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Eight states have passed pay transparency laws. How effective are they so far?

Samantha Fields Mar 22, 2023
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New York City's stab at pay transparency offers insight into how such laws could work in other states. Alex Wong/Getty Images

Eight states have passed pay transparency laws. How effective are they so far?

Samantha Fields Mar 22, 2023
Heard on:
New York City's stab at pay transparency offers insight into how such laws could work in other states. Alex Wong/Getty Images
HTML EMBED:
COPY

Eight states have now passed laws requiring companies to include a salary range in all job postings.

More than 25% of workers in this country live somewhere with a pay transparency law according to a new analysis from the National Women’s Law Center — 16 more states and Washington D.C. are considering them this year.

So, how effective have these laws been? New York City’s experience offers some insight.

Right after New York City’s pay transparency law went into effect last fall social media blew up with examples of absurd salary ranges some companies were posting.

One listing at Citigroup was $0 to $2 million — the company later said it was a glitch. But a bunch of companies posted huge ranges that really didn’t tell applicants much of anything.

“I think [the companies] saw how bad of an idea that was because there was a lot of public backlash,” said Andrea Johnson at the National Women’s Law Center. She said that example hasn’t really been the norm.

“The majority of employers are posting real ranges that truly reflect what they’re willing to pay, the minimum and the maximum,” Johnson said.

It’s too soon to tell if pay transparency laws in the U.S. are doing one of the main things they’re intended to do: reducing gender and racial wage gaps.

“But we do know from other countries that have similar laws that there has been a noticeable effect,” said Emiliano Huet-Vaughn, a professor at Pomona College. He thinks that result is likely to happen here, too.

“The challenges are in implementation and enforcement,” Huet-Vaughn said. “You know, in the U.S. there hasn’t been always great compliance.”

And so far, he said, few states seem to be actively enforcing their pay transparency laws.

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