- Pay transparency laws aim to increase equal pay for workers of color and women and protect job seekers during the hiring process.
- Even with salary ranges out in the open, there is still ambiguity that stems from these laws.
- A good rule of thumb for job seekers: If the upper end of the range is 1.5 times the lower end of the range, then this is generally considered reasonable.
Amazon recruiters and other company volunteers talk to job seekers about opportunities at Amazon during the Vertiport Chicago Career Fair on September 17, 2019 in Chicago, Illinois.
Scott Olson | Getty Images
Pay transparency laws aim to increase equal pay for workers of color and women and protect job seekers during the hiring process. Colorado was the first state to require companies to provide salary ranges when advertising jobs, and since then, eight other states have put the law in place along with 16 others considering it the District of Columbia.
However, even with the salary ranges out in the open, there is still ambiguity created by these laws, especially when it comes to how job seekers factor in the pay ranges now available for job openings.
“In some industries and professions, wide ranges are the norm,” he said. glass doorChief Economist Daniel Zhao. “But in other cases, it’s very unusual. In that sense, I think it’s important for job seekers to understand the context they’re in.”
Now that pay ranges are more accessible than ever, the job of understanding them has been left to job seekers. However, the range of these ranges still does not provide job seekers with absolute transparency, as these ranges leave job seekers at a loss as to what salary they will eventually get.
According to a study by Glassdoor, wage bands have widened only modestly in states like California and Washington since pay transparency laws went into effect. Glassdoor found that the majority of pay ranges are narrower than plus or minus 20%. Before these laws went into effect, California’s posted wage ranges were more or less 9% from the midpoint but have now widened to 11%. Washington also saw the salary range widen from 11% to plus or minus 12% after these laws went into effect.
“We’re not seeing this explosion of companies publishing unnecessarily large domains,” Zhao said. “I’ve seen the bands widen very, very slightly since these laws were put in place. But it’s not a dramatic shift in any way.”
Although the salary ranges do not scale to extreme levels, it can still be confusing for job seekers trying to understand potential salaries.
“I think a good rule of thumb for job seekers is if the upper end of the range is 1.5 times the lower end of the range, that is generally considered a reasonable range,” Zhao said.
If a job seeker comes across a posting where the lower end of the range is $40,000, this rule of thumb would show that the upper end of the range should be around $60,000. In the event that the wage range exceeds these caps, Zhao explained, job seekers should do more research on the company and the situation to determine if the numbers they are looking for are reasonable.
These ranges also tend to vary depending on the industry. When it comes to lower paying jobs, the pay bands are usually narrower and more transparent than higher paying jobs. For example, a cashier at a grocery store likely has a starting salary and is posted on signs outside storefronts.
“These jobs tend to be more standardized, with responsibilities not so different between two people with the same job title,” Zhao said.
Being a Vice President of Finance, by comparison, is a common title where you’re likely to see a lot of variance in the business, so those types of companies would probably have a somewhat broader scope in order to take on those different responsibilities that people might have. “.
Understanding typical salaries in their industry, in their specific job title and in their geographic area are all important things that job seekers need to consider, in order to understand pay ranges.
About half of Glassdoor’s job listings include salary ranges, Zhao said. As pay transparency laws continue to expand, pay ranges will likely become the norm. However, having the ability to see the wage range on offer raises the question of how much job seekers should ask when interviewing.
said Stacy Haller, Senior Professional Counsellor CV builder.
Your level of education, previous work experience, and technical skills are all factors that determine where you fall in the pay range. While most job seekers want this cap, you need to make sure you meet all of the criteria.
“When you demand far more than what you are worth in the market, you are cutting yourself out of the race,” Haller said.
In some cases, it is possible to negotiate a salary above the upper end of the range if you are a job seeker that checks all the boxes.
“There’s always room for negotiation, no matter what that pay range is,” Haller said. But I say this with several caveats. One is, you must have all the qualifications for the job, and you must be able to prove why you deserve that salary.
Some employers may be unwilling to budge from the stated pay range simply because that is all the funding they are approved for, or because of equity concerns that may arise from excluding some applicants and not others.
“It’s important for job seekers to keep in mind that the compensation package is not just about salary, it includes a lot of other things as well, as employers may have a little bit more flexibility,” Zhao said.
Bonuses, days off and the ability to work remotely are all benefits that could make a lower salary worthwhile, he said, along with the opportunity for salary increases that might not be possible if you started at the end of the pay range.
Even with these issues, pay transparency laws open doors to greater fairness and clarity within the labor market for people in many different positions.
“This information is useful to everyone,” Zhao said. “Even if you are not necessarily in the job market, you can still use information from job advertisements to understand whether you are being paid fairly based on the market.”
And as more states enforce pay transparency laws, research from Resume Builder found that 85% of people are more likely to apply for a job that lists a salary range, while 63% of workers would demand equivalent pay if it was revealed that co-workers earn more for the same job.
“I think people learn to adjust to having that information out there on the employer side as well as on the candidate side,” Haller said.
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