Salary transparency is a fundamental part of the equation for pay equity. Institutional misogyny still thrives within places of employment, making women more susceptible to pay discrimination. With added institutional racism, women who exist at the crux of misogyny and racism must deal with added institutional barriers which limits their ability to attain pay equity. Salary transparency has become a significant step toward addressing the power imbalance between employers and employees and tackling the wage gap. It dispels the air of salary secrecy that has historically kept women immobilized and unaware of salary discrimination.
Many states and localities have begun to take action to recognize the importance of salary transparency. States, including Colorado, Maryland, Nevada, Rhode Island, Connecticut, and Washington, have passed salary and pay transparency laws to mitigate the wage gap. A similar law in California went into effect in September. Cities, including Cincinnati and Toledo, have also acted on this issue.
A new NYC Salary Transparency Law, also known as Local Law 32, went into effect this week on November 1, 2022.
Under NYC Local Law 32, employers and employment agencies must include a “good faith” salary range for every job, transfer opportunity, and advertised promotion. The salary range must include the position’s minimum and maximum salary without leaving anything open-ended. This law covers all employers with a minimum of four employees or at least one domestic worker; among the four employees covered, only one must work in New York City. Following the law’s enactment on January 15, 2022, the New York City Council amended the bill in May 2022 to encompass all work ranging from hourly wage jobs to salaried full-time positions. Protections exist for full-time or part-time employees, independent contractors, interns, an employer’s hired family member of any relation, and any other worker category by the New York City Human Rights Law.
New York state has also made an effort to pass a similar law ensuring that employers disclose compensation or range of compensation to job applicants and employees. In June, the bill passed the State Senate, was amended and passed the Assembly, and sent back to the Senate for adoption right before the close of the legislative session. Enactment of this bill is important given that IWPR reports that women in the state of New York will not attain equal pay until 2046.
It’s critical that any legislation requiring salary transparency be enforceable and hold employers accountable. The first step is to ensure that employers who fail to abide by salary range publication requirements face the consequences; the NYC commission enforces the New York City law on Human Rights, and penalties can be as high as $250,000. Transparency is the first step towards equity, and mandatory reporting of salary and wages to public authorities is the next step. Such requirements are in place in California, which provides the basis for a state-enforced system for tracking workplace discrimination.
These kinds of actions by states and cities are very important in the mission to eliminate the wage gap. Passing laws that implement salary transparency; ensuring non-retaliation for workers who inquire about or openly disclose their salaries; and enacting the Paycheck Fairness Act, which passed the U.S. House of Representatives last year, are important stepping stones for closing unacceptable gender and racial/ethnic wage gaps.
