- Connecticut proposes to expand existing law. The existing pay transparency law in the state requires employers to disclose salary ranges to applicants and employees for their position. The update would follow the precedent of more recent laws that require salary ranges to be included in all job postings.
- Prepare for increased compensation questions. Compensation and legal experts note employers should anticipate more employee and candidate questions around their compensation philosophy.
- Utilize as a talent attraction and retention strategy. Increased pay transparency builds accountability and trust that contributes to improved retention and a stronger company culture.
The concept of pay transparency may not be the nationwide status quo quite yet. But the trend continues to become a consideration for employers looking to sharpen or maintain their competitive talent attraction and retention edge in jurisdictions that have or are considering enacting transparency laws.
Connecticut, for example, recently proposed legislation (Proposed H.B. No. 5243) that would “require employers to disclose salary ranges in all job postings.” In 2021, Connecticut was one of the first states to enact a pay transparency law requiring employers to disclose to applicants and employees the salary ranges for their positions.
Kelly Cardin, a shareholder in Ogletree Deakins’ New York and Stamford, Connecticut, offices, explains that pay transparency laws seek to promote pay equity by requiring employers to inform candidates what employers are willing to pay for a position.
“It seems likely that these laws are the wave of the future as a number of jurisdictions continue to propose and pass pay transparency legislation,” she said.
As noted, the proposed Connecticut legislation would expand the existing law and follow several state and local jurisdictions — including California, Colorado, New York State, and Washington, as well as Jersey City, New Jersey, and Ithaca, New York City, Albany County, and Westchester County in New York State — that already require employers to disclose wage ranges in job postings.
“The various jurisdictions have resulted in a patchwork of legislation across the county, which can make compliance challenging for multi-state employers,” Cardin said. “The pay transparency trend might also be fueled by some third-party job posting websites that have started to assign their ‘best guess’ at a salary range for some positions, if the employer does not provide one in a job posting.”
Christine Hendrickson, vice president of strategic initiatives at Syndio, a New York City-based firm that provides technology and expertise to help companies improve their workplace equity, says that if nothing else, the roster of proposed pay transparency laws on the docket this year — in both the U.S. and European Union — is evidence that “we're not only in the pay transparency era, but it's here to stay.”
She adds that employers should anticipate more employee and candidate questions around their compensation philosophy.
“Companies need to focus on ‘pay explainability,’ which means being able to clearly articulate how they determine pay, how they apply it to individual employees and whether that pay is equitable and consistent,” Hendrickson said. Otherwise, she notes, employees and candidates will challenge employers with their own research.
“There's so much information available now, or talent may go to another company entirely, one that provides more clarity around rewards,” she said.
Hendrickson says that in today’s emerging pay transparency era, those who prepare for pay transparency with pay explainability will earn a competitive advantage.
“They’re building accountability and trust that contributes to improved retention and a stronger company culture,” she said.
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