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HR Party of One is brought to you by BerniePortal.

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As an HR pro, you’ve heard of pay transparency laws passed in many states. If you’re somewhere

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like New York, you’re at the center! But this isn’t a trend: it’s a seismic shift

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in how the world of work recruits talent. Many employers may think, “But I already do

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some of this stuff, so changing anything now is just extra work on my plate.”

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While pay transparency legislation deeply impacts recruiting, it also affects your compliance.

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If you’re still wondering if this truly applies to you, remember:

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those who aren’t getting ahead of the curve are falling behind it. The companies

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improving their pay transparency (or not doing so) are your labor

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market competition. Consider this image taken from a job posting online: [Image onscreen]

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Does anything strike you as odd? I bet! But I’ll focus on one standout detail:

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how can a salary range fall between $1 and half a million dollars!?

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So in today’s episode of HR Party of One, let’s cover:

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What Is Pay Transparency? How Does It Relate to Equity?

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The 5 Ways Pay Transparency Laws Will Impact You, and

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How to Get Ahead of the Curve Let’s dive in!

What Is Pay Transparency?

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What Is Pay Transparency? More than likely,

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you’ve already encountered questions about pay transparency. Consider the

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laws protecting a workforce’s right to openly discuss pay rates amongst each

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other. That’s a very recognizable form of pay transparency, but it’s far from the only one.

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‘Pay transparency’ is a policy of honesty. Specifically, it’s when your organization is clear

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and open about pay rates and practices, like: Providing information about

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raises due to promotions Providing reasoning for why people

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in the same role make different amounts ; and Offering pay range information to applicants

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Your organization’s commitment to pay transparency also affects how potential

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applicants understand compensation for your open roles. Understanding compensation is critical,

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but you know pay transparency begins with, and hear me out: offering transparent pay.

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That sounds redundant, but it’s the truth. Pay transparency laws are the legislature’s way of

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getting organizations to make their pay structures transparent to the current and

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future workforce. So while pay transparency laws impact recruitment practices right now,

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the ultimate goal is to promote equity. Pay Transparency = Equity (Eventually)

Pay Transparency = Equity (Eventually)

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Pay transparency is critical to improving overall organizational equity. Many HR

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pros aim to improve overall equity, as it attracts talent and retains great workers.

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But equity can mean many things. Are we talking about moving salaries to a middle

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ground? Preventing pay compression? The answer is more complex and goes beyond just your workplace.

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Organizations with equitable pay practices set higher standards for their industry

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or community by offering competitive wages, honesty about upward mobility,

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and a clear-cut pay structure. Talent is attracted to those workplaces,

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so other organizations must improve their own pay transparency to compete for top candidates.

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No one will accept a job offer missing a defined salary range or growth opportunities when they

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could accept an offer with upfront honesty about wages and paths to achieve higher compensation.

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HR is an organization’s great equalizer because you are positioned to impact all of these areas

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of opportunity. You drive leadership to create transparent pay structures,

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commit to honest recruitment practices, encourage internal development and mobility, and more.

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Many jurisdictions have passed laws targeting the various components of pay transparency. I have

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a resource for you where we update which states pass laws in the description. Each jurisdiction’s

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law differs, but many share common ground. For an HR Party of One with a well-worn recruiting hat,

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there may be a lot of changes to make sooner rather than later. Let’s start with:

What Pay Transparency Laws Will Impact

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Pay Transparency Laws Will Impact:

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#1. Writing Job Descriptions: Pay transparency laws nationwide reliably

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have one major thing in common: they are changing how you write job descriptions.

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Companies must now include a pay range in their job descriptions in multiple states,

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including New York and California. The range must also be included in good faith,

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a legal term meaning that you should hold to the spirit of the rule, not the letter.

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Here’s an example: a company posts a job, and the job description contains a wage range specifying

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a customer service role is compensated between $53,000 and $67,000 annually,

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depending on other criteria. That’s in good faith, even if we don’t know more details.

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But what if the same company instead posted the job with a range of $30,000

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to $98,000? That’s quite a difference between the low and high end of a single

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role's compensation spectrum. I won’t even touch the example I had at the beginning!

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Companies that provide this kind of range in bad faith do so to conceal

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a role’s actual compensation. Such a wide range attracts more applicants,

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and competitive talent may apply planning to make $98,000 when that

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uppermost range is much more than what the company will agree to pay.

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Not all jobs have pay ranges. Some hourly roles may have a flat amount, which is fine. However,

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remember that a range may not be a clearly defined set. If someone applies and you want to hire them,

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but they want more than is offered, consider whether you would say yes

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or no. This might be a time to play it safe and define what sort of skills, experiences,

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etc., merits someone to make more than what is initially offered.

