Some business trends got endless press in 2022 — such as the Great Resignation, inflation, and quiet quitting — but one flew relatively under the radar: laws across the U.S. that impact how businesses discuss and disclose salaries.
Can an employer ask a candidate about their pay history? Can employees tell coworkers how much they make? And must an employer list pay ranges on job postings? It depends where you live! Let’s break this down…
Asking About Candidates’ Pay History
Employers might want to think twice before asking job applicants about their most recent salary. Twenty-one states and an equal number of municipalities have adopted salary history bans.
However, the extent of these bans can vary. For example, a state with a pay history ban could still allow employers to ask for candidates’ desired salary ranges.
On the flip side, Wisconsin and Michigan actually ban local salary history bans. Who knew?
Posting Salary Ranges
Eleven states and New York City currently have pay transparency laws requiring employers to provide salary ranges upfront. All but two of those were passed in 2019 or later, so this is a trend we can expect to spread.
Nevertheless, these laws can be vaguely worded and based on “good faith,” and some employers have advertised extremely broad ranges.
Employee Wage Conversations
This one isn’t a new law, but it’s gaining recent attention. Under 1965’s Executive Order 11246, employees have the right to inquire about, discuss, or disclose their own pay or that of other employees or applicants.
So basically, yes, employees can gab away about what they make, and no, employers can’t do anything about it. This right is subject to certain limited exceptions.
Adapting to Pay Transparency Laws
Some of these rules are straightforward; others are vague and sure to evolve. Here are four steps to help you prepare your business:
- Conduct a salary audit on filled and open positions to ensure they are fair and competitive.
- Review all current job postings — and templates — to ensure they include the required information (e.g., minimum and max pay).
- Clearly communicate your policies to employees and candidates to ensure that everyone’s on the same page. Your HR team should be prepared to answer questions openly and honestly.
- As always, in-house counsel can help ensure you’re in compliance. (If you don’t have a lawyer on staff, maybe it’s time to post a job listing for one?)