How pay transparency can affect your job search or raise

Knowing if you get paid fairly for the work you do is a puzzle shrouded in lack of information. However, that may change, and pay transparency could be the catalyst. It’s a growing trend for companies to disclose what drives an existing job or job opening – whether it’s voluntarily or because governments mandate it.

Navigate salary ranges

So far, about a dozen states and municipalities have mandated access to payroll information, including California, Colorado, Washington, and New York City. Companies in jurisdictions are generally required to publish salary ranges indicating minimum and maximum wages. The rules differ: Sometimes only job applicants must be told, while other times current employees can also request information about their salary range.

Roberta Matusson, president of Matuson Consulting in Boston, consults with companies looking for top-tier talent. She believes pay transparency is “a step in the right direction”.

“Knowledge is power. If you had no idea you could make more money, you wouldn’t even ask for it,” says Matwson.

Is this the end of salary negotiations?

Lexi Clark, vice president of people at Payscale, a national provider of compensation data and services, says pay transparency won’t eliminate salary negotiation. Instead, Clark says she will encourage discussions about current and future wage projections.

It will help employees and candidates “understand what their expectations should be, where there are (salary) limits and where there can be flexibility. It balances the playing field between employers and candidates for a more open and transparent conversation,” she said.

Lulu Seikaly, Payscale’s chief corporate attorney, points out that under current laws, employers are not prohibited from offering salaries above the posted range for the job, as long as the company can provide objective reasons for the exception.

In the past, Seikaly says, companies often based salary offers on what an individual earned in their previous jobs. “A lot of countries have now banned it.”

If a potential employer asked you about your salary history, Matusson says, “I’m not going to refuse to answer; I’m going to say, ‘OK, tell me what you’re applying for for this position.'” “I’d like to turn the question over.”

Will payment gaps be eliminated?

Pay transparency reveals salary ranges, but does it narrow gender and race pay gaps? It may be too early to tell.

However, Payscale’s Clark says organizations that are more open about salaries often have a well-defined compensation structure and are less prone to pay inequality.

It predicts how the gender pay gap might narrow: “Women’s pay would increase to where it should be — some men’s overpaid pay might drop slightly, to be more in line with where it should be.”

Read the full story, plus more of this week’s top financial news:

How pay transparency can affect your job search or raise

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