New York City’s Pay Transparency Law Could Have A Ripple Effect On The US

This May, it will be illegal for most employers in New York City to leave out pay ranges from their job postings or promotional opportunities. 

Calls for better pay transparency have grown tenfold in the last few years as employees demand a better workplace experience, starting from the application process. By receiving more clarity on pay, New York City workers can have a better idea of how to negotiate pay and whether offered salaries are truly fair. 

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Beyond pure transparency, labor lawyers also believe that this law could help address other pay discrepancies in the workplace, such as the gender pay gap. 

“[Research] has shown that giving employers free range to set salary in this way is precisely what leads to discriminatory pay,” said Seher Khawaja, a senior attorney at the Women’s Legal Defense and Education Fund.  

New York’s law will go into effect on May 15 and follows a similar blueprint of a rule Colorado enacted last year, which would require any public job postings to include targeted pay. This particular rule has led many companies to exclude Colorado applicants when sharing open job positions, rather than offer more transparency. 

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“What we’re seeing is some organizations start to realize that taking a state-by-state approach isn’t really a scalable solution,” said Tauseef Rahman, a partner at human resources consulting firm Mercer. “Instead of providing this information just for New York or Colorado, [they’re thinking] how can we start to think about doing this nationally?”  

In short, pay transparency would help companies address pay inequity and improve the overall recruitment process that has been overdue for refurbishment. 

Abiding by such laws also helps employers who are struggling to attract and retain top talent amidst the ongoing labor shortage.  

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