What Employers Can Do To Prepare For Pay Transparency Laws

A growing number of states and municipalities have already enacted pay-transparency laws. As discussed in our recent articles, such laws largely require an employer to include the salary range for the role in a job posting. These laws, in turn, help candidates understand what the associated pay range is for the role so as to promote more transparency. They also allow a candidate to decide whether the role is the right monetary fit before the candidate and employer spend a lengthy amount of time in the interview process. These laws further help candidates better negotiate for themselves by knowing the permitted salary range for a role. Pay-transparency laws have quickly received support from the workforce and have began to expand in more and more states. So, with this increase in support for pay transparency, what can employers do to prepare?

The first item that employers can do to prepare for the potential adoption of pay-transparency laws is to become proactive. Employees by and large support these measures. So, if you are looking to stay competitive with the workforce and talent pool, it is critical to be proactive and begin taking steps to increase pay transparency within your company—even if not mandated by law yet.

In becoming proactive, employers should take a careful look at the culture of the organization to understand the best way to adopt some sort of increase in pay transparency. Will your culture support simply including pay ranges in job postings? Or does the culture support further measures such as revealing the pay ranges associated with particular roles internally? What about externally? Human resources departments should take a careful eye to the culture and assess what measure or measures make the most sense for the organization so as to not only prepare for pay-transparency laws, but to also stay competitive in attracting and retaining the best talent.

Internal pay-transparency audits are also important to see and assess where potential gaps or inequities exist. Organizations can do this independently or can engage outside third parties to conduct such audits on their behalf. There also are a growing number of software programs geared exclusively towards pay transparency that can be of use.

Organizations can also start communicating and educating their employees about the benefits of increased pay transparency as well as communicating appropriately their action plan to increase pay transparency internally. This will help lead to more open communication and increased organizational trust, which will in the end not only benefit employees, but also the organization as a whole.

In short, the one thing that employers cannot do is nothing. Pay transparency is coming whether mandated by law or by a rallying cry from the workforce. Organizations that want to stay ahead and stay competitive have a variety of steps they can and should do to prepare for this change.