Here’s how changing pay transparency laws will change the way jobs are listed
More than half of job seekers say pay transparency is very important
This content was created by FOX News Media's Branded Content Studio in partnership with ZipRecruiter. FOX Business editorial was not involved in the creation of this content.
Non-compliance with pay transparency laws can cost companies thousands in fines and harm their reputations.
States and cities across the U.S. are enacting pay transparency laws to help prevent discrimination. Depending on the law, employers may have to disclose pay ranges to job candidates publicly on job postings, at a certain point in the hiring process or even upon request.
And this trend is becoming increasingly important for job hunters. In fact, 88% of job seekers said it’s very important or somewhat important to know how much a job would pay before they apply for a job or agree to interviews, according to the December 2022 ZipRecruiter Job Seeker Confidence Survey.
Getting the right talent to apply for a job can be challenging. But hiring managers can try ZipRecruiter's smart matching tool for free to easily target the right job candidates and save time.
While there is demand for pay transparency among job seekers, many companies have fallen behind in making salary information more accessible despite having the information on hand. Eighty-one percent of companies say they form internal pay bands, but only 41% inform employees and job candidates about these pay bands, according to the job board’s survey of logged-in employers.
Letting employees know about pay ranges soon may not be an option for many companies, it could become a legal requirement. Today, nearly 44.8 million U.S. workers are covered by state pay transparency laws, according to data from the National Women’s Law Center. And by 2024, 22% of the U.S. population will live in a state covered by pay transparency laws, according to ZipRecruiter analysis.
Employers should use new pay transparency laws to transform the candidate experience
Even though pay transparency laws may pose new challenges for companies, these can also help companies attract and retain the right candidates.
"Disclosing pay upfront can set expectations appropriately, attract the right candidates, and prevent disappointment," ZipRecruiter said.
Additionally, providing easy access to pay information could boost applicant numbers. Job posts that include salary data receive 50% more applications on average, according to data by the hiring website. Job posts on the site that list salary information are twice as likely to deliver quality candidates.
Pay disclosures could become increasingly important in a time when wage growth has returned to its pre-pandemic levels and the gender wage gap has reached its narrowest point on record, the job posting company reported in a blog post.
"While many workers received large nominal wage increases following the pandemic, they generally weren’t large enough to offset skyrocketing inflation," ZipRecruiter Chief Economist Julia Pollak said in the post. "Now that inflation has eased considerably, inflation-adjusted earnings are finally growing again."
That growth may continue. About 63% of recent hires that switched jobs said they received a pay boost. And two in three of those said they earned a pay raise of 11% or more, according to the job board’s survey.
"Be cognizant that job seekers are likely seeking a pay increase when taking a new job, and being transparent about pay and benefits can help you land top quality candidates," Pollack said.
Employers that list job postings on ZipRecruiter can use its many features to find top talent. For example, the firm’s "Invite to Apply" tool has helped companies earn more than two and a half times more candidates who are nearly three times more likely to get hired.
Pay transparency policies can prevent costly compliance issues
Setting a clear pay transparency policy can help employers comply with ever-changing labor laws. Failing to do so can result in thousands of dollars in fines per violation, according to a report by ADP. And that’s in addition to any reputational damage. But by establishing effective pay transparency policies, companies can attract top talent, maintain job satisfaction and maximize pay equity–which is becoming a buzzword in the recruitment sphere.
Pay equity is the idea of compensating employees who have similar functions with comparably equal pay regardless of variables like race, gender and ethnicity.
And many states and cities have incorporated pay equity requirements into law. Here are some large employment markets that have adopted laws around pay equity, according to a March 2023 analysis by ADP and a report by Gibson Dunn.
California (Applies to all employers) Upon request, companies must provide job applicants with pay scales for the positions they’ve applied for.
Colorado (Applies to all employers): Companies must disclose hourly rates and salaries or ranges in job postings.
Jersey City, N.J. (Applies to employers with five or more employees): Employers that circulate print or digital job postings within the city must provide minimum and maximum hourly and salary ranges.
New York State (Applies to employers with four or more employees as of Sep. 17, 2023): Companies advertising jobs must provide compensation ranges.
Washington (Applies to employers with 15 or more employees): Employers must provide pay ranges in job postings.