- As salary transparency laws come into effect, employers are reducing their known salary bands.
- Most companies are complying with the new rules. Some are not, while others are posting fees even when they are not necessary.
State and local wage transparency laws passed in the past few years mean that more employers disclose salary amounts in job descriptions.
However, wages are not growing as expected. According to a report from job posting service ZipRecruiter, salary increases announced for new hires are slowing — and in some cases reversing, with companies now posting lower salary ranges.
After two years of salary increases, some companies are now leaving some jobs unfilled because candidates want more pay than the company is prepared to offer. Still, nearly half, 48%, say they’ve cut salary bands for certain roles in the past year, according to ZIP Staffing. The site surveyed more than 2,000 recruiters and hiring managers this summer.
“Recruiters are trying to reset candidate expectations,” said Julia Pollack, chief economist at ZIP Recruiter.
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During the severe labor shortage during the Covid-19 pandemic, employers were emphasizing the high level of their wages and paying bonuses, but this created problems for existing workers.
“While they were very competitive externally, they threatened internal equity and internal incentives,” Pollack said. “There must be a few [salary] Year-on-year growth to keep people around and involved.”
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Between 30% and 40% of employers are not complying with new state pay transparency laws, according to Revelio Labs, a workforce analytics firm. In states that had laws in place as of 2021, the compliance rate is around 70%.
In Washington state, job applicants and current employees can file a complaint or file a civil lawsuit if a company does not comply with the law. The state Department of Labor and Industries says it has received 307 complaints so far this year and has 39 complaints under investigation.
Companies in Washington that are found to be non-compliant also face multiple class action lawsuits. Attorney Timothy W. Emery, a partner at Emery Reddy, a Seattle-based workers’ rights law firm, has filed dozens of lawsuits against employers in the state.
“We still have a lot of clients who are struggling with pay equity,” Emery said. “We felt it was time to act on their behalf and put an end to these illegal practices once and for all.”
But there is also a spillover effect on companies that comply with wage transparency laws. According to Revelio Labs data, nearly 40% of firms post wages for jobs, even in states that have no requirements.
“With the rise of remote work, it’s a challenge for employers to figure out how to adjust their posts to comply with different state and local requirements,” said Lisa Simon, chief economist at Revilio Labs.
SalesLoft, an Atlanta-based inbound workflow platform, publishes payment for all of its jobs posted in the US.
“We don’t want to waste anyone’s time. [by taking] Throughout the interview process, says Katie Cox Branham, vice president of people at SalesLoft.
The company sets the wage rate every year.
“During our once-a-year pay raises, we review the salaries of existing employees and make adjustments to ensure that there is a balance between existing employees and anyone we bring in,” Branham said.
In addition to states and local jurisdictions requiring employers to post salary rates in job advertisements, workers have become more open to talking about pay with their peers.
“Gen Z, the new generation entering the workplace, is starting to demand salary transparency,” says workplace strategist, speaker and author Erica Keswin.
She advises companies to have a comprehensive strategy to address pay and understand what motivates their employees, from flexible work arrangements to family care benefits and growth and development on the job.
“It’s definitely not a one-size-fits-all kind of thing,” Keswin said.
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