How Pay Transparency Can Benefit Businesses

Next month, amendments will be made to New York’s existing pay transparency laws that will impact remote workers.

Previously, it was understood that the disclosure of compensation range in job posts was necessary for any position, whether that be a new role, promotion, or transfer opportunity, that would take place, at least in part, in the state. This interpretation led practitioners to believe that remote positions were covered by the law, as these types of employees could perform the work wherever they lived and that applicants to these roles could live in New York. 

The first part of the two amendments addresses this, changing the verbiage as part of a negotiation exchange to remove the inclusion of remote workers in this legislation. Now, the law states that the disclosure of compensation ranges only applies to roles that will be physically performed in New York. While this seems to narrow the scope, jobs that are physically performed out of the state but that report to a supervisor, office, or other worksite in the state will be required to list pay ranges. It should be noted that the scope of these amendments are different than New York City’s pay transparency law which is specific to the city itself.

Along with this, the amendments eliminate the statutory requirement for employers to maintain records of previous compensation ranges and job descriptions (although it would be in your best interest to keep track of these). There was also a definition included for what advertising for a job specifically means that would qualify for an employer to disclose pay range in the posting. According to SHRM, “‘Advertise’ means to make a written description of an employment opportunity available to a pool of potential applicants for internal or public viewing, including electronically.”

You last heard us talk about pay transparency in October 2022, when California followed the lead of New York and Colorado to pass legislation that required salary ranges to be listed in job postings. Not only that, but some leading job boards announced updates that will have a salary listed for any open role you have, regardless of whether a member of your team enters it; they’ll simply use an algorithm to calculate an estimated pay range.

This most recent passage of legislation means that there is a chance (no matter how slim it seems) that pay transparency laws could impact your organization at some point in the future. While these types of laws may seem like a marked disadvantage at first glance to many employers, there are some ways that pay transparency can actually benefit your organization — both immediately and further into the future. Read on to learn more.

Drive more applicants

When pay transparency is incorporated into already well-written job descriptions, applicants will know exactly what the role entails — and what range they can expect to earn, which can ultimately help you drive more applicants and improve quality-of-hire. According to Hireology’s 2023 State of HIring Report, nearly half (46%) of today’s job seekers are applying to more than 11 jobs during their job search. Why would they apply to your role if they have plenty of other options and they don’t know whether or not your role will pay what they need?

Now, you may be concerned that listing pay will only deter job applicants if your range is lower than a competing offer. But it’s important to remember that pay isn’t the only factor applicants consider when looking for a job. In fact, our study found that 91% of job seekers will take a lower paying offer if you offer other benefits they’re looking for, such as flexibility and career growth.


Learn more about tthe modern job seeker in our research-based report, The Modern Worker.

Reduce candidate ghosting

In the same study mentioned earlier, 34% of candidates who have said they ghosted a job opportunity in the past said they did so because they found out the job wasn’t aligned with their needs. By incorporating pay transparency into your job postings, those not truly interested in the position will be less likely to apply — which means you’ll spend less time on candidates who are likely to ghost later on and more time on candidates who are truly a fit for your role. 

When you drive more candidates who are aligned with your business’s needs, you’ll be able to run a much faster hiring process overall. This is good news for you: a faster process means you’ll get great folks in seats sooner and you can use your HR team’s time for other tasks that drive revenue at your organization.

Close the gender wage gap

Pay transparency laws are more than just a legislative effort to stabilize wages — they’re largely being put in place to close the gender wage gap. Going into 2022, it was reported that women earn an average of 83 cents per dollar that a male counterpart makes. While this may seem like an overall improvement, this finding has revealed that the pandemic slowed improvement in the gender pay gap.

By mandating that job descriptions for open roles include pay transparency your business can effectively improve the diversity, equity, and inclusion efforts at your company as an afterthought. The premise is this: the salary range is already public, so with frequent training, your hiring managers will be able to compete against any unknown gender biases they may hold by offering a woman with the same work history and education the same salary that they would a man with the same qualifications. The workforce of tomorrow does not look like the ones we’ve experienced in the past; working on your DEI initiatives now by helping to close the gender wage gap will only help your company succeed in the long term.

Pay transparency can seem like a daunting ask of small businesses, especially given the recent instability of the hiring market. While these pay transparency laws have only been put in place in three states of the country so far, there’s no telling if or when other states will pass similar legislation. The good news is that pay transparency benefits both you and your candidates, for many of the same reasons listed here.

Have questions about pay transparency laws at your business? Let’s connect to how Hireology can help you remain compliant no matter where you are in the U.S.!



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