Author, Lauren Stumpf, Media Communications & Client Services Specialist, Rancho Mesa Insurance Services, Inc.

Pay transparency is becoming more common for companies, especially as laws are being passed making variations of it a requirement. Pay transparency is the idea that employers should be open, or transparent, about what they pay their employees, and how they decide on compensation for specific roles.

More employees are wanting clarity about their own pay and how it compares to their peers. According to HR and recruiting experts, employees may leave or give less effort at work if they feel they’re not being paid fairly.

Job recruiters are also finding that people searching for job opportunities want to see pay ranges on job postings, and some will not apply if that information is not available.

As of January 1, 2023, California employers with 15 or more employees must include base pay ranges in job postings and ads. Colorado, Washington, and soon to be New York, are among other states to pass similar laws.

Employers should be aware that employees already have a legal right to discuss their pay. Under federal law, employers may not keep their non-supervisory employees from discussing their wages with each other. In addition to rights under federal law, many employees and including supervisors have protections under state laws that allow them to freely discuss their wages. It is recommended that employers eliminate any policy telling employees that discussion of wages is discouraged or prohibited, or that wages are confidential.

Utilizing Rancho Mesa’s RM365 HRAdvantage™ Smart Employee Handbook Builder is a great way to ensure that your company policies are compliant.

Being open with salary expectation up front can save companies time and money on recruiting. Hiring managers can waste a lot of time on interviews if they wait until after they have conducted multiple interviews to finally reveal the salary, only to learn that it does not meet the expectations of the candidate.

Job postings that include pay transparency are shown to have significantly more applicants than those that do not. In the tight labor market that we are currently facing, especially in the construction industries, employers should be willing to try anything that will set them above the rest.

For additional resources on pay transparency, our clients can visit the RM365 HRAdvantage™ portal.