Starting in April, New York City is requiring most employers to disclose salary ranges on their job postings.
The motivation behind this new law is to reduce pay inequity and save people time when they decide which jobs to apply for. Below we hear from two members of the recruitAbility team regarding this law and its implications.
Damien Richburg, CFA, Director of Finance & Operations Recruiting
The biggest benefit of this law for candidates and employers is time. Salary transparency creates a more efficient labor market. The interview process is time-consuming, and among the top reasons why candidates turn down jobs is compensation. Salary transparency should save time on both sides.
On the flip side, companies typically don’t have a fixed salary range. The salary they have in mind (or that they’re willing to share publicly) is usually flexible based on the candidate. So in this new reality, certain people may not apply for roles because the salary range doesn’t meet their requirements, and companies could miss out on exceptional candidates who are deterred by the posted compensation.
Overall, the law is intended to benefit job seekers more than companies. If companies are paying people the market rate, nothing should change. Salaries may shift higher, which is a cost companies will have to bear.
Scott Beardsley, Director of Technical Services
I’ve never considered it to be detrimental (or discriminatory) when companies don’t disclose salary ranges on their job descriptions. When salaries are not added to a job description, candidates apply based on their interest level in the role and company instead of simply for monetary reasons. So that lends itself to better-fit candidates.
By posting the salary ranges for jobs, companies can expect that 100% of the applicants will ask for the top range, whether or not their qualifications justify that. As a result, companies will begin lowering the top range for salaries so that they have wiggle room in negotiations. This will be problematic in other ways.
As a result, I anticipate that this law will be repealed at some point because other issues will arise.
Additional Viewpoints: Salary Transparency Laws
The labor market is dynamic, and the impact of this New York law will be evident within months. Below are additional perspectives on the salary transparency law.
- Bloomberg: “Salary transparency is good for everybody”
- Fortune: “Businesses argue NYC’s new law to require salaries in job postings will hurt the local economy”
- Yahoo: “How NYC’s salary transparency law could worsen labor issues in the city — and benefit remote workers”
- Indiana Business Journal: “Pay transparency could level the playing field”
Have any hiring needs? Email us at sales@recruitAbility.ai for a free hiring assessment and salary/compensation audit.