When Erin Gabriel was looking to leave teaching for a new career, she didn’t waste her time applying to openings that paid too little.
Gabriel lives in Colorado — a state where employers are required to include pay information in job ads, which made it easy for her to ignore anything with a salary range that fell below her standards.
“Sometimes the range is still really large, but it can at least give you a ballpark,” she said.
Ultimately, she landed a position in nonprofit communications that pays twice what she was making as a teacher, plus bonuses and guaranteed raises. She even managed to negotiate more than what the organization initially offered her.
“Coming from teaching you don’t really negotiate your salary,” she said. “This information helped me feel more confident.”
A wave of new salary transparency laws across the US is helping workers like Gabriel nab raises, land higher paying jobs or switch careers. Rules that went into effect in recent months in New York City, Washington state and California mean jobseekers are more likely than ever to encounter pay ranges when perusing open roles.
About 20% of workers live in states or cities where employers are required to list salary information in job postings, with others expected to follow. More companies have also started doing so voluntarily nationwide. And, in some states, if the data isn’t posted online, workers can request it on demand.
Stephanie Alston, the chief executive officer of Black Girl Group, a diversity recruitment agency, expects the laws to “play a critical role” in negotiations, particularly for women and people of color. Research has shown that salary transparency can help close gender and racial pay gaps, and the laws were passed to level the playing field for historically underpaid groups.
Half a dozen workers interviewed by Bloomberg News said that salary ranges helped demystify pay and, in some cases, revealed they were at the low end of the pay spectrum in current or previous jobs.
“I don't think it is a perfect solution as there are still plenty of discriminatory hiring practices,” Gabriel said. “But I do think information is power.”
Lisset Lanza, like Gabriel, used the salary transparency requirements that went into effect in New York City last November to switch from publishing to a higher paying career. She found the figures listed alongside roles in other industries “pleasantly surprising” and said it gave her the confidence to make the leap into a new field.
“I am a woman of color and a first-generation college graduate, and I’m at the very beginning of my professional experience,” Lanza said. “These laws eliminate the guesswork.”
She now works in higher education making $20,000 more than she did at her previous job, money that has helped her pay off credit card debt and build a financial safety net.
Other workers Bloomberg spoke with used publicly listed salary bands as leverage to get raises in their current roles or plan to do so in the future. Career experts say employees who want to do that should come prepared to make a case for why they should fall higher on a salary scale, including bringing a detailed list of value they bring to the role.
Alston at Black Girl Group said it’s important to also consider potential benefits, such as remote work options and paid time off, as part of a total compensation package. Bonuses are also generally not included in the publicly listed figures and in some fields, like finance, can make up the bulk of one’s annual pay.
The new laws don’t mean raises for all. Some workers might learn that they’re making more than advertised already; others might not successfully convince their bosses that they deserve more. Meanwhile, the bands listed aren’t always that useful. Some companies, including large employers like Netflix Inc. and Tesla Inc., have posted exceedingly big ranges, some are deflating pay — and many postings come with fine print that saying pay will vary based on a series of factors.
Scott Moss, the director of the Colorado Department of Labor and Employment’s division of labor standards and statistics, said it’s too early to tell if the regulations are making a dent in pay gaps. “Pay transparency affects just new hires; there’s no duty to disclose to everybody else who’s there, so the effect on gender pay gaps will depend on enough new hires coming through,” he said.
Still, just sharing pay in an honest way can attract underrepresented workers and build trust. “Candidates and employees are more likely to believe a company is fair if it posts narrower ranges,” said Alston. “If you do not want to destroy trust, don’t post too broad of a range.”
That’s exactly what attracted Mary Malloy Ursprung to her new job in biotech. She lives in the Boston area, where employers have no obligation to disclose salaries to applicants. But when she was hunting for a new role, she came across a posting that not only listed a range for how much it paid, but was clear on what the tasks would be. She ended up taking the job, in part, because of her new employer’s transparency — it also pays 20% more than she was previously making.
“I think companies in Massachusetts can make themselves more competitive by jumping on the train before it leaves the station, before it is something that's mandated,” she said. The state is one of a handful considering adopting a pay transparency law. “It’s respect for the applicant.”
This article was provided by Bloomberg News.