Pay transparency likely to become nationwide standard as NY law goes into effect

Over half of all US job postings include pay transparency after a New York law mandating such disclosures went into effect last month, according to Indeed's Hiring Lab. In New York itself, 61% of job postings in August featured pay transparency, nearly doubling the rate from the previous year. The adoption of new salary disclosure rules in September is expected to further boost these figures.

The inclusion of pay information in job postings is not all negative and seen by some HR experts as a way for employers to build trust with employees, attract new talent, and potentially address gender and racial pay disparities. Overall, the share of postings with pay transparency information has nearly tripled from 18% in February 2020 to 50% in August 2023, and this figure is likely to continue growing. Pay transparency rates vary across regions, with Western states leading in providing pay details, while Southern states tend to have lower rates. Colorado, which implemented pay disclosure laws in January 2021, boasts the highest rate of pay transparency at 81% of job postings.

While pay transparency is becoming increasingly common, it may introduce challenges and complexities into the hiring process, such as addressing salary disparities for current employees. Employers are encouraged to be prepared to discuss equity and parity goals and establish clear policies regarding salary ranges and raises. Additionally, some states are enacting more intrusive legislation regarding pay history disclosure, indicating that the trend of pay transparency is likely to evolve further in the coming months and years, with potential implications for employers nationwide.