In a job interview, were you asked what you were making in your previous job?

…or what you expect to earn in a job you were interviewing for?

Commonplace questions like these can indicate the symptoms of “Pay Inequity and Pay Transparency”.

When an employer’s policies either knowingly or unknowingly promote pay inequity, that’s a problem…and outside the law.

Historically, women and people of color have been victimized by these policies though its effects have been noted among all demographic groups for many years.

The Equal Pay Act made it illegal for employers to pay women lower wages than men for equal work on jobs requiring the same skill, effort and responsibility

Title VII of Civil Rights Act prohibits discrimination in employment based on protected class status – Race, Color, Religion, National Origin or Gender.

Laws are evolving to prevent a job applicant’s salary history or salary expectations to dictate what an employer offers in compensation.  Under this upcoming regulation, salary ranges will be posted both externally and internally to ensure full knowledge and a ‘level playing field’ for both individuals currently working in a particular job and those applying for positions.

At this point, while this law is specific to New York City, there are strong implications for companies operating across the US due to the larger trend in pay transparency laws at the state level and increasing opportunities for remote work.  What can businesses do to prepare?

Employers should conduct a pay equity analysis of incumbent employees to prevent an increase in employee relations issues

For those companies that will have to comply with the law, it is important to ensure incumbent employees’ salaries match job advertisement salary ranges

The possibility exists for pay inequity and discrimination allegations to come from incumbent employees if the salary range in job advertisements does not match their salary.

Similar laws are being considered in many states (including NY State).  Conducting the analysis now will allow more time to make changes before it becomes law in other locations.  Set pay ranges now and make them a part of your job postings.  Review your organization’s pay history and make sure that your employees are being paid fairly (inside the appropriate pay range).

In a March 2021 survey by Women in Revenue, women in revenue-facing roles said they value compensation information so much that transparent practices and policies could help attract or retain them.

Pay transparency equals employee retention and means fairness in the workplace – everyone wins!

UPDATE: April 29, 2022: The New York City Council amended and delayed its pay transparency mandate April 28. The change pushes the effective date to Nov. 1, giving employers several extra months to comply.