Laws Requiring the Disclosure of Salaries: A Welcome Trend
Connecticut recently passed a law that will require employers to provide wage range information to employees and job applicants for their positions. This law becomes effective in October 2021. In passing this law, Connecticut joins California, Colorado, Maryland, and Washington.
Texas has no such law on the books. However, it is high time that the Texas legislature considers this.
Pay discrimination thrives in secrecy. Even though it is illegal, far too many employers still tell employees they cannot discuss their pay with co-workers and put those unfair rules in employee handbooks.
Even though those companies that don’t explicitly forbid discussing pay in their policy manuals still strongly discourage it. Far too many employment contracts specifically require the employee to keep salary information and the other terms of the contract confidential.
Under the new Connecticut law, an employer must provide an applicant the wage range for a position for which the applicant is applying upon the earliest of (1) the applicant’s request, or (2) prior to, or at the time the applicant is made an offer. The employer must also provide an employee the wage range for the employee’s position upon (1) the hiring of the employee, (2) a change in the employee’s position within the company, or (3) the employee’s first request for a wage range.
This is great. Though the company has to provide only the range of wages paid for a particular position, that range contains much valuable information. If the person is hired at the bottom of a salary range, that person can then ask questions about why the salary is set there and how the person can increase within the range for the position.
This also forces employers to take a hard look at the pay ranges for positions and to figure out the reason such a wide range in pay might exist.
In doing this analysis, many employers might be shocked to see that the women in a particular role are paid towards the lower end of the range. If the company sees a trend like that, it can figure out the reasons for the pay disparity and fix it.
Most companies will likely hate these laws because the companies prefer keeping salary data highly confidential. Yet, that confidentiality allows companies to hide discriminatory practices.
Since Texas does not have a law like this, Texas employees or job applicants must be proactive to make sure the pay is fair and comparable to members of the opposite sex.
How to do that? First, do some research. Figure out what the market wages should be. Glassdoor.com can be a good place to start. Ask friends and colleagues about their pay. In some cases, hire a compensation consultant to give you a salary review in the particular market.
Second, ask the employer what the salary range is for any position and how an employee moves up within that salary range. If a company is reluctant to share that information with you, ask why.
Ask the company this question: “If you won’t tell me what you pay others in this position, how will I know I’m paid fairly?”
Many companies won’t like this question, but it is only in pushing these boundaries will truly pay parity will be put in place.
Finally, lobby our legislators in Texas to pass a law similar to the new Connecticut law. That is when real change will occur.