EVERETT — Imagine not knowing the price of a gallon of milk until you reach the check stand, or learning that another customer paid $3 while you were charged $5 for the same gallon.
Now think about applying for a job without knowing the pay scale or whether you’ll earn as much as other applicants with similar qualifications.
A new state law aimed at giving job seekers a clearer picture of how they’ll be compensated went into effect Jan. 1.
Under the Equal Pay and Opportunity Act, employers with 15 or more employees must provide a salary range or pay scale in job postings, along with a general description of benefits and other compensation.
Lawmakers say the new mandate will help narrow wage disparities based on race or gender.
After controlling for race, ethnicity, education and other variables, women on average were paid 22% less than men in 2021, a wage gap that has narrowed just 1% in the past 30 years, according to the Economic Policy Institute.
“Pay transparency is important to eliminating gender-based pay discrepancies,” said Celeste Monahan, assistant director for Fraud Prevention and Labor Standards at the Department of Labor & Industries. “This policy offers employers important guidance examples so they can meet these requirements.”
Alicia Crank, executive director at Seattle CityClub in Edmonds, has had her share of job interviews in which the big pay reveal didn’t take place until late in the game.
“When you finally hear what the number is … you wonder why you’ve wasted all this time,” Crank said.
During a lengthy hiring process, other job opportunities can get put on hold and you lose out on those, she said.
“You end up resigned to taking the job because you don’t want to start the process all over again or your unemployment benefits are running out,” Crank said.
The new law also benefits employers by hopefully reducing the number of new hires who are likely to leave when they find a better paying job, she said.
“I’m glad this is now a law,” Crank said. “This saves everyone time and energy by putting all expectations to the forefront.”
Washington is now one of about a dozen states with pay transparency laws in effect. Some cities, including New York City, have also enacted statutes. The rollout in New York has been a bit bumpy with a few companies posting huge pay ranges — $50,000 to $250,000, for instance. As job seekers on Twitter have noted, the difference between the minimum and maximum salary doesn’t exactly scream transparency or integrity.
For several years now, Jenifer Lambert, chief strategy officer at Everett-based Terra Staffing, has been encouraging employers to post wage scales in their job ads.
“The data shows that there is a strong preference from job seekers to see the pay in a job posting — even if they’re not choosing a job based on pay,” Lambert said.
Even before the law went into effect, many employers had begun disclosing pay rates in their ads, Lambert said.
“In the past year, it was the minority of posts that did not include pay in some form,” Lambert said.
And some online job boards no longer accept ads that don’t include pay information.
Merely throwing in a pay range, however, won’t cut it, Lambert said. Employers should be prepared to explain the reasoning behind their range to potential and existing employees. If a business, for example, advertises a job with a pay range of $45K to $65K a year, “It needs to say why they’re going to pay a new hire $50K instead of $65K,” she said.
Under the state’s new statute, job applicants and employees can file a civil lawsuit or lodge a complaint with the labor department against an employer they believe has violated the law. Civil penalties range from $500 for the first violation to $1,000 or 10% of damages, whichever is greater, the labor department said.
Innovative Salon Products, which makes salon-only hair products in Monroe, began posting ads with pay and benefit details more than a year ago.
The company’s previous “help wanted” ads didn’t include that information. In a fiercely competitive labor market, the old ads weren’t attracting enough applicants, owner David Hanen told The Daily Herald in November 2021.
When Innovative Salon plugged in wages, benefits and perks into job posts, the number ticked upwards, said Michele Fish, Innovative Salon’s vice president.
“It helped tremendously. We got a boost in applicants,” Fish said. “The more specific you are in a job posting, the more details you can offer — the more applicants.”
Anticipating the state’s new pay transparency law, Snohomish County’s second largest aerospace employer Aviation Technical Services began adding salary ranges last year to its job postings.
The company, which provides maintenance and repair services for airplanes, also bolstered the criteria it uses to define its pay parameters. Wages are based on experience, education and industry rates, “solid hiring practices,” said Dayna Eden, the firm’s chief people officer.
“We are never just pulling a salary number out of the air and offering it to somebody. It’s all based on market data,” Eden said. Stronger guidelines are also helping the firm’s managers answer questions posed by existing employees, who want “to know the whys behind their pay rate,” Eden said.
ATS, which operates in three states, Washington, Missouri and Texas, implemented its pay transparency program company-wide.
“It certainly is different putting the entire range out there for all the world to see, but we feel confident that we can stand behind why the range is the range,” Eden said.
Eden hopes job seekers won’t shop for jobs based on dollars alone.
“Jobs that pay less might have a fantastic company culture. If you don’t apply because it pays less, you could potentially be missing out,” she said.
What could go wrong?
New York City’s pay transparency law went into effect last fall. Among other provisions, employers must post a “good faith pay range.”
Soon after, job seekers reported seeing help wanted ads with massive pay ranges. Media and news companies in particular were called out on social media for some jaw-dropping ranges.
In a tweet, travel writer Victoria M. Walker pointed to a New York Post job listing with a salary range of $50,000 to $145,000.
“I can already see that the ‘good faith’ part of the law is going to be tested,” Walker tweeted. “A salary range of $50,000 to $145,000 is deeply unserious.”
A Wall Street Journal ad for an audio production position gave a pay range of $140,000 to $450,000, a whopping $310,000 gap between the lowest and highest salary.
“It is driving us nuts to see companies pretend to comply with new pay transparency laws but still post outlandish ranges like $50,000-$250,000. Get real!” tweeted Compt, a Boston-based software firm that helps companies manage benefits packages.
A normal spread is usually $15,000 to $20,000, Amy Spurling Compt’s founder and CEO told The Daily Herald.
“Instead we’re seeing companies post huge ranges,” Spurling said. “While technically compliant, those wide ranges mean nothing. This is the same as not having a range.”
Posting a range with an enormous spread is yet another way to pay “people a lot less than you think they’re worth while reserving a bit more for the people you need to be rock stars and are paid extra.”
“It’s just so logical to post the actual range,” she added. “Why would you want to waste your time as an employer — and a candidate’s time — if it’s not a range they’re interested in?”
Some businesses offering a tighter range are still trying to flout the law by creating pay gaps with benefits, Spurling said.
Signing and retention bonuses, stock options and commuter and childcare perks are common ways to bump up compensation packages. But such business practices can lead to pay gaps and inequality, Spurling said.
“It ends up breeding wage gaps that women and people of color continue to see,” she said.
“It sounds like Washington has a better law than some I’ve seen since it requires employers to include a detailed benefit package. That’s actual compensation transparency rather than just salary transparency,” Spurling said. “Legislators are trying to move us in the right direction. We’ve just got to make sure that companies don’t find the sneaky backdoor loopholes.”
Washington’s Department of Labor & Industries is offering free webinars to help employers understand the new standards. The online sessions will cover what constitutes a job post, pay range or wage scale and benefits.
For more information, go to the labor department’s online Workshops and Training Center at tinyurl.com/4vn2xp94.
Upcoming webinars are scheduled for Jan. 12 and Feb. 9.
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