Is Florida Next In Line To Consider Pay Transparency Regulations?
States like New York and California are implementing new regulations regarding the disclosure of pay by employers. This pay transparency is upsetting to some employers and workers as well.
Why Do Some Want Pay Transparency?
Why do some want pay transparency? The simple answer is to combat discriminative practices and encourage pay equity between genders and minority groups. Employers feel more restrictive requirements may result in an aversion to advertising for new hires, costing jobs. California’s new law will impact small businesses of just 15 employees by requiring any job posting include a pay scale for the position advertised. Some believe it will create distrust in the workplace, directly encouraging existing employees to “job shop” over an imagined slight in rate of pay.
Is Disclosure Of Pay Scales Fair To Business?
In addition to disclosing pay scale to competitors, many employers dislike the necessity of setting pay scale prior to meeting the applicants. From experience, they feel it is unfair to expect employees to understand or appreciate the nuances that guide pay practices. They will likely be subjected to more legal action against them.
Pitfalls To Pay Transparency
Employees may become suspicious and discuss rates of pay with each other, creating rumors and cultivating a feeling of distrust between employees and managers. Proactive companies aim to create an environment where communication with management regarding pay is not scary. Remove the mystery by setting consistent parameters like education and performance benchmarks, helping employees set expectations. Reviews should be a positive experience when possible, and communication should flow in both directions. Managers should be expected to set an employee performance review schedule and stick to it.
Some companies will likely experience pay compression, where employers attempting to attract new hires during a competitive hiring market period with inflated starting rates, eroding the natural division (and gap) between managerial salaries and those they manage.
Call Sam Bond Benefit Group Today
More information on pay transparency and pay equity is available by contacting Sam Bond Benefit Group today. As an independent agent working on behalf of business owners, Samantha Bond Richman has spent 32 years developing solutions for human resource information systems, compensation administration, and employee benefits meant to attract, retain and motivate employees. Call (877) 426-6320 to learn more or contact us on our website.