New Pay Transparency Laws Could Help You Get a Raise
Companies are now posting salary ranges in job listings to comply with a new pay transparency law in New York City, which mirrors legislation that's been passed in some other states and cities.
Even if you’re not in the job market — and even if you’re thousands of miles from New York — the data could help you out in salary negotiations.
After the New York law went into effect Tuesday, employers began updating their listings to include “good faith” minimum and maximum salaries for the job openings they are advertising.
For example, people can now see that Macy’s is hiring for a retail support associate position in New York City at $15 to $26.83 per hour, and JP Morgan is hiring for an analyst role with a base salary of $65,600 to $82,000.
How to use pay transparency to get a raise
Pay transparency laws are intended to help prospective employees get a fair salary when they’re choosing a new job, according to Daniel Zhao, lead economist at Glassdoor, a website where employees anonymously review companies.
“Pay transparency helps level the playing field between employers and job seekers in a context where employers have historically held all the cards,” Zhao says. “By shining a light in dark corners, pay transparency can help make sure workers know how much to expect and when they’re being undervalued.”
People who already have jobs can also benefit from the new pay transparency law, according to Lisa Simon, senior economist at workforce intelligence company Revelio Labs.
She says many employees who spend a long time in one job could become underpaid over time because employers typically do not raise salaries enough to keep up with overall wage growth in the market. With this new law, experienced employees can look up salary data on job listings. If they find that new hires are being paid more, they can use that information to ask for more money.
High inflation and competition in the labor market have contributed to significant wage growth recently, making it especially important for workers to negotiate salary increases or risk being paid less than they're worth.
Even if your employer isn’t subject to salary transparency laws, you’ll now be able to use the figures in competitor companies' job listings to get a sense of the salary ranges for your line of work, Simon says. People can use that information as a reference point to negotiate their own salary.
The big catch is that New York City wages are often higher than wages in many other parts of the country due to the extraordinarily high cost of living.
How does the new pay transparency law work?
New York City's pay transparency law applies to companies with at least four employees. It affects job listings in the city, but it also applies to jobs that could be performed in New York City, which includes remote roles, if an employer has at least one employee already working in the Big Apple.
“This affects a lot of companies that are primarily based outside of New York City,” says Dave Carhart, vice president of the people strategy group at Lattice, a workforce people management platform.
In the coming months, even more U.S. employers will be required to post salary info on job listings. The first major pay transparency law went info effect last year in Colorado, and lawmakers have approved similar legislation that will soon take effect in California and Washington. Legislators in the state of New York have also passed a salary transparency law, which Gov. Kathy Hochul is reviewing.
In a recent report, Lattice found that there’s an appetite from U.S. workers for more pay transparency. Of 2,000 employees surveyed, 67% said employers should be more transparent about pay.
“We've seen this as a trend among what employees expect from companies, what candidates are expecting and certainly increasingly, what the law is expecting,” Carhart says.
New York City council member Justin Brannan, who was a sponsor of the law, said in an interview with WNYC Tuesday that the salary transparency law aims to close wage gaps by gender and race.
“It's been widely documented that women and people of color are significantly less successful in salary negotiations,” he said. “You need the tools to go in and negotiate for yourself, and we hope that that's what's going to happen here with this law.”
Salary transparency laws have been opposed by some business groups that argue the requirements go too far. Loren Furman, president & CEO of the Colorado Chamber of Commerce, contends that it was already a tough hiring market for employers.
“This is a competitive employment environment, and I think employees have an advantage already now based on that environment,” she says.
She says some employers in Colorado have dealt with the law by posting very large salary ranges, like $100,000 to $180,000, to give themselves lots of flexibility. In New York, some employers are already doing the same thing.
However, Simon says she thinks these cases will be outliers, not the norm. In Colorado, after the pay transparency law took effect, Revelio’s analysis of job listings found an average difference between the min and max salary of 33% (for example, a $60,000 to $80,000 range), which she says is surprisingly reasonable. “Contrary to common beliefs, there's actually quite a lot of information in these ranges."