NYC Aims to Tackle Gender Pay Gap with New Salary Disclosure Laws

In September of 2021, we featured Connecticut's House Bill Number 6380, which requires businesses to disclose salary ranges for all open positions. New York City (NYC) is following suit, aiming to tackle the gender pay gap that's persisted even as more attention has been brought to it. We explore this new law, the state of salary disclosure nationwide, why some parties are opposed to this trend, and what it means for employers. 

The What and Why of Salary Disclosure in NYC 
Beginning on May 15, 2022, all employers will be required to publish a salary range for open roles. This applies to all job postings, with no exceptions built in. This is part of a three-tiered effort by NYC to reduce the gender pay gap. Transparency is thought to reduce the chances of pay discrepancies between men and women in the job market. The city is also spearheading legislation to prevent employers from asking about a candidate's previous salaries and looking for other existing pay gaps. According to recent census data, no progress has been made in improving pay equality between full-time male and female employees.  

Salary Disclosure is Trending Across the Nation 
NYC isn't alone in salary disclosure efforts. There have been efforts made at the NY state level, but no firm progress yet. California, Nevada, and Maryland are among a long list of states and cities that have enacted similar initiatives. Research has shown that salary secrecy contributes to the gender pay gap and little progress has been made in reducing it. This is a good indication that the trend will continue, with more states and localities likely to enact similar regulations in the future. 

In addition to state and local laws, the federal government has gotten involved in salary disclosure efforts. While mostly leaving it to states and localities, the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) has enacted rules to protect employees of federal contractors and subcontractors from being terminated for discussing, disclosing, or asking about their salary equity.   

Business Leaders Are Skeptical 
Many businesses have come out in opposition to the new NYC initiative, stating that this imposes restrictions on salary negotiation, which has been key in business operation for decades. By disclosing a range, opponents have stated that this reduces their ability to tailor salaries based on a candidate's background, capabilities, and earning potential rather than helping to narrow the pay gap.  

What does this mean for NYC employers? 
This puts employers in the spotlight when it comes to the fight against the pay gap, with the onus being on them as they plan to hire for open roles. With less power to negotiate, they may look for other ways to incentivize especially desirable candidates, from new benefits to added perks. Overall, salary disclosure is a fairly new concept, so its full impact is yet to be seen. 

While these efforts are new, there is evidence that they do work. Recent research from Canada indicates salary disclosure lowered the pay gap by about 30%. However, there's also evidence that it lowers overall salaries since individuals lose the ability to negotiate their own salaries, which can be higher than a company's expected range. 

As the salary disclosure trend continues and these initiatives mature, we'll be watching the topic closely. 

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