Pay disclosure laws, or wage transparency laws, have been a d topic of conversation in HR and legal spaces over the past couple of years. The discussion has been renewed as New York state – following on the heels of the New York City Local Law 59 – recently approved a salary transparency bill that takes effect in September 2023.
These laws make it a legal requirement for employers to list the minimum and maximum salary ranges for new job listings “in good faith.” Supporters of this legislation see it as a proactive, employer-led effort to curb the ongoing wage gap, create more equity in the job market, and help fairly inform applicants in their job decision-making process.
There is much controversy around this approach, and some states have even responded by enacting state-level legislation that prevents their employees from sharing their own salary information publicly.
What does this mean for in-house counsel? Here are 3 things you need to know about pay disclosure laws in 2023:
1.) These laws put you at risk for non-compliance.
Legislation like this further muddies the already hazy waters of compliance – especially for your employment contracts. If you're not already using a CLM (or if you're somehow still using PDF's,) you run the risk of non-compliance. Having one, centralized repository for all your contracts helps you correct language for job postings and company policies that adhere to new legislation.
2.) Job postings can land you in hot water.
Establish clear goals that both legal and procurement teams can achieve together. This will help establish a system of accountability while also providing an incentive for collaboration. Develop a common understanding of what success looks like by creating shared metrics that both teams can use as benchmarks.
2.) Leverage Technology
Gone are the days of prioritizing “a good sense of humor” in your standard job post. As in-house counsel, you need to work closely with your HR team and hiring managers to manage expectations around job descriptions going forward. Although HR and hiring managers will not be creating the company policy per se, they will be having conversations with potential candidates and need to be on the same page as legal in their approach.
3.) Get yourself ready for “the new normal."
Even if your state is not currently impacted, experts predict "it's only a matter of time" before salary transparency laws are the new normal.
Here's a helpful list of resources that aid you in navigating these fast-changing individual state criteria:
- HR Dive's recently updated stat-by-state breakdown
- CNBC's full list of salary laws to go into effect in 2023
Bloomberg Law's guide to avoiding pay disclosure suits (and proactive tips)
- Best practices for posting jobs in 2023
For some, pay disclosure laws are a path toward equity and inclusion in the workplace. For others, these laws mean increased liability, risk, and potential non-compliance penalties.
Regardless of opinion, pay disclosure laws are a call to action for thoughtful, proactive planning, and an opportunity to manage your f contracts, terms, and policies efficiently. Contract lifecycle management software (CLM) helps in-house pros streamline processes and simplify pay disclosure management. Schedule a demo today to learn more.
Subscribe to the LinkSquares Blog
Stay up to date on best practices for GCs and legal teams, current events, legal tech, and more.