In A Big Win For Workers—New York City Will Make It Mandatory For Companies To Disclose Salaries On Job Advertisements

It feels like almost everyone is looking for a new job. There are approximately 11 million jobs available, and every month millions of Americans leave their jobs in search of better opportunities. One of the most important aspects of a new job is the pay. So far, the overwhelming majority of companies conveniently omitted wages from their job postings.

Lost during the holiday season and the Omicron surge, there was good news that got overlooked. Under a new law passed by the New York City Council – which will take effect in April 2022 if not opposed by January 14, 2022 – New York City employers will have to include the minimum starting wage and maximum for any “advertised job, promotion or transfer opportunity.”

This will be a game changer and bode well for new job seekers and current employees. The bill lifts the curtain on wages, which have often been viewed as a deep secret hidden by business leaders.

This unfair way of doing business is detrimental to the person looking for a new job. A candidate would be required to interview three to six people and more for a period of up to six months. After the climax of the arduous and emotionally draining interview process, an offer could be made well below the enthusiastic candidate’s expectations. It was a complete waste of time and energy for everyone involved in the hiring process. The experience seems bad for the company. The discouraged job seeker will surely share this horror story on social media and with friends, which could make it more difficult for the company to recruit people in the future.

Even in this hot and tight job market, the interview process usually involves experiencing rude behavior, last minute interview cancellations, lack of feedback, ghosts, and receiving a lowball offer. When the new law comes into effect, things will be different. A person will have the opportunity to view the salary scale and make an informed decision on whether or not to continue in the role. There would be no more guesswork or wish that the money was there at the end of the interview test, as the job seeker will have the pay bracket in advance.

The bill, which passed by 41 to 7 votes, states that employers who fail to disclose minimum and maximum pay ranges for New York-based roles engage in discriminatory practices. This bill applies to job advertisements in the private and public sector, as well as to promotions and transfer opportunities.

Council member Helen Rosenthal said of the new law: “Lack of pay transparency is discriminatory and anti-worker” and “Every New Yorker should have the right to determine whether they will be able to support themselves. his needs and those of his family when he makes a request. for a job. It’s time to level the playing field and restore some dignity to New Yorkers looking for a job.

There are already pay transparency laws in California and Colorado, and it’s likely that with New York on board, it will spread across the country.

In a fairly recent new law enacted by a number of states, it was ordered that companies could not ask a job seeker how much they earn and what their salary history was. While this is not a law in all states, a significant number of companies based in locations that do not have to comply with the ruling voluntarily adhere to this “no questions about compensation” policy. .

There will be positive consequences and unintended consequences resulting from this new rule. In recruiting, there is a term for the salary of someone who has worked in a company for a long time: the “loyalty discount”. When the worker started ten or twenty years ago, the pay was relatively low. With only 1% to 2% increase per year, coupled with inflation, the compensation of the loyal employee will be much lower than that of someone who changes jobs regularly and will perceive an increase of 10% to 20 % at each move. This creates a significant gap in the remuneration of workers. There can be great fear on the part of management that when salaries are posted online, internal employees will be shocked and dismayed at how much less they are earning compared to their peers. They will feel like they have been cheated all these years, as incoming employees are paid a lot more than long-tenured employees. Companies could be forced to rapidly increase the salaries of current employees in order to stem massive resignations.

They say it’s not polite to discuss sex, politics, religion, and your salary in public. However, the bill opens the conversation on another hot issue. The next push could be to require companies to share employee salaries for the sake of openness and transparency. They will better understand what others are getting paid and where they stand.

Workers will say that knowing the remuneration of colleagues and those of competing companies will enable them to take appropriate action to remedy their remuneration. With little opacity and transparency, this leads to frustration, hurt feelings, and beliefs that they are being exploited or discriminated against.

We can see signs of blatant discriminatory pay practices if and when wages are disclosed to everyone. While it is not illegal to share salary information with co-workers, companies generally pressure people to keep quiet about it. Employees feel like they are being left in the dark. They don’t know if they are significantly underpaid or properly remunerated.

The New York City bill is part of a growing employee-centric shift. Previously, a large number of states in the United States had laws in place that prohibited companies from asking how much someone is currently earning or about their salary history.

Laws were drafted, in large part, to help close the gender pay gap. This law greatly benefits a top candidate who earns considerably less than what is offered to her for a similar position in a competing company. It could also have big unintended consequences. Before the new law, before any interview is held, a hiring manager or human resources professional will ask the candidate how much he earns and will require proof of his remuneration.

Now that the job seeker no longer has to disclose their salary, offers could well exceed this range. For example, if a person has a job that earns $ 100,000, but has the skills, experience, and background to take on another position elsewhere by paying $ 250,000, they will no longer be locked into their current salary.

These trends bode well for workers. In a hot and difficult job market, it is likely that we will see a constant stream of new and positive initiatives from politicians and companies to improve the lives of employees. Some executives will set up humanistic programs because it is the right thing to do. There will be managers who will not be very happy with the changes, but who will recognize that if they do not take good care of their employees, they will quit and join their competition.


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