Wage Transparency Laws and Compliance

Many states including New York, New Jersey, and Connecticut have strict laws regarding pay during the hiring process. The goal is to minimize the likelihood of pay discrimination beyond the rules set on a federal level. It is essential that all employers and interviewers are aware of these wage transparency laws to ensure they are and remain compliant.

Pay Disclosure

It is required in some states to disclose a pay range when posting an open position, both internally and externally. An easy way to ensure compliance is to have a job description for each role prior to posting the application. This way, you know exactly what the role requires and can assess appropriate compensation.

Even where not required by law, having a thorough job description and pay range is a great practice to implement. It ensures the employer, the applicants, and any interviewers know the requirements, expectations, and compensation of the role. Additionally, it can protect the company from lawsuits for pay discrimination by having everything in writing before the hiring process begins.

Be sure during conversations with candidates to include other aspects that might contribute to overall compensation. This can include benefit offerings, bonus/commission opportunities, auto or cellphone allowances, or other compensation. This is an opportunity to showcase all the company’s offerings and draw in top talent as well.

Prior Pay Laws

In addition to disclosing a pay range, many states are prohibiting companies from asking applicants or their employers about current or past pay. This wage transparency law hopes to prevent employer’s from setting compensation based on prior pay. Instead, employers will look solely at an applicant’s qualifications and the role for which they are applying to set pay. Similar to setting a pay range, even if this is not required by law in your state, it is a wise practice to implement to protect against pay discriminations lawsuits.

Interviewer Dos and Don’ts

As you go to interview a candidate for a role, keep these wage transparency laws in mind. Even if your state does not have these laws in place, abiding by them can help your company avoid lawsuits on pay discrimination. Be sure to train your interviewers on these laws and what they can and cannot ask.

Interviewers can ask what an applicant is hoping to make in this role. They can ask about experience with other employers. But they should not, and in some states cannot, ask how much they have previously made or any other question relating to previous compensation.

If you have questions on how to remain compliant during the interview process or want to know the exact laws impacting you, let us know – we’re happy to help!

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Eric Thieringer President
Eric Thieringer is president of Eli Advisors, an HR, payroll and employee benefits firm focused on serving small to mid-size organizations. Eli's services and support address the frustrating gaps that challenge employers and their employees. By solving these problems, Eli Advisors creates financially sustainable programs and services that help organizations attract, retain, and engage the talent needed to succeed.