Welcome back to our monthly roundup of updates surrounding pay range transparency. In the pursuit of fair hiring practices and promoting salary range transparency, organizations and governments worldwide have taken significant steps during the month of May. Join us as we explore the key highlights and trends from around the globe.
Legislative advances underway
While a nationwide pay transparency bill for the United States is still in its early days, changes are happening on the ground – and very quickly.
Hawaii and Illinois both passed their pay transparency bills this May, soon joining a fast-growing list of states and localities to mandate salary disclosure in job listings once enacted. Hawaii looks to enhance the state’s equal pay protections, prohibiting employers from discriminating between employees based on “any protected category” with unequal pay for “substantially similar work”. Illinois, on the other hand, considers penalties for violations of the new requirements, bolstering its commitment to pay equity.
Massachusetts is poised to be next in line as advocates urged lawmakers to close the wage gap with similar salary transparency laws. This move aims to promote transparency and empower employees to make informed decisions about their careers.
Across the border, British Columbia’s Pay Transparency Act received Royal Assent in the same month. Effective from November 01, 2023, employers are obligated to provide salary information in publicly advertised job opportunities, and prohibited from asking job applicants for their pay history. Non-retaliation provisions and pay transparency reports are also included in the requirements on employers “to address systemic discrimination in the workplace”.
Leading organizations pave the way
With legislative progress in mind, organizations are starting to lead by example, encouraging others to follow suit and prioritize salary transparency.
As the largest employer in the US, the federal government is proposing a ban on salary history questions during the hiring process. Under the regulations, agencies may not consider an applicant’s salary history when setting pay, ensuring a fair evaluation based on skills and merit. This is a move towards pay equity and narrowing the wage gap between genders or workers of color, “positioning the federal government as a model employer advancing diversity, equity, inclusion, and accessibility within the federal workforce.”
Leading the charge in the corporate world, Airbnb joins the likes of Microsoft and Google to make a strong commitment to pay transparency in their global workforce. Before local employment laws kick in to push them to react, these companies are proactively making the transition to “provide transparency around compensation” for all of their employees. By ensuring that employees understand how their compensation is determined, it emphasizes the importance of fostering a culture of openness and fairness.
Global trends add to momentum
The accelerating adoption of pay range transparency is not solely due to legislative push, evident with its expansion even in places where no laws exist yet. Just like Airbnb, employers see the value of being consistent and transparent, “a smart (and prudent) employment-branding and trust-building move”.
Interestingly, fears around transparency on workforce disruption, turnover and lower application rates have not materialized. On the contrary, SHRM reported positive outcomes with higher application rates and better quality candidates when pay ranges were included on job postings.
It’s also important to take into account the emerging generation of workers and their job search priorities to attract them better. In a study by employability software Symplicity, Gen Z is driving the demand for more transparency in the job application process, particularly around the salary component. Without a specific salary range in the job ad, more than half of them would be discouraged from applying to that job.
This opens a window of opportunity for companies who recognize the importance of attracting the best talent by being upfront about salary details. It not only enhances transparency but also creates a competitive edge, as job seekers increasingly prioritize organizations that are open and honest about compensation. This is also why employers in India are adopting this as their latest talent attraction strategy even without the presence of specific legislation.
May has seen significant developments in the realm of pay transparency worldwide. From legislative progress to the leadership shown by organizations, the push for fair hiring practices and salary range transparency continues to gain momentum. By prioritizing transparency and equity, companies can create an environment that fosters trust, attracts top talent, and promotes a more inclusive workforce. Stay tuned for our next monthly update on the latest developments in fair hiring and salary range transparency.