United States earned 17 percent less than men by 2021, according to the most recently available data from the Organization for Economic Co-operation and Development. For women of color, the gap tends to be wider: Black women earned about 88 percent of the average white women’s wages in the second quarter of 2022, according to data from the Bureau of Labor Statistics, while Hispanic women’s average income was about 78 percent. percent of white women.
Employers cut salaries in vacancies to keep wages down
Each law has a slightly different set of requirements; however, most guidelines for setting pay scales come down to “what the employer reasonably expects to pay,” he said Andrew Turnbull, partner at law firm Morrison Foerster. But the pay equation varies wildly from company to company and role to role. He advises corporate clients to review compensation across their business so they can catch and correctly inequalities. He also warns clients that pay discrimination cases are likely to mount the longer these laws are in place as workers compare pay differentials.
“The biggest caveat I have is to make sure you understand your payment practices and know how to explain them,” Turnbull said. “This is one of those problems that won’t go away.”
For job seekers, the discomfort of employers was obvious from the start. On November 1, as New York City’s Pay Transparency Act went into effect, Jennifer Arellano took a call from a recruiter at a New York employment agency about a payroll issue. When Arellano mentioned the new law and inquired about the pay scale, the recruiter hesitated and then hung up.
“I said, ‘Hey, I’ve been disconnected, can you tell me what the range is?'” Arellano told The Post. “He was like, ‘Oh yeah, we must have clicked.’ He didn’t want to talk to me.”
The need for pay transparency is growing, especially among younger workers. TikTok channels like Salary Transparent Street have been viewed millions of times for interviewing street workers about how much they earn.
According to Lizzie Mintus, CEO and founder of Here’s Waldo Recruiting, which works with video game companies, pay transparency laws have raised many questions about how to compensate people who do the same job but live in different cities or different countries. industry.
Previously, companies might have adjusted the cost of living depending on each employee’s location. Utilities, they’re under more pressure to come up with options that cover everyone, or post and monitor posts for different locations. Some companies have taken the approach of offering pay scales for jobs in certain areas while adding a disclaimer that the actual salary will shift depending on age, experience level or other factors.
“Having to give the ranges has led to internal reflection from business leaders about what is fair and what is not,” Mintus said.
A travel writer tweeted her salary, sparking a trend: ‘I just want people to get paid’
Even as companies move towards transparency, an open discussion about remuneration remains controversial.
When Ashley Ruba decided to move from academia to the private sector, she had no idea how much more she could have earned. After living on about $50,000 for years during her postgraduate scholarships, she was surprised when she was offered more than $100,000 to work as a contractor at Meta. Then she spoke to a friend in the same role, who said he made $30,000 more. She asked for more and got it.
Four months ago, I posted my UXR salary on academic Twitter.
As a postdoc, I had no idea how much more money I could make with UXR, so I wanted to share this information with others considering similar decisions.
The reaction was much worse than I expected. 1/ pic.twitter.com/KiQD09Dukg
— Ashley Ruba (@ashleyruba) January 17, 2023
Ruba decided to share her experience on social media, hoping to arm others with the kind of information she would have liked. The negativity of the responses surprised her. People called her tacky for talking about money like that openly. Others accused her of bragging. Some said that PhD students earned a low salary because it has always been that way. She suspects the pullback was particularly strong because open salary discussions are so rare in academia.
“Just sharing that information provoked very spicy reactions from some people,” Ruba said. “Salary is still a bit of a taboo.”