What Effects Are Salary Transparency Laws Having?

While still not a federal law, many states and localities have enacted laws aimed at providing greater salary transparency for job seekers as well as researchers and policy makers concerned about issues like wage gaps by gender or race. New York State passed its own pay transparency law in 2022, and now that the law is in effect, researchers are starting to get a better picture of whether and how much it helps job hunters.

For one thing, it gives new entrants into the workforce a much better idea of what they are facing, and can aid them in negotiating salary. According to the National Women’s Law Center more than 25% of the country is now aided by new laws and the number of new job listings that include salaries is up. 

However, employers and HR departments are choosing to advertise salary bands, a possible range of pay, that are often too broad to be of any use to a potential job seeker. According to a New York Times story, Netflix, for example, advertised a senior manager job with a pay band of $195k-$510k; hardly much use to applicants. As the Times reports, this trend seems to be expanding among high pay industries including tech, pharmaceuticals, and scientific R&D.

One issue is that states and localities have little in the way of concrete plans on how to enforce their pay transparency laws, allowing companies to muddy the waters for job seekers. In New York City, the Human Rights Commission has received hundreds of complaints about noncompliance, but has not disclosed whether any action has been taken. These transparency laws are gaining in popularity as conflict between employers and workers heats up, with a labor market that is still hot.