After new pay transparency laws in California and New York City faced rocky starts, employer compliance is up not just in two of the biggest labor markets in the U.S., but across the country.
About three quarters of job listings in New York City and two thirds in California now include pay information, according to data compiled by Roger Lee, co-founder of Comprehensive.io, a pay data and analytics site. Nationally, salary ranges appear on 44% of posts on Indeed, up from 18% three years ago, data released Tuesday by the job search site shows.
While Colorado enacted the first pay disclosure law in 2021, the trend reached a tipping point after California and New York City’s laws went into effect in recent months. Around a dozen states, including New Jersey, Illinois and Kentucky, are weighing similar regulations. Some of the areas with the biggest increase in ads including pay were in those places, including Honolulu, Hawaii and parts of Connecticut and Massachusetts, according to Indeed’s analysis. Big U.S. employers including Microsoft Corp., Citigroup Inc. and Alphabet Inc.’s Google have said they’ll publicly post salary information on job ads — even where not required.
“I’m really surprised with the magnitude of change we’ve seen,” said Cory Stahle, an economist with Indeed’s Hiring Lab.
The rules are meant to help close gender and racial pay gaps. Tuesday is Equal Pay Day in the U.S. — how far into the new year a woman would have to work to make as much as the average man did the year prior. (This year, it’s an extra two and a half months.)
Advocates for pay parity hope more disclosure will demystify the negotiation process and level the playing field. Already, some workers are using the information to boost their earnings though there’s little data or research on how much these policies are moving the needle on gender or other pay gaps so far.
The vast majority of U.S. states still don’t have any salary transparency requirements. In the South, jobseekers are least likely to encounter pay on listings. Of the 20 metro areas with the lowest share of posts on Indeed that included salary information, 18 were in Southern U.S. states. West Virginia and Kentucky are the only two in the region that are considering adding pay disclosure rules.
Still, holdouts might consider adopting the practice voluntarily to attract more candidates, Stahl said. Another Indeed survey of 1,500 jobseekers found that three quarters of applicants said they were more likely to apply for a role if it listed a salary range. Companies in another Indeed survey reported they get almost a third more applicants when they include pay information with job postings.
Those that do enter the fray, however, should prepare to explain pay decision to employees, said Amy Leschke-Kahle, vice president of performance acceleration at the Marcus Buckingham Company, a subsidiary of ADP. Some workers might not understand why their salaries fall outside a listed range.
“It’s a time of reckoning about how we pay people and what we pay people,” she said. “Make sure you have a clear approach and stick with it.”
