CNBC Make It wants to hear from New York City workers who will be affected by the city’s new wage transparency law. Are you planning to use the newly acquired salary data to discuss your own salary? Contact working reporter Jennifer Liu [email protected].
Ash Ramirez has extensive experience discussing pay equity in the workplace, but they are still uncomfortable with the usual ways when it comes to discussing their own salary expectations with future bosses.
Ramirez, 28, a diversity, equity and inclusion professional in New York City, has been looking for a new job since being fired in June. Interviews tend to go like this:
Hiring managers ask, “What are your salary expectations?” Ramirez uses a common negotiating tactic of avoiding being the first to come up with numbers and asking how much the company has budgeted for the position. Yet again and again, hiring managers find a way to turn the problem back on them.
“It was very uncomfortable,” Ramirez told CNBC Make It. “I want to make sure I’m defending myself and that I’m being fair in hiring me.”
Ramirez is well aware of the prejudice against them because of their identity — “I’m trans; I’m non-binary; I’m Latino” — that affects how they navigate their job search. “As a more feminine person, I am very aware of the gender pay gap,” Ramirez added. “I’m also LGBTQ+ and there’s a pay gap for that ability.”
But now, they’ll get another paycheck directly from their employers: As of Nov. 1, job postings in New York City must include the minimum and maximum wages employers are prepared to offer new hires.
It could be an important tool for job seekers like Ramirez to take the guesswork and pain out of negotiating salaries for new jobs, which day-to-day workers and economic experts alike hope will shrink play a key role in the wage gap.
Flipping employers’ salary scripts will take the guesswork out of negotiations
Wage transparency policies are hugely popular with workers, which economists say is key to closing the racial and gender pay gap. The U.S. Census Bureau estimates that women earn 82 cents for every dollar men earn, and the gap is widening for many women of color.
Closing the wage gap is a major goal of laws like New York City, where employers must disclose the scope of every new job, promotion or transfer opportunity. The legislation applies to employers with four or more employees performing any job that can or will be performed in whole or in part in New York City, whether done in an office, on-site, or remotely from an employee’s home.
Research shows that women are making progress in initiating pay negotiations, but when they do, they are generally less successful than men, and they face greater penalties for violating gender social norms.
Once the salary figures are in, job seekers say the public scope will help them focus on applying for jobs that actually pay them what they want – saving them the time and pain of finding out during interviews that the salary is too low.
Ann Cascella, 34, was looking for a job as a data analyst in New York City last month after layoffs at her company.
Before November, she hadn’t seen many companies preemptively listing salary ranges for job openings. Conducting research on sites like Glassdoor and LinkedIn is tricky, she said, because they can be too general (like national or even state averages) or based on outdated employee submissions.
Cascella has attempted to study job openings in Colorado, the first state to pass a law requiring pay on job advertisements in January 2021, and estimated pay for similar jobs in New York City given the higher cost of living .
But she doesn’t have to spend time or energy doing these calculations anymore.
“I think surprising salary details will be included in jobs. The more transparency the better,” Cascella said. “I’m excited about providing more justice to New Yorkers.”
Knowing the salary range up front will calm Sneha Rawal’s anxiety during the interview. The 32-year-old communications professional has been on the hunt for a new job for about five months, and he doesn’t have to worry about when the talk of pay will finally come up, or the back-and-forth salary expectations.
Instead, she can turn her attention to discussing more meaningful topics: the skills needed for the job, what a day-to-day job looks like, how the company plans to grow.
Compensation range disclosure is especially useful for younger professionals with less knowledge of the market and for tenured employees whose pay hasn’t kept pace with the pandemic wage increases for new hires, she said.
Job seekers say employers’ fear of losing applicants is overblown
Many businesses opposing the new law say if they are required to list their salary ranges, competitors can outbid them and poach talent, especially in today’s tight market. Another challenge: If an SME cannot pay the highest market price, no one will want to apply for its vacancies.
Job seekers say those concerns are overblown.
While wages are certainly an important part of a job, it’s not the only one. Even if the salary listed was lower than they expected, “I’m still applying,” Ramirez said.
Ramirez also wanted to learn about the company’s culture, diversity efforts, philanthropic commitment and “what really makes it a good place to work.” They reason, at least they’ll know what they’re doing.
Cascella said she also wouldn’t rule out the opportunity for her lower salary expectations if the company could make up for it in other ways, such as offering good health insurance or an attractive work environment.
That being said, she does think that if an employer sees it losing qualified applicants and learns that low wages are the biggest problem, it will force the company to re-examine how it evaluates and compensates employees.
Rawal believes businesses shouldn’t be concerned about the decline in eligible applicants. Conversely, if a candidate’s salary demands are too high, “any application they get will be their target audience. It saves them time instead of going through a million unsolvable resumes”.
Businesses should pay more attention to how opacity allows them to compete with job applicants, she said. According to Monster.com, some 61% of employees say salary is their top consideration when looking for a new job, while 53% would decline a job application without knowing the salary range.
“The lack of transparency might make me reconsider if I want to apply to the company or the job itself,” Laval said.
Salary ranges are a start, but not a “magic bullet” for closing the pay gap
Job seekers agree that employers’ increased wage transparency is a move In the right direction, but don’t say it can close the wage gap on its own.
“It’s a good step, but I don’t think it’s a panacea for closing the wage gap,” Casella said. There are still many ways in which gender and racial bias can seep into the hiring process: “I still think that in some cases, if a person is applying, maybe they’re only going to offer him the high end of that range,” she added.
Job seekers still need to prepare salary research and negotiate their worth, “but at least when they know what the range is, they’ll have more bargaining chips.”
LaVar said that if employers posted really wide ranges, it could be difficult. Employers covered by New York City law must include the “good faith” salary range they can actually offer new employees.
Experts say listing salary ranges can empower new hires, but a more important impact of the law is that when preparing for it, businesses will be forced to consolidate their compensation plans with equity as a primary consideration, says Tony Guadagni , Senior Principal Gartner Research.
Experts and workers agree that the onus on closing the pay gap lies with employers to pay wages fairly, not just for candidates to negotiate for the top pay.
Expect conflict and discomfort: ‘This is how we achieve fairness’
Workers also say wage disclosure laws can lead to conflict: One in five workers worry that wage disclosure could lead to tensions among colleagues, according to Monster.com.
But Ramirez said it could be a necessary source of discomfort, if only to normalize talk of wages, not just among underrepresented workers, but with the ability to leverage their position in the workplace for greater Fairly dominant group (usually cisgender whites).
Cascella hopes the law will push companies to be more strategic and fair in their overall compensation strategy, especially if those on the lower end of the spectrum feel they’re not getting the quality candidates they expect. “I’m sure they’ll see who’s applying and who’s not applying, and if they’re currently underpaid, they might change their ways,” she said.
She wants to see workers put employers on task after the data: She’s ready for people to ask questions on social media about being paid less compared to new hires, or being hired at the same time as their peers but making less money .
People will be unhappy for many reasons, and it will ultimately be positive “for the greater good,” Cascella added. It’s uncomfortable, “but that’s how we achieve fairness — put it out there and expect uncomfortable moments.”
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