More and more states are requiring companies to list salary ranges on job postings – here’s where – NBC New York

Vermont is the latest state to pass a pay transparency law, joining a growing list of states, provinces and cities where employers are legally required to disclose their salary ranges to job applicants.

Vermont’s law, which takes effect next year, is also among a handful of recently passed legislation that will soon entitle workers to pay ranges in the near future:

  • Washington, DC: Effective June 30, 2024
  • Maryland: Effective October 1, 2024
  • Illinois: effective January 1, 2025
  • Minnesota: effective January 1, 2025
  • Vermont: effective July 1, 2025

With these updates, an estimated 1 in 3 workers will be affected by pay transparency laws by 2025, said Lulu Seikaly, senior employment advisor at Payscale.

Some pay transparency laws require an employer to include the target pay range for a position on every published job description. These laws apply to California employees; Colorado; Hawaii; Illinois; Minnesota; New York (with specific laws in New York City, Ithaca and Westchester County), Jersey City, New Jersey; Vermont; Washington and Washington, DC

Other laws stipulate that a job seeker is entitled to the pay range at certain points in the hiring process, such as during an initial job interview or when receiving an offer. In some cases, candidates may request this information, while in others the hiring manager must proactively provide it. These types of laws are enforced in Connecticut; Maryland; Nevada; Cincinnati and Toledo, Ohio; and Rhode Island.

Other states, including Maine, Massachusetts, Michigan, New Jersey and Pennsylvania, have their own pay transparency proposals on the table, which could start before the end of the year.

“The year 2022 was known as the year of pay transparency, but 2024 is giving it a run for its money as we see more action on the legislative front,” Seikaly tells CNBC Make It.

Lawmakers have even introduced a federal pay transparency bill, though it is currently pending in the House of Representatives.

“It is important to note that the House of Representatives is currently controlled by Republicans, so personally I am not very optimistic that the bill will be passed before the end of this year,” Seikaly said. “However, this sentiment will change if Democrats control the U.S. House of Representatives, the U.S. Senate and the White House, as this presents a strong opportunity for a national pay transparency law.”

Wage ranges in job postings can close the pay gap and boost hiring

Supporters of pay transparency laws say such efforts can close wage gaps between races and genders, especially when salary ranges are required in job descriptions.

For example, the gender wage gap among workers in federal jobs, which lists wages publicly was about 6% in 2022, compared to 16% nationally.

And in Colorado, the first state to pass a pay transparency law in 2019, published salaries increased by about 3.6% after the law went into effect, which could indicate that greater transparency gave workers more power to decide their pay. negotiate.

Employees of all generations support transparent pay policies and want to work for companies that embrace this. A majority, 58% of workers, say they prefer job openings with a salary range for the position, according to a September 2023 survey of 4,402 adults by the National Women’s Law Center (NWLC) and Morning Consult. A similar share, 60%, say they support implementing pay range transparency practices in their workplace.

And roughly 1 in 3 workers say they applied for a job they otherwise wouldn’t have been interested in because they saw the salary range next to it.

Pay range laws impact workers outside the states that hire them

Recent legislation has pushed employers to disclose their pay ranges even if they are not located in a state or municipality where a law exists, according to research by the NWLC and Glassdoor.

Transparent compensation policies are gaining momentum especially among companies that operate in multiple states, says Joy Rosenquist, a shareholder at Littler, an employment law firm. A company based in New York City with offices across the U.S. is likely to have sweeping pay transparency policies, even if some offices don’t have to, she says.

It can also be a “valuable retention and recruitment tool” for companies. “The employer who discloses more information than necessary is one who gains more trust from a candidate pool and from its employees,” Rosenquist says.

That trust can be good for business. According to a recent report from Payscale, the top performing companies that exceeded their 2023 revenue targets are likely to have transparent pay policies.

And the efforts go beyond posting salary ranges on open positions: more than half of top-performing companies say they provide their employees with “always accessible pay communications that explain the ‘why’ behind their pay,” compared to 35% of non-top performers. , according to Payscale.

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