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#2. Excluding Internal Applicants: Some states’ pay transparency laws require employers to offer

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internal applicants information about roles as they become available. Employers in Washington

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with 15 or more employees must provide pay scale information concerning internal

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movement to employees who ask for it. So if someone is promoted to a managerial position,

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they can request pay scale info to learn the salary range of their new position.

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We’ve all seen horror stories about capable, driven employees promoted into leadership

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roles without increased compensation—more work for less money. Laws pushing for internal pay

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transparency prevent this by allowing employees to advocate for themselves if promotions arrive

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without a deserved raise. This is one of the ways pay transparency promotes equity.

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Additionally, some states now require employers to offer roles to potential

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internal applicants. You should always choose the best candidate;

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legislation won’t prevent that. It intends to prevent employers from exclusively seeking

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external hires to block the upward mobility of those within their current workforce.

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#3. Paying People in the Same Role Differently: Some pay transparency laws require employers to

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define the criteria for deciding why people within the same role make different amounts.

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The crux here is that while the role’s outlined responsibilities may be identical, the people

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within the role are not. For example, the state of Maryland took steps to ensure employers have

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clear reasoning for how certain certifications or degrees, tenure, etc., impact why someone makes

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more than another in the same position. This is Maryland’s “Equal Pay for Equal Work” clause.

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For example, if two customer service representatives have the same skill sets and

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began working together simultaneously, why would one get a raise over another? An employer must

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be able to explain why, such as if one person creates documentation for their role to aid

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in training other hires. Also, that criteria must apply across the board, not just once.

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#4. Asking Applicants About Pay History: Any HR pro knows there are things you can and can’t ask

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in an interview. Some states have barred employers from asking applicants about their pay history.

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The goal is to prevent employers from basing pay negotiations on someone’s current wages.

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It’s another “spirit vs. letter of the law” concept. Since pay transparency legislation

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aims to increase equity, employers should not use someone’s current salary to curtail their offer.

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I have some friends with degrees in higher education. Once,

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my buddy who finished a PhD in a difficult field applied for a job. Obviously,

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he had the qualifications and experience, plus references, samples, and more. He was the ideal

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applicant! As a teaching assistant finishing his degree, he made around $20,000 annually.

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One of the companies he applied to asked for his current pay rate. For context,

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the lower end of the role he applied to was around $85,000; the higher end was somewhere in the 120s.

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They offered him $50,000, a serious lowball considering the role and his resume. Absurd!

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5. How You Might Use Recruiters: Using a third party to recruit for open

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positions does not offer a loophole to certain regulations. Most states

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have this language baked into their pay transparency legislation. Any recruiter

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or service provider helping you hire must follow the same rules you have to.

Getting Ahead of the Curve

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How Can You Get Ahead of the Curve? Pay transparency laws aren’t

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a “what if.” They’re a “when.” Preparing now can help you in the

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long run and make you look extra great compared to the job market competition, who may not be as

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forward-thinking to include salary ranges in job descriptions. Adding that one detail can vastly

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improve your recruitment rates, and it puts you on the right side of the law. When legislation passes

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in your state, you’ll be ahead of the curve. Speaking of job descriptions… that’s one

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thing that is an absolute hassle to deal with! Sometimes they’re quick, but you should focus

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on other projects. BerniePortal’s applicant tracking feature enables me to create and

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save templates for job descriptions and other communication needs. If someone is moved to

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the next hiring stage, I can use one of my templates to congratulate them and outline

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the next steps. I don’t waste a second of my time writing that could be spent hiring

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If you really want to improve transparency and equity,

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consider using a levels document to guide your organization’s compensation strategy.

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It creates learning pathways for everyone in your workforce and defines criteria

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for increased compensation in a clear format. It’s the ultimate pay transparency and equity

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tool. I’ll link our previous episode on the topic for you to check out.

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It’s unreasonable to overhaul your whole system to introduce each state’s unique

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requirements into your policies. This episode informs you on the most common

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changes heading our way, but your state’s specific laws are of critical importance.

Final Thoughts

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Your hiring practices can make or break your organization’s pay transparency. The

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recruitment playing field is turning into a three-way battle between legal compliance,

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current hiring practices, and your organization’s commitment to equity.

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Battle isn’t the right word—let’s go with opportunity instead. Get ahead of

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the curve and implement impactful change to take advantage of how the push for pay transparency

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gives you leverage in the talent market. And remember—Your role is as strategic as you make it!

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That’s it for this episode! Subscribe to our channel and ring the bell to

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get notifications about our newest episodes,

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which are released every Tuesday and Thursday! As always, thanks for watching.