What Is Missing From Pay-Transparency Laws

A growing number of states and municipalities have enacted or at least are considering enacting pay-transparency laws. Although helpful, some important compensation information is still missing from these laws. We’ve written previously about how pay-transparency laws are helpful to job-seekers or individuals who currently are applying for or are in a similar role as the role that is being advertised in a job posting because they offer transparency into what a given role pays either for the candidate or as a comparison point for someone in a similar role. We’ve also written about how these laws—again, while helpful—do not address the lack of transparency if there is no similar role to the employee’s current role being posted. But these laws are also largely missing one key component: bonus information as a part of the larger compensation picture.

Not all roles offer a bonus. But many do. And where a bonus is given, that information can impact the role’s larger compensation picture significantly. In our research, we have seen bonuses exceed the amount given as a salary, thereby more than doubling the total compensation package. Now, certainly excessive bonuses are not the norm, but where a bonus is given, it can and does impact the total compensation package beyond a listed salary. While pay-transparency laws are certainly helpful and a step in the right direction, clearer transparency involves not only salary, but the total compensation package, including bonus structure and payments.