The deeply embedded generational norms and cultural taboo of sharing salaries are being eroded as a new wave of pay transparency rules inundated America’s workplace problems. At the beginning of 2023, Washington, New York, and California joined Colorado’s leaders in preparing for salary transparency for most open jobs. This article discerns the contours of workplace problems and equity challenges that have long been shrouded in the garb of pay.
Other states like Illinois and Massachusetts have also begun to rekindle their laws to necessitate employers to divulge and share salary ranges for advertised positions under the novel pay transparency laws.
The age-old stigma of beleaguering salary transparency resembles a paradoxical and unbreakable glass ceiling. The words ‘How much money do you make?’ are tethered to fear – of reprisal from the employer or social convention because not engaging in sharing salaries has been the status quo of employee experience.
Pay Transparency Rules: Will They Add To Workplace Problems Or Solve Them?
Pay transparency rules are accelerating the shared interests of anti-discriminatory appellants, younger workers, and state legislators. The growing salary transparency in the US is attributable partly to the stubborn gender and racial pay gaps and also to the pragmatic revelation that wage information was only accessible to companies via salary benchmarking services and to the fortuity of individuals lucky with a well-positioned friends circle.
Many laws enacted in the previous decade have interdicted employers from furloughing or punishing workers who vocalized their pay ranges. The taboo of sharing salaries is being distastefully looked down upon by Millennials and Gen Z.
The cogency of pay transparency laws is to eliminate market inefficiencies that have repercussions on employee experiences, lifetime earnings, and workplace problems. Amongst the many reasons to be sanguine about the pay transparency rules, there are a few to be vigilant about too – owing to unintended consequences. In 2022, women were earning only 82 percent of what men earned and the cases of gender pay discrepancies between employees of color are broadly known.
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The need for salary transparency growing in the US will theoretically balance the scales for the employees to know their worth and terminate unfair pay disparities.
In the past, pay transparency rules were favorable because they assumed the role of a signal to a broader set of investments in good employee experience. Companies that were sharing salaries were presenting themselves to potential job seekers as more caring about fairness among their employees.
But, this may not embody the future of pay transparency laws. Job seekers will seek newer signals of their employer’s vested interests in compensation and equity. Companies will have to discover other tactics to parade their virtues if they want the best talents for their business.
Employee Experiences Face The Taboo Of Sharing Salaries
While the laws don’t impact the culture of salary secrecy, many formal secrecy rules are affecting the kinds of dictums employees are being subject to. Explicit orders may be codified in handbooks with violations and their punishments. And employers in states with pay transparency laws are imposing informal rules to prevent employees from sharing salaries.
But it is also surprising to know that 70 percent of workers prefer to pay secrecy – an interpretation of the taboo of sharing salaries is that if the boss has decreed it, it must make sense.
Another aspect of pay transparency is employer legitimacy – a hindrance and an opportunity. While employer legitimacy can permit companies to behave illegally without the fear of reprisal, it can also open a window to transparency. Employees may support and follow workplace policies and employers who are preparing for salary transparency.
On a final note, the only thing that the growing laws of pay transparency won’t need is cultural change because salary taboo is largely a byproduct of bosses who impose it.