The Pay Transparency Trend

Traditionally, pay information has been treated as confidential and kept private by employers. However, in recent years, there has been a growing movement towards pay transparency.

This shift means more employers are openly sharing information about a job posting’s expected salary or salary range, whether they’re choosing to or mandated to.

2023 Pay Transparency Laws

So far, eight states have adopted pay transparency laws: California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington.

Recently, the first Midwest state became posed to join them. Illinois’ amendment to the Illinois Equal Pay Act passed in both the House and Senate. When signed by Pritzker, Illinois employers with 15 or more employees will be required to disclose pay scale and benefits.

According to the Center for American Progress, another 15 states are considering enacting state laws.

Why Employees Want Pay Transparency

The push for pay transparency is motivated by various factors, including increased awareness of pay disparities, the desire for greater fairness and equity in the workplace, and the push for corporate accountability.

Those in favor of more clarity in pay argue the following as potential long-term benefits:

Increased Trust 

When employees have access to information about compensation practices, proponents believe it can foster trust in the organization and reduce feelings of unfairness or secrecy.

Equity and Fairness

Transparent pay practices can help identify and address potential pay disparities based on gender, race, or other factors, promoting a more equitable work environment.

Motivation and Productivity

Employees may feel more motivated to work and perform better when they have a clear understanding of how their pay is determined.

Recruiting and Retention

Pay transparency can attract talent to the organization, as potential employees may be more inclined to join a company with open and fair compensation practices.

Knowing 23 states have either already enacted or are currently considering pay transparency, employers and HR experts in every state should be paying close attention. After all, noncompliance could translate to large fines or competitive disadvantages. 

While your organization is busy keeping up with HR trends, make sure you have a robust system in place to handle the more tedious tasks. At Future Systems, we offer applicant tracking, streamlined onboarding, and other services to assist your business. Reach out for a quote today!