If you recruit in the USA, you will be aware that as of this year, California, Rhode Island and Washington joined Colorado, Connecticut, Maryland, Nevada and New York in issuing legislation to ensure employers comply with laws related to pay transparency.
In this blog we will explore what the rules are for these newer areas, plus also offer a reminder of areas who already had such legislation. With fines varying across the different from $100 per violation all the way up to $5,000, ensuring you are aware of the laws, is important for both financial and reputational risk.
What is pay transparency and why is it important?
According to a recent survey by Monster, 98% believe that a company should disclose salary ranges on a job advert – with 53% advising they would be unlikely to apply for a role without knowing the salary first.
Salary transparency can therefore help attract the right candidates to your roles and create a more open, transparent and smooth hiring process.
Pay transparency is also more than just a salary listed on a job advert – when used correctly it can bring a level of transparency to a company to help existing employees understand why they are paid that particular amount and also how they can move up salary ranges. This can help build trust within a company and address any potential issues around gender pay etc, as well as helping retain high-performing staff.
The below offers a summary as to the relevant legislation within each affected State:
California
Employers who have fifteen or more workers (and at least one in California), must list the salary range on all job adverts for roles that will or may be filled in California, including for jobs that can be done remotely from the state. The salary range should also be given to any third party that the employer engages with to publish a job posting.
For all companies (of any size), current employees are also entitled to the salary range of their position, upon request.
Colorado
Employers with at least one worker in Colorado, must list the salary range and benefits (e.g., healthcare, commission, retirement etc), on all job adverts for roles that will or may be filled in Colorado, including for jobs that can be done remotely from the state.
Connecticut
Employers with at least one worker in Connecticut, must share the salary range for a position if an applicant asks for it, or when an offer is made (whichever happens first).
An employer must also provide the employee the salary range when they change to a new position in the company, or if the employee requests it.
Maryland
All Employers must share the salary range for a position if an applicant asks for it.
Nevada
All Employers must provide the salary range to applicants after a first interview, or when an employee is looking to transfer internally - even if the candidate hasn’t asked for it.
An employer is also prevented from asking candidates about their salary history.
New York (City)
Employers with four or more workers (and at least one in NYC), must list the salary range on all job adverts for roles that will or may be filled in New York City, including for jobs that can be done in the field or remotely from the city.
New York (State)
All Employers must list the salary range on all job adverts for roles that will or may be filled in New York State, including for jobs that can be done in the field or remotely from the city.
Rhode Island
All Employers must provide the salary range to candidates and current employees upon request but must disclose the range when they officially offer a role, whether that be to a new candidate or an existing employee transferring within the company, even if they have not been asked.
An employer is also prevented from asking candidates about their salary history.
Washington
Employers with fifteen or more workers (and at least one in Washington), must list a salary range and benefits on all job adverts, including for jobs that can be done remotely from the state. The salary range should also be given to any third party that the employer engages with to publish a job posting.
Other States to be aware of
Note, whilst the below states do not require employers to advise candidates of a salary range for their roles, employers should not ask candidates about their salary history as a way of determining their future pay. They can also not prevent employees from discussing pay:
- Alabama
- Delaware
- Hawaii
- Illinois
- Maine
- Massachusetts
- New Jersey
- Oregon
- Vermont
Here at Strive, we source top tier sales talent for scaling and hypergrowth tech companies. To learn more about how we can help your business scale, contact our team on 0203 983 0770 or email hello@scalewithstrive.com.
Note: As with any legal requirements for your company, we would always recommend you keeping up to date with relevant legislation and seeking external advice as needed.
