5 Reasons to Support National Pay Transparency

Last week a bill was introduced in the U.S. House to require salary range disclosure nationwide.

Do you support it?

I think it’s a no-brainer for 5 reasons.

1. The toothpaste is out of the tube

24 states already have pay transparency laws on the books, including California, Washington, Colorado, and New York.

2. “As California goes, so goes the nation”

The concern would be if requirements are more restrictive than California’s rules — but that doesn’t seem to be the case with this bill.

Back in October when I polled comp leaders on how they plan to implement pay transparency, a majority said they plan to apply California rules everywhere for simplicity.

3. A majority of workers are already covered

As of January 1, 2023, a majority of US workers are already covered by some form of pay transparency law.

A national law would simplify the patchwork framework in place today.

4. The European Union is already doing it

The EU passed new pay transparency legislation just last week that goes further than the proposed US rules.

Bear in mind that salary range disclosure gets all the attention, but pay transparency laws can cover several things:

1. Pay range disclosure
2. Salary history bans
3. Gender pay gap / pay equity reporting
4. Retaliation bans

The new US bill is a baby step forward.

5. Exec comp proved the world won’t end

Pay transparency is often met with fears like employee protests, lawsuits, and leaking competitive secrets. While these things can and do happen — and much remains to be seen about the long-term impacts of pay transparency — they generally don’t.

Just look at the exec comp world, where executive pay has been disclosed to shareholders and the public for over a decade now. Administration is harder than managing the PR (unless an activist shareholder shows up to ruin your year).

But…

Exec comp transparency laws have not been particularly successful in reining in runaway executive pay. Will broad pay transparency laws help end pay inequities, or just add red tape?

I think it’s a great place to start. Sunlight is the best disinfectant.