A pay transparency law in New York that takes effect next month will likely spark a nationwide surge in workers’ demands for wage increases, experts tell The Post.
Starting Nov. 1, employers hiring in New York City will be required to include the minimum and maximum wage in every job posting — from $15-an-hour dish gigs to seven-figure tech and finance jobs.
The law aims to help job seekers avoid applying for jobs that pay too little and to reduce gender and racial pay gaps – but its biggest effect will be to spark many ‘awkward’ conversations between bosses and current employees, according to Eli Freedberg, a partner at labor law firm Littler Mendelson.
“When a current employee sees a new salary posted and they’re at the bottom of the scale, it’s going to raise some uncomfortable questions,” Freedberg told the Post. “This is going to have a tangible result by inflating the salaries of current employees.”
While the the law only applies to the five boroughs, experts say this will impact the whole country as employers want to be open to hiring remote workers who live in cities. This means that all jobs that could be done in New York will soon include pay scales.
Colorado, Nevada and Connecticut also passed salary range laws in 2021 – and states like California and Washington are expected to implement similar measures in the coming months, further increasing the likelihood that salary ranges will become the national standard.
Some companies, including real estate site Zillow, have already started posting salary scales online. A typical Zillow listing for a software test engineer reads: “In Colorado, Connecticut, Nevada, and New York City, the standard base salary range for this role is $98,600.00 at $157,400.00 per year.”
Remote workers who live in cheaper states may demand higher salaries when they see what their colleagues in more expensive coastal towns earn, Brian Kropp, chief executive of consulting firm Accenture, told The Post.
For example, a banker in Charlotte, North Carolina, might demand a raise after seeing how much new recruits earn on Wall Street, Kropp said.
The bill was originally scheduled to take effect in May, but was pushed back to November due to pushback from business groups like the Partnership for New York City. Kathy Wylde, CEO and chairman of the group, told the Post that she was glad the implementation of the bill was pushed back, but said she was still worried it would hurt small businesses.
A white-collar insurance worker in her 20s told the Post she supports the new law, saying she would likely quit her job if her company posted a listing for an identical position with a higher salary range than hers. .
“If I [found out I] was underpaid, I would be pissed off and probably leave,” said the worker, who asked not to be identified.
Many workers have taken advantage of rising wages and a near-record unemployment rate to earn bigger salaries by changing jobs – a trend that has been nicknamed the “great resignation”. The raises for new hires have paved the way for a wave of long-serving employees demanding better pay, according to Kropp, a human resources expert.
“Companies over the past year have raised the salaries of their new hires in order to attract them to the job market – but what very few have done is raise the salaries of their current employees,” said Kropp.
The only reason current employees who make less money than new hires wouldn’t ask for more money is because they’ve started “actively looking for a new job at another company”, he added. .
Banking industry sources said they are already trying to negotiate wages by talking to friends at rival banks and reviewing H1-B visa data, which requires companies to disclose how much they pay some state-based foreign workers. -United.
“Smart people are already using this as a negotiation tactic,” one banker told the Post.
The bill should have less impact on hourly workers in industries like retail and food service, Freedberg said, because there is less wiggle room for hourly wages in that industry.
“It definitely impacts white-collar work more than your retail and hospitality-type jobs,” Freedberg said. “Wages in your fast food industry tend to be pretty contained, say $15 to $22 an hour…there won’t be much variation.”
Still, Kropp argued that all workers would benefit from knowing how much a potential job might pay before applying.
Employers who fail to publish wage lists will not be fined if they add ranges within 30 days of being warned that they are non-compliant. If they don’t add the range or rack up repeat violations, they can face fines of up to $250,000 per violation.