A strange tradition of hiring in America is that the first question job seekers want to ask is – how much does a job really pay? – Often addressed last. In the working world, it’s common for employers to keep that important information secret, keeping applicants in the dark, while giving hiring managers a competitive advantage in setting salaries.
But that is changing, and starting Tuesday New York City will be the latest jurisdiction to require most businesses to post salary limits for open jobs.
The Big Apple is one of a growing number of US cities and states that are taking steps to shine a light on employee pay. The new laws require companies to disclose salary ranges in job postings and on their websites, even with the bargaining power between employers and employees, empowering workers as well as women and people of color. for bridging the long-standing wage gap.
In California, under the law that took effect January 1, 2023, companies with more than 15 employees must include salary limits for jobs and share the same information with current employees. In New York, government legislation requiring private sector employers to disclose salary ranges in job postings is awaiting the signature of Gov. And Colorado, Connecticut, Maryland, Nevada, Rhode Island and Washington have enacted their own wage transparency laws.
“Goodwill” Salary Range Required
New York City law that takes effect November 1 requires businesses to include a “goodwill” salary range for each job advertised. Employers are not required to disclose information about bonuses, benefits and other forms of compensation.
“Going forward, every time a job is actually posted on a website of type type, in the workplace, or is advertised in a newspaper or online, [job seekers] One should expect to see a salary range for that position if the job is in New York City or can be done in New York City,” Domenick Camacho Moran, a New York-based employment attorney at Ferrell Fritz, told CBS MoneyWatch. that there is pay equity based on the work performed as opposed to the person applying for the job.”
In other words, if an employer advertises a job that pays between $60,000 and $90,000 per year, anyone who applies for the position can expect to start compensation within that range. regardless of their age, gender or race.
“It’s a situation that in the past tended to favor employers who could ask about your salary and not tell you what it was going to offer,” said David Gordon, a New York City law firm. A partner exercise in the employment of Kay Mitchell, Silberberg and Knup.” This is part of an overall shift of information from employer to employee that will help some employees negotiate their compensation.”
The emphasis on wage transparency in some cities and states also puts pressure on firms that are not legally required to disclose wage ranges to do so. Nearly all workers surveyed by employment site Monster.com said that employers should disclose salary ranges in their job postings, and more than half of those surveyed said they would not apply to a job that did not disclose that. Not how much it pays.
“Employers must show their card”
The New York City law works in conjunction with a January 2020 law that prohibits employers in the state from asking potential and current employees about their pay history, which seeks to close the pay gap and eliminate potentially discriminatory compensation and hiring practices. It was also enacted to help
The laws would help workers decide which jobs they would apply for based on salary ranges, as well as discourage employers from seeking “discounts” on employees who might otherwise accept a smaller paycheck.
“Employers are in a position where they have to think very carefully about what they believe in good faith that a particular position should pay,” Jason Habinsky, president of Haynes Boone’s employment practice in New York City, told CBS MoneyWatch. “Employers have to show their cards and put them on the table first. You can’t make a decision based on someone’s membership in a protected category.”
Salary should be disclosed as a range, not “up to” or “at least” a fixed figure format.
Habinsky cautions that some employers may advertise categories so broad that they become useless.
“A potential risk is that some employers are not going to act in good faith and, instead of providing a good faith limit, they will provide a very broad range of ways to cover themselves… are going,’ Habinsky said.
Could lead to more word-of-mouth hiring
Under New York City law, companies are not required to disclose components of compensation, including bonuses, benefits, commissions or tips. And the rules only apply to external job ads and internal postings. This means that if an employer verbally takes a new hire, they are not required to disclose the salary range of the role before making an offer.
“The law does not prohibit employers from hiring without using an advertisement,” said New York employment attorney Josh Zuckerberg. “There’s no law that says you have to advertise posts.”
This can lead to more word-of-mouth hiring.
“Some types of employers might call a headhunter and say, ‘We’re looking for this type of position, what can you find for me?’ – If you don’t want to broadcast pay,” Zuckerberg said. “There is a chance that there will be less transparency, not more.”
The hot job market is raising wages for workers and forcing employers to pay top dollar to attract talent. An employer may have to pay a new hire more money to perform the same job as an existing employee, potentially creating tension and division in the workplace.
Habinsky said, “This law can result in a number of potential repercussions. You can have an existing employee who will look into what is being paid to potential employees, and it can result in disgruntled employees and hurt feelings. Is.”
According to workplace and employment lawyers, any employer with four or more workers, at least one of whom works in New York City, must be prepared to comply with the new rules.
Gordon said, “It would be prudent for any employer who does not wish to violate the law to monitor any job postings, internal or external, to ensure that they comply with the requirement of the law.” Huh.”
Human resources employees should also be prepared to explain any pay discrepancies, said Carol Goodman, president of Herrick Feinstein’s employment practice.
“HR departments must be prepared to ask questions to existing employees, who may call and say, ‘I see a posting for the same position as I am doing but my pay is lower,'” ” He said. “HR professionals will want to be prepared to talk about this with their employees.”