Pay can be a pain point for many companies, due in large part to rising wages and high turnover rates. Not only that, employers are feeling the heat from multiple fronts, especially as the younger generation of employees demands pay transparency.
Pay transparency laws for job postings have taken effect in several states across the United States with several updates on the horizon in 2023.
Since these laws will likely gain ground in more states throughout 2023 and beyond, NOW is the time for companies to take a hard look at their compensation plans for recruiting purposes and internal quality, even if they aren’t legally required to do so…yet.
What does this mean for your company? Our team at Vested HR explains.
What are the New Pay Transparency Laws?
These new laws for 2023 require employers to be more transparent with salary ranges and benefits. Depending on their jurisdiction, these laws require employers to:
- Provide applicants with the salary range for the posted position at a specified point during the hiring process
- Provide employees with the salary range for the position upon request, when changing jobs, or upon hire.
- Include salary ranges in job postings.
The states with new pay transparency laws that are going into effect in January 2023 include:
- Washington State
- Rhode Island
Governor Kathy Hochul also signed a bill in late December that will require businesses with more than four employees to disclose a range for annual salary or hourly rate for all in-house promotions or advertised positions. It will likely go into effect in September of 2023.
Other legislation is pending in South Carolina and Massachusetts.
The Importance of Pay Transparency
Pay transparency can impact not only an organization’s recruiting but its existing workforce, as current employees realize how much the new hires and others are being paid.
Businesses can get ahead of these transparency laws by revamping their pay structure and performing a pay-equity audit to ensure that their existing workers are paid fairly.
Posting pay can build trust in a company by
showing transparency to its workers.
Companies that pay fairly can benefit by posting their salary ranges, even in states where it is not currently required, giving them an edge over businesses that have decided not to post them.
The bottom line is that transparency in pay reflects well on job seekers and builds overall trust in the company, which in the end attracts top talent.
Learn More > How PEOs Enhance Employee Retention Rates
Stay Transparent with Vested HR
As new transparency laws come into effect in 2023, employers must be proactive in updating their compensation practices. Our team at Vested HR can help businesses navigate the changing landscape of pay transparency, providing expert guidance and resources to ensure compliance with the law. By striving for full pay transparency, employers can create a more fair and equitable workplace for all their employees.