The rate of Americans with multiple jobs has been on the rise since 2010. 

Today, 16 million Americans – around 10% of the U.S. workforce – work at more than one job. Many employees in healthcare, food service, retail, and administrative positions work more than one job and still make less than $20,000 per year. Inflation, weak wages, and lack of pay transparency all contribute to the need for people to work multiple jobs. Many people in the U.S. workforce do not have the luxury to “shop around” for a better-paying position because the hiring process puts a serious financial strain on already dwindling savings. However, lack of pay transparency means that even those who are able to research new positions can be caught off guard when their new pay range is finally disclosed.

Pay transparency is gaining traction across the country because it provides many benefits to employees and employers. Proactively disclosing pay ranges allows prospective employees to make educated decisions on when and where to apply for their next position. Disclosure may also lead to an increase in pay equity, employee retention, and employee productivity. Pay transparency prevents companies from wasting resources on interviewing prospective employees who are unwilling to work for the offered salary. Additionally, pay transparency promotes a company’s reputation, which leads to stronger talent acquisition. 

Pay Transparency Laws in 2023

State or local pay transparency laws are currently in effect in ten states: California, Connecticut,  Maryland, Nevada, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Washington. Pay range disclosure requirements vary, but each law prohibits complete pay secrecy. Colorado has one of the strictest laws, which requires all employers to provide pay ranges and descriptions of benefits to all prospective employees. Rhode Island’s disclosure requirement is much more lenient, requiring employers to disclose pay ranges only upon the request of current or prospective employees. Some state laws only apply to companies with a certain number of employees or a certain number of employees in the state. For example, in Washington, California, and Ohio, disclosure is only required by companies with more than 15 employees.

Pay transparency laws are quickly becoming more popular. Hawaii, Illinois, Kentucky, Massachusetts, Montana, Oregon, South Dakota, Vermont, Virginia, and West Virginia have introduced legislation to increase pay transparency. The European Union also recently passed a directive on pay transparency.

Employers posting remote job opportunities are required to comply with the pay transparency laws of all states where potential employees reside. If a company posts a job opening online, the company should assume that the strictest disclosure requirements apply. This means that, for most remote opportunities, companies must disclose pay ranges to all prospective employees. The penalties for violating these laws can be severe. Companies may face hefty fines of up to $250,000 for non-compliance.

Consider Voluntary Disclosure

Many employers who are unaffected by pay transparency laws are beginning to disclose pay ranges. Even when it is not required, there are several benefits to voluntary disclosure. First, as more states enact similar laws, it is increasingly likely that compliance will eventually be required. Companies have the opportunity to fully audit their wage policies and eliminate inequity before the requirement kicks in. Second, companies can avoid potential fines by getting ahead of pending legislation. Finally, by proactively disclosing pay ranges, companies show prospective employees that they are committed to transparency. As mentioned above, this can lead to greater talent acquisition, pay equity, and higher rates of employee productivity and retention. 

After the Interview… Employee Discussions on Wages

Pay transparency does not (and should not) end after the hiring process. Regardless of whether or not an employee is aware of their pay range before joining the company, Section 7 of the NLRA gives employees the right to communicate with their fellow employees about their wages. A recent decision by the NLRB confirmed that an agreement between an employer and an employee “is unlawful if its terms have a reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights.” Employees can easily discover inequities and pay gaps by communicating with each other about their wages. By providing pay transparency throughout the hiring process, companies can avoid employee dissatisfaction and resentment. 

How do Pay Transparency Laws Affect Your Business?

Do you own a business? You can retain top talent and avoid potential fines by embracing pay transparency. Proactively complying, even if your state doesn’t yet have a law in place, will benefit your business and make future compliance a non-issue. You should consider creating and maintaining a wage policy to clearly communicate pay ranges to prospective and current employees. Your wage policy should provide the answers to the following questions:

• How are pay ranges determined?
• Is there a difference in wage ranges for in-person and remote work?
• Is there a difference in wage ranges geographically?
• How are bonuses, raises, and promotions determined?

If you are unsure of where your business stands regarding pay equity, you can hire an outside consultant to conduct a pay equity audit. An audit of your current pay ranges will uncover any pay gaps and help you to better provide pay equity to your employees.

It is also important to remember that you must comply with all pay transparency laws if you are posting a job opportunity online for a remote position. This means that your posting must contain a pay range for the position. If you are unsure of how to comply with the current pay transparency laws, reach out to an attorney. It’s better to be confident in your understanding of the law before you publish a potentially non-compliant job posting online.

Complete pay secrecy is quickly becoming extinct. Now is the time to adapt your business and embrace pay transparency!

 

Sources:

https://www.census.gov/library/stories/2021/02/new-way-to-measure-how-many-americans-work-more-than-one-job.html

https://www.insidehook.com/daily_brief/health-and-fitness/americans-have-more-than-one-job

https://www.adp.com/spark/articles/2023/03/pay-transparency-what-it-is-and-laws-by-state.aspx#:~:text=Pay%20range%20disclosure%20laws,candidates%20and%2For%20current%20employees.

https://www.beamjobs.com/career-blog/pay-transparency-by-state

https://www.americanprogress.org/article/quick-facts-about-state-salary-range-transparency-laws/

https://news.bloomberglaw.com/us-law-week/pay-attention-to-state-pay-transparency-laws-when-posting-jobs

https://nwlc.org/resource/salary-range-transparency-reduces-gender-wage-gaps/

https://www.nlrb.gov/about-nlrb/rights-we-protect/your-rights/your-rights-to-discuss-wages#:~:text=Under%20the%20National%20Labor%20Relations,for%20mutual%20aid%20or%20protection.

https://www.nlrb.gov/about–nlrb/rights-we-protect/the-law/interfering-with-employee-rights-section-7-8a1

https://hbr.org/2023/02/research-the-complicated-effects-of-pay-transparency#:~:text=Our%20Nature%20Human%20Behavior%20study,equal%2C%20and%20less%20performance%20based.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7739

https://www.skadden.com/-/media/files/publications/2019/09/conducting_a_pay_equity_audit.pdf

https://www.mapchart.net/usa.html