Whether you get paid fairly for the work you do is a mystery surrounded by a lack of information. That may change, however, and pay transparency may be the catalyst. There is a growing tendency for companies to reveal what a job posting or current position pays, either voluntarily or because governments require it.
NAVIGATING SALARY SCALES
So far, a dozen states and municipalities have mandated access to salary information, including California, Colorado, Washington, and New York. Businesses in jurisdictions are generally required to post pay scales indicating the minimum and maximum wage. The rules vary: sometimes only job applicants need to be notified, while other times current employees can also request information about their pay scale.
Roberta Matuson, president of Matuson Consulting in Boston, consults with companies seeking top talent. She believes that pay transparency “is a step in the right direction”.
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“Knowledge is power. So, you know, if you have no idea that you can possibly make more money, then you wouldn’t even ask,” Matuson says.
IS THIS THE END OF SALARY NEGOTIATION?
Pay transparency won’t eliminate salary negotiation, says Lexi Clarke, vice president of people at Payscale, a national provider of compensation data and services. Instead, Clarke says it will encourage discussions about current and future salary expectations.
This will help employees and candidates “understand what their expectations should be, and where the limits are (salaries) and where there might be flexibility. This levels the playing field between employers and candidates to have a more open and transparent conversation,” she says.
And Lulu Seikaly, senior corporate lawyer at Payscale, notes that as the laws currently stand, employers are not prevented from offering a salary above a posted range for a position, as long as the company can provide a objective reasoning for the exception.
In the past, companies often based salary offers on what an individual earned in previous jobs, Seikaly says. “Many states have banned this now.”
If a potential employer asks you for your salary history, Matuson says, “I wouldn’t refuse to answer; I’d say, ‘Well, tell me what you offer for this position.’ I would just return the question.”
WILL PAY DIFFERENCES BE ELIMINATED?
Pay transparency reveals pay ranges, but does it reduce gender and ethnic pay gaps? It may be too early to tell.
However, Payscale’s Clarke says organizations that are more open about pay often have a well-defined pay structure and are less likely to have pay inequities.
She predicts how the gender pay gap could narrow: “Women’s wages will rise to where they should be – some overpaid men’s wages may drop slightly, to be more in line with what they should be.”
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