Pay Transparency in the US: What International Recruiters Should Know
As an international recruiter who’s sourcing talent in the US, you may have heard about pay transparency laws. That’s because it’s been a hot topic of discussion for a while, and more US states and cities are getting on board with these regulations. Similar rules are being proposed globally as well, but for the sake of this post, we’ll stick to a high-level overview of pay transparency in the US.
What is pay transparency?
Pay transparency refers to the practice of making information about worker compensation, including salaries, wages, and benefits, available to others internally, externally, or both. This can look like publishing salary ranges on new job postings, disclosing individual salaries to colleagues, or making the pay structure in a company accessible and easier to understand.
The aim is to promote fairness and equality within an organization and in society. It can help to reduce biases in the workplace and address issues such as pay discrimination and the gender pay gap. Some companies have implemented pay transparency as part of their diversity and inclusion initiatives.
Although there are good intentions behind these regulations, some may argue that there are also potential downsides, such as conflict among employees and lower wages overall.
Pay transparency laws in the US
The most important thing to know when hiring or sourcing talent in the US is that employment laws vary state-to-state, and in some cases by municipality.
More widespread than ever before, pay transparency laws are being discussed and implemented in certain states and cities throughout the US, such as California, Colorado, Maryland, and New York City (this is not an exhaustive list). These regulations are not uniform across all locations. It’s important to know the details of the laws in the specific areas you’re operating in within the US, especially regarding remote workers, so you can ensure complete compliance. It’s to be expected that more US states will be implementing pay transparency laws soon to promote equity in the workplace.
How can recruiters benefit from pay transparency?
Just by including a salary range in a job posting, you’re automatically appealing to the majority of the workforce. According to a poll by Monster, “nearly all workers (98%) believe companies should put salary ranges in job postings, and more than half (53%) would decide not to apply for a job that doesn’t.” That means you could be missing out on 53% of candidates simply by not including a salary range on a job posting.
Pay transparency can also help with improving the employer’s brand and building trust within an organization. According to SHRM research, “91% of employees who believe their organization is transparent about how pay decisions are made also said they trust that their organization pays people equally for equal work regardless of gender, race and ethnicity.” As candidates increasingly value employer reputation during their job search, being transparent about pay from day one will allow a recruiter to present an open and honest employer brand that will appeal to candidates.
Being transparent about pay may also improve recruiter productivity, as it allows candidates to make an informed decision before applying to a position. Not only does this help screen candidates early on and focus on the ideal talent pool, but it can also improve candidate experience.
3 key takeaways for recruiters
- Pay transparency laws are becoming more widespread throughout the US
- The details of these laws vary depending on where you’re operating within the US
- Recruiters can directly benefit from pay transparency by appealing to more candidates, building employer brand, and increasing productivity
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Disclaimer: This post is provided for informational purposes and should not be considered legal advice, the final word on this topic or a political opinion.