Pay transparency is a vital aspect of achieving pay equity and reducing disparities in the workplace, with legislation in New York and California leading the way in this effort. Both states have recently passed laws to increase pay transparency, and employers should be aware of these laws and take steps to comply with them. Soon additional states will follow.
In California, the Fair Pay Act, which was signed into law in 2015, requires employers to provide equal pay for “substantially similar work.” This means that if an employee is being paid less than someone else for doing the same job, they have the right to ask their employer why. The law applies to all protected classes including race, ethnicity, sex, and sexual orientation, among others. Additionally, the law prohibits employers from retaliating against employees who ask about or disclose their pay. This means that employers cannot fire, demote, or in any way discriminate against employees for inquiring about or disclosing their pay.
New York State has taken similar steps to increase pay transparency with the introduction of the “New York State Pay Transparency law” which became effective on Jan. 6, 2021. This law makes it illegal for employers to prohibit employees from discussing their pay with others. Employers must also provide pay scales to candidates upon request. This means that employers must provide the candidate with the salary range for the position for which the candidate is being considered. Employers also cannot take adverse action against an employee for discussing or disclosing their pay.
Both of these laws are a step forward in the fight for pay equity and can help to reduce pay disparities between different groups of workers. Employers should be aware of these laws and take steps to comply with them. This includes regularly reviewing and updating their pay practices to ensure they are in compliance with the law, and also providing training to management and human resources staff to ensure they understand the laws and how to apply them.
For employees, it is a good idea to familiarize yourself with the laws and know your rights when it comes to discussing and disclosing your pay. The new pay rate transparency laws in New York and California are important steps towards achieving pay equity and reducing disparities particularly among women and people of color. If you are in New York or California, we would like to hear how these laws have impacted you, either as an employee or employer.
Our Managing Director, Kevin Haweny can be reached at khaweny@entechnetworks.com or by phone, 954-340-5775 ext. 204. It is our belief that this transparency, especially regarding compensation will have a positive effect on reducing turnover within organizations and create a happier, more productive workforce.
