Salary Transparency in Washington – Will It Be a Game Changer in the Job Market?
Beginning January 1, 2023, each posted job listing in Washington state must provide a “pay scale or salary range,” as well as details regarding benefits and other remuneration. On March 30, Washington Governor Jay Inslee signed a bill improving salary transparency.
In addition to Colorado and New York City, the state now requires firms to provide pay ranges in job postings. A few additional states require wage information to be disclosed to job seekers during the hiring process, but not in job advertisements. Almost twenty states restrict companies from requesting job applicants to divulge their pay history during the hiring process.
The new Washington legislation modifies an existing rule that compels companies to pay an applicant the minimum wage or compensation for a position only after the candidate gets selected for the job.
Regardless of the applicant’s request, the new rule will require Washington firms with fifteen or more employees to voluntarily publish a pay scale or wage range in all job advertisements, as well as all of the perks and other compensation to be provided, in connection with the employment.
The Washington statute applies to any employment advertisement, irrespective of where it appears and whether the company conducts the recruitment directly or indirectly through a third party.
Employers must still provide a wage scale or salary range to existing employees who are offered a new role or promotion under the new law. Employers must guarantee that all positions vulnerable to internal transfer have a pay scale or salary range available.
Suppose you have been transferred to a different department in your organization. Unless the company discloses your new salary beforehand, it’s tough to tell if you’re being underpaid compared to your peers.
Before the new law comes into effect next year, several issues remain, including how the state would interpret many essential clauses.
The initiative will promote transparency by providing candidates with more information when negotiating their salaries and saving time for both companies and applicants. Let’s hope it contributes to closing the persistent wage disparities between men and women of color.
Lawmakers believe that hiding information during the recruitment process is not correct because everyone doesn’t have the same resources. This isn’t fair or equal. People should be able to tell if it was a suitable fit for them and if they could sustain themselves and their families. Everything comes down to equity.
Beware of the Job Postings
SB 5761 is unlikely to apply to a basic “Help Wanted” sign in a cafe window. A sign that said “Professional Chef Wanted” would probably do the trick. However, the business organizations who fought for the law aren’t sure where that line will be drawn in the end.
The law has been passed, and everyone will try to follow it, but there is no guidance. That’s a challenge.
Senate Bill 5761 is an Act (enacted by the Washington legislature) concerning employer obligations to provide wage and compensation information to job applicants; and revising RCW 49.58.110.
Senate Bill 5761 requires employers to reveal the hourly or salary remuneration, a range of hourly or salary compensation, and a broad overview of all benefits offered to the selected candidate for each job opportunity. The new legislation applies to all companies with 15 or more employees.
Some Practical Problems That May Arise
The new rule exerts excessive control over firms. They frequently have no idea what compensation or benefits to offer until they evaluate a pool of candidates.
Because of the wage posting requirements, the bill may deter employers outside of Washington from hiring remote workers from Washington. The new Washington law does have disadvantages. It lacks information on what defines a pay range.
Can an employer offer a job that pays between $15 and $1000 per hour? Technically, you may conform to the law.
More Power for Workers
This bill represents a more significant shift of power from employers to employees, who are quitting jobs in droves due to the pandemic’s “Great Resignation.”
Job seekers have some real negotiating power for the first time in the last ten years. According to the Bureau of Labor Statistics Job Openings and Labor Turnover Survey , there are roughly 1.8 vacancies for every job applicant.
I believe we are in a situation where employees are reconsidering what constitutes a decent employer, fair employment, and what constitutes a reasonable income for them.
Final Words
Whether or not it is required by law, several organizations prefer to reveal their salary ranges to survive in a competitive labor market.
Some organizations believe this is a method to attract the best brains in a tight labor market. Therefore, it’s becoming more popular. It provides a competitive edge. Pay information in job postings consistently attracts more candidates than those that do not. Transparency not only aids in hiring but also builds a corporate environment that encourages employees to stay.
If you are an entrepreneur, ensure your present employees’ wages are equivalent to the salary you’ll need to give new hires in such a competitive job market. Once the law is implemented, everything will be public, and any inconsistencies could be detrimental to employee morale.
Any firm that pays industry-standard wages to its employees will have the edge over others in retention.
Lyle Solomon is a Principal Attorney at the Oak View Law Group.
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