In a world of new and ever-changing pay transparency laws, it is important for as an employer to stay compliant and prepared for what is to come. Staying up-to-date on these laws and best practices for implementation is imperative, and ensures compliance and mitigates risks for any potential discrimination.
States that currently require employers to post salary ranges on open positions include: California, Colorado, Hawaii, Illinois, Minnesota, New Jersey, New York, Vermont, Washington state, Washington D.C., and soon-to-be Massachusetts, with many others likely to follow. Additionally, any remote or hybrid positions that are able to be performed out of those states must also include the salary range in the job posting. Importantly, states including Connecticut, Maryland, Nevada, and Rhode Island are required to disclose ranges at given intervals during the interview, offer, or promotion process. However, these states are not required to post the salary ranges in the job ad.
What Should Employers do to Ensure Pay Equity?
Implementing a compensation strategy and aligning the scope of the role with current market rates is more important than ever. Taking pause to evaluate what is to come and strategize how to prepare can be hugely beneficial for both external and internal reasons. Externally, this grants an employer the competitive advantage in the market to attract and retain talent.
It guarantees that they are meeting candidate expectations for the caliber of candidate that they seek. Internally, this creates clarity for performance alignment and advancement opportunities for existing employees.
Depending on key factors such as company size and how recent company pay grades were updated, this may be an appropriate time to use a salary benchmarking tool. Utilizing a third-party compensation resource can be a quick way to complete a market analysis to ensure your company is aligning where it should in comparison to the market for similar roles. Using an old salary range because it is what is “fair” in the opinion of the hiring team or what they always used before, is only doing a disservice to the company culture and its potential incoming talent.
Prepare for Internal Reactions
Internal pay equity keeps morale intact and retains talent, so it is key to stay on top of any large gaps, which may need addressed prior to posting another role. It is also important to be proactive and transparent in communication when alerting the team that a position will be posted with the range. This is a time for managers to prepare for potential difficult conversations and heightened emotions from employees. Offer one-on-one sessions to review individual concerns and reinforce the skills and experience required for the range provided. Be consistent and clear in the message delivery.
What If Employers Don’t Have to Post the Salary Range?
While hiring managers are not permitted to ask questions regarding what a candidate is currently earning in a role, it is encouraged for them to be transparent on what their opening is budgeted and expected to pay, and to do so early in the hiring process. Whether or not it is a state requirement for the role, this can benefit both parties and avoid unnecessary time and effort if there is no chance of fiscal alignment. From a candidate perspective that may be taking time away from their current role or entertaining other offers, it is much appreciated to provide that upfront clarity.
Whether you are a large employer looking for a total revamp of your compensation philosophy, talent acquisition strategy, or a small team looking for guidance and support to build out a defined pay structure, we can help you get it done! Contact megan@wearecompass.com to learn more.
