Money can be an awkward talking point for job seekers and hiring managers alike. For decades, discussing pay in the workplace was taboo, but new laws and shifting expectations are setting new standards for pay transparency.
Entering 2024, 99% of creative, marketing and technology professionals say they’re more likely to apply to companies that include salaries or ranges in job listings. Realizing the rewards far outweigh the risks, organizations are racing to update their policies nationwide and abroad.
This guide answers the most common salary transparency questions that US hiring managers ask before acting. From the technical definition to the legal obligation, it includes everything you need to know about pay transparency policies in 2024.
- What is pay transparency?
- Why is pay transparency important?
- When is pay transparency a good thing?
- Where is pay transparency law effective?
- How should employers move forward?
Defining Disclosure | What is pay transparency?
Pay transparency is the practice of openly sharing compensation information. Most recently, the concept has dominated news headlines about the trend toward including salaries in job descriptions and divulging pay details early within the hiring process.
However, the term broadly refers to disclosing pay practices with current employees as well as prospective ones, and the level of wage transparency can widely vary from one organization to another. Some brands publish salary bands on their websites while others restrict pay disclosure to job descriptions. In fully transparent workplaces, everyone’s salary is known. Yet, more closed systems discourage or even contractually prohibit discussions around pay.
The latter was once the standard, but as of 2024, 60% of US companies share pay range data with their current employees, while roughly 70% include pay range data within job descriptions in at least some US states. Reports also point out that those numbers nearly doubled in the last year alone, and recent trends show no signs of slowing throughout 2024 and beyond.
Understanding Responsibility | Why is pay transparency important?
The driving force behind pay transparency is pay equity. Not to be confused with pay transparency itself, pay equity is the concept that “equal work deserves equal pay,” regardless of gender, race, ethnicity or any other status unrelated to the work.
While many US companies are taking steps toward creating more equitable environments, wage gaps still exist across industries. One recent study showed that women in marketing earned 24% less than men in 2023. More alarmingly, a separate survey revealed that female gamers can earn 99% less than male gamers. Over time, the pay gaps at large have been shrinking, but companies and lawmakers alike have a social responsibility to close them entirely.
Wage transparency is helping employers to do so by holding them accountable for their actions. When salaries are shared openly, they’re more likely to be applied universally, promoting a fair and equal environment for all.
Balancing Benefits | When is pay transparency a good thing?
Pay equity may be the most important reason for pay transparency, but it isn’t the only one. While disclosure has its drawbacks, there’s no shortage of evidence that pay transparency policies are always a good thing — when instituted properly. By weighing the advantages and challenges, companies set their practices for success and circumvent potential problems before they arise.
Advantages to Remember
-
- Pay equity improves talent satisfaction and performance. Morale, productivity, and creativity all improve when employees feel that their employers are transparent and compensation is fair. Research shows a strong correlation between team performance and pay policies.
-
- Salary transparency helps foster trust and attract talent. Companies can protect their reputations as desirable employers by showing that they pay well and competitively. Moreover, job seekers increasingly reject companies that don’t provide salary transparency for employers who do — even if the pay is the same.
-
- Publicizing pay ranges streamlines hiring processes. Businesses can ensure alignment with salary expectations from the get-go by sharing pay ranges with candidates upfront.
Challenges to Understand
-
- Disclosure can cause discord. Revealing pay information can indirectly result in hard feelings among team members. However, when pay policies are fair and equitable, employee sentiment is generally favorable. Ill will is more likely to stem from policy ambiguity, pay inequity or poor attitudes than wage disclosure.
-
- Pay is personal, and not everyone wants to talk about it. Some employees aren’t comfortable discussing their paychecks publicly, and companies should consider cultural preferences around privacy when crafting their policies. In many cases, transparency simply means showing how a company determines pay without revealing salary amounts.
-
- More transparency may mean less workforce stability. Some brands are facing increased employee mobility as workers seek out higher-paying companies. Still, transparent work cultures tend to have greater retention rates overall, indicating that the upside outweighs the downside over time.
Learning Laws | Where is pay transparency law effective?
In the US, salary transparency laws differ state by state and even city by city, posing a different form of challenge for nationwide companies that hire across state lines. To make matters more complex, pay range transparency laws are on the rise and continuously evolving.
In at least 8 US states, employers are now required to list salary ranges in job descriptions, when asked by job candidates, or at select stages during the hiring process. 2023 also saw a new bill introduced to congress that would a nationwide pay disclosure mandate, if passed. As of the start of 2024, salary transparency laws are now in effect in:
- California
- Cincinnati, Ohio
- Colorado
- Connecticut
- Hawaii
- Jersey City, New Jersey
- Maryland
- Nevada
- New York
- Oregon
- Rhode Island
- Toledo, Ohio
- Washington
In addition, laws have already been proposed in Maine, Massachusetts, Michigan, Pennsylvania, and Washington, DC. Illinois laws are set to go into effect in 2025, and the list continues to grow. Roughly 30 US states have legislature on the books.
Unfortunately, some companies post overly broad ranges, and over 30% of employers do not comply with their local pay transparency laws — risking penalties that range from $300 to $250,000 per violation. At the same time, organizations are increasingly taking the opposite approach by embracing transparency on their own accord, and compliance is expected to reach unprecedented heights in 2024.
Taking Action | How should employers move forward?
As we enter a new era of work, salary transparency is not just a legal obligation; it’s an ethical, tactical, and financial imperative. Pay disclosure policies can cultivate more equitable company cultures, and having open conversations about money can foster a healthy, creative workplace.
No matter your location — progress and innovation require adaptation to meaningful change. The companies that thrive in uncertain times embrace relevant trends and use them to improve their processes. In this new job market where change is the only constant, most employees want and expect salary disclosure.
For companies that seek top talent, team cohesion, and positive work cultures, transparency is a must. The bottom line is: When people feel valued, they thrive. And that’s good for business.
Download our 2024 Salary Guide.
In the age of pay transparency, salaries matter more than ever before. Explore the latest hiring trends and pay ranges for 100+ creative, marketing and technology professions.
