Will pay transparency laws fix pay equity issues?
A key objective of pay transparency laws is to reduce the gender wage gap.
So… are you doing anything about it yet?
Salary history bans, pay range disclosures, and wage reporting don’t directly improve pay equity.
These new laws are powerful because they codify pay transparency into the zeitgeist.
Every employee, candidate, manager, and executive feels the change, and permission to take a step further
Ask the recruiter the question you really wanted to
Raise the concern to your manager
Greenlight the program improvements sitting on your shelf that your comp leaders proposed years ago 😀
I’m not saying we’re entering a pay equity nirvana; just that the needle has moved, if only a little. There will still be bad actors and pay inequities, but they’ll be easier to find.
Don’t get too excited
If you’ve been reading my newsletter for awhile now, you know I like to turn to executive compensation for lessons on what we can expect from new pay legislation.
Pay transparency is actually nothing new in the world of exec comp.
Companies had to up their disclosure game nearly 20 years ago with the addition of the Compensation Discussion & Analysis to the proxy statement, and subsequent rules like the CEO pay ratio.
Have these laws had an effect on executive pay?
Actually, exec comp has grown much faster than median worker pay in the last two decades. In fact, it’s unclear whether the laws alleviated or exacerbated runaway executive pay.
Sunlight is the best disinfectant
At a minimum, the proliferation of data is going to help us understand what’s really going on. It’s getting harder for pay equity issues to hide.
And hey — while you’re at it, don’t forget about benefits. Disclosing details to candidates is not legally required, but it makes a big difference for a lot of people.
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