Have you ever played with dominoes? I’m talking about taking the time to build a “track” of dominoes in a pattern on the floor or on a table (or even something more elaborate than that), and then hit one and watch them all fall.
Sometimes, when you have your eye on the entire nation looking at employment laws and the states, cities, and counties enacting them, it can be like watching dominoes fall, one by one. While it’s fun with dominoes, it may not be with employment compliance. Such is the case with the newest employment compliance trend: pay transparency laws. States and local entities are falling like dominoes as they begin to implement these laws and add yet another layer of management to employers across the nation.
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While the new laws are certainly unique, they are just the next step in a long line of laws aimed at reducing wage disparities that affect women and other marginalized groups. The original in this group of laws is the Equal Pay Act of 1963. Since then, there have been stricter, tougher laws enacted that affect employers in a variety of ways. The laws have effectively evolved from requiring employers to pay people equally for the same or similar work to being completely transparent, right from the start, as to what the pay will be for a given position.
Details about the new laws
As such, these new laws require employers to publicly advertise, post, and share the pay range of the positions for which they are hiring. An example of a pay range for a hygienist ad or posting might be: $35 per hour to $45 per hour.
The laws vary on when this information is required to be provided, but the newest of these laws require it on all job ads and postings. The postings must include this information for every position that will be hired within the jurisdiction in which the law is applicable. No position is exempt from this requirement.
The laws vary on the type and kind of information required to be publicly advertised, posted, and shared. In most cases, pay range information includes other forms of compensation that matter to the position as well—bonuses, commissions, health benefits, paid time off benefits, stock options, retirement plans, and more. Basically, employers must lay out their cards for all to see.
As with any employment law, there are record-keeping requirements as well as penalties for noncompliance—not to mention increased liability risk due to current and potential employees being able to file lawsuits against employers for their pay practices.
States with transparency laws
The states with transparency laws either in effect or soon to be (as of the writing of this article) are California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington. These cities and counties are also affected: Jersey City, New Jersey; Cincinnati and Toledo, Ohio; and Ithaca, New York City, and Westchester County, New York.
The question is: what state, city, or county will be next?
Do these laws work at fighting wage disparities?
There is debate about it, and we’ll have to wait and see over time whose side ultimately wins. According to the New York Times,1 Zoe Cullen, an economist at Harvard Business School, said, “It is totally 100 percent true across all the studies I’ve seen, with very few exceptions.” She goes on to add, “Pay transparency laws are ‘very good’ at reducing wage disparities.”
The article highlights one potential positive for employers. After being required to comply with the new law, Ron Harman King, an employer in Colorado, found candidates responding to his ads to be a much better fit. “The interviews have been easier. They knew what the position would pay, and they were already interested in applying for it at that range,” he said.
Like the laws before pay transparency, people will likely see the newest approach as both good and bad, and the results will be a mix of positive and negative. No doubt, pay disparity remains a complex problem to solve, but that doesn’t mean we should stop our efforts to do so. A huge portion of our society stands to gain if we do. Like knocking the first domino over, perhaps reducing or solving pay disparity will begin knocking down other barriers, one by one, giving as many people as possible the ability to thrive in our society.
Editor's note: This article appeared in the May 2023 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.
Reference
- Kessler S. Who benefits when salary info is public? The New York Times. January 14, 2023. Updated January 16, 2023. Accessed February 13, 2023. https://www.nytimes.com/2023/01/14/business/pay-transparency-public-salary-information.html
