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Pay Transparency Laws Are Helping Some Applicants, But Their Effectiveness Is Limited

S.J. Steinhardt
Published Date:
Jun 20, 2023

Pay transparency laws are having some effects, but not always those intended, The New York Times reported.

Such laws are in effect in California, Washington, and Colorado, as well as cities such as New York. More than one-fourth of the U.S. labor force is now covered by salary transparency legislation, according to an estimate by the National Women’s Law Center. At job site Indeed, about 45 percent of all advertisements for work in the United States now display a pay range disclosure, up from less than 20 percent before the pandemic.

Baruch College graduate Yun Yati Naing said that New York City’s law “really made a difference going into the workforce as a fresh graduate. We had no idea what the wages of these entry-level jobs were.”

She was able to narrow her opportunities by salary and found a job in finance that met her expectations. She began her new job after graduating in June.

Such laws can also reveal discrepancies. Kimberly Nguyen, a 25-year-old UX writer for Citibank, found a LinkedIn listing for her own job. She had been hired by a consulting agency as a contractor, making $85,000, having been told during the interview process that contract work was the only way to get a full-time job in this position at Citibank. The full-time job she saw advertised paid between $117,200 $175,800.

Not getting an adequate explanation from her supervisors, she took her complaints public, starting a Twitter thread. She wrote, “My company just listed on LinkedIn a job posting for what I’m currently doing (so we’re hiring another UX writer) and now thanks to salary transparency laws, I see that they intend to pay this person $32k-$90k more than they currently pay me, so I applied.” She has since discovered that she was not being considered for the full-time role.

“Obviously the point of the law is for people to be able to advocate for themselves,” she told the Times. “But no one’s required to do anything as a result.”  

Companies have also complied with the law to the letter, but not its spirit, by advertising jobs with “stretched-out salary bands” whose ranges could apply to anyone in the company. Such listings have already appeared in New York, where the law does not cover bonuses, meaning that businesses that pay their employees in commission are not in violation.

“In general, occupations that are more likely to be remote and have higher pay seem to be having widening ranges, whereas those that are more likely to be lower-paid positions and are more likely to be in person are starting to see more narrowing in the last year,” said Cory Stahle, the author of an Indeed Hiring Lab report.

While states and cities are beginning to enforce their pay transparency laws, companies may have no choice if they want to attract applicants. In a December survey of more than 1,000 postsecondary students and recent graduates conducted by Adobe, 85 percent said they would be less likely to apply for a job if the company did not disclose the salary range in the job posting, according to the Times.