- An ongoing trend. Wisconsin is the most recent state that is exploring and potentially joining the growing trend of adding pay transparency to its employment laws.
- What the law includes. Under the proposed bill, much as is the case in other states, when posting job vacancies or that employment opportunities exist, employers must include salary or hourly wages, or a salary range.
- Action items. Employers can get a head start in evaluating their organization’s compensation from a pay equity lens and take remedial steps, prior to making public disclosures of salary ranges.
Wisconsin is the latest state to consider a pay transparency law, joining an ongoing trend nationwide.
State Rep. Jimmy Anderson, a Democrat, is circulating legislation requiring employers to include information on pay and benefits in job listings. Under Anderson’s bill, when posting job vacancies or employment opportunities exist, employers would need to include salary or hourly wages, or a salary range.
Employers would also need to keep records of job listings and associated wages, salary and benefits for at least two years after the position is filled. If it becomes law, Anderson’s proposal stipulates that violations would result in a fine of at least $500 and no more than $10,000 per violation.
A Growing Practice
It may be too early to determine how likely the proposal is to come to fruition, according to Ruth Thomas, chief product evangelist and pay equity strategist at Payscale.
Thomas, who has not seen the actual bill, said passage will likely depend on “how moderate” it is.
“A change in the state legislature in 2024 may make this more likely,” she said. (The current Wisconsin state legislature is Republican controlled.)
Serra Aladag, director of regulatory affairs at Trusaic, said given the increase in demand for pay transparency laws in other states and municipalities, there is a “good chance” that Wisconsin will join the ongoing movement to help cultivate a competitive and equitable labor market.
“Pay transparency laws seek to help job applicants and employees gain insight into salaries/salary ranges during recruitment and employment,” she said, “And we’re seeing a shift toward more employers including this information, even among those not yet legally required to do so.”
2023 has been an especially active year for pay transparency legislation, as laws have been passed in California, Washington, Rhode Island, Hawaii and Illinois.
“Employers have responded proactively focusing on improving their pay policies and structures to ensure when they are transparent their pay rates are competitive and consistent, and do not impact internal employees,” Thomas said.
She added that many employers have enacted pay transparency policies without legislative mandate to ensure a consistent employee experience nationally.
Jurisdictions will vary in the requirements surrounding disclosure of salary information for job openings, such as the timing of disclosure (i.e., within the job posting, upon request, and or upon applicant’s submission of application). Other potential requirements/specific information within job postings include base compensation only or other additional things like benefits, bonuses and equity.
“In effect, pay transparency laws are meant to serve as additional tools to reduce pay disparities,” she said.
Currently, there are eight states that have active pay transparency laws that require employers of a certain size to disclose salary information within job postings. Two additional states have passed legislation but have future effective dates: Hawaii’s will become effective Jan. 1, 2024, and Illinois’ Jan. 1, 2025.
“Many other states are considering passing pay transparency legislation,” Aladag said. “Massachusetts is poised to be the next one.”
Action Items for Employers
Aladag said Wisconsin employers should be proactive in case the legislation becomes law.
By preparing in advance, she said, employers can get a head start in evaluating their organization’s compensation from a pay equity lens and take remedial steps, as applicable, prior to making public disclosures of salary ranges.
“It also is prudent for employers to take advantage of solutions that can provide pay equity analysis on the existing workforce, as well as to help assist employers make equitable compensation offers moving forward with new hires,” Aladag said.
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