How pay transparency may affect your job search or raise

So far, nearly a dozen states and municipalities have mandated access to salary information, including California, Colorado, Washington, and New York City. Companies in their jurisdiction are usually required to submit salary ranges showing minimum and maximum wages. Rules vary: sometimes only job applicants should be told, other times current employees may also request information on salary ranges.

Roberta Matuson, president of Matuson Consulting in Boston, consults with companies seeking top talent. She believes fee transparency is “a step in the right direction”.

“Knowledge is power. So if you have no idea you can make more money, then you don’t even want it,” Matuson says.

Lexi Clarke, vice president of people at Payscale, a national provider of wage data and services, says that pay transparency will not eliminate salary negotiation. Instead, Clarke says, it will encourage discussion of current and future wage expectations.

It will help employees and candidates “understand what their expectations should be and where the (salary) limits are and where there can be flexibility. It levels the playing field between employers and candidates to have a more open and transparent conversation,” he says.

Payscale’s senior corporate attorney, Lulu Seikaly, notes that current law does not prevent employers from offering wages higher than an advertised range for a position, as long as the company can provide an objective justification for the exception.

Seikaly says that in the past, companies often based their salary offers on what an individual earned in their previous job. “Many states have now banned it.”

If a potential employer were to ask about your salary history, Matuson replied, “I wouldn’t refuse to answer; I would say, ‘Tell me what you offered me for this position.’ I would just reverse the question.”

Pay transparency reveals pay gaps, but does gender and ethnicity narrow pay gaps? It may be too early to tell.

However, Payscale’s Clarke says organizations that are more open about salaries often have a well-defined pay structure and are less likely to have pay disparities.

He estimates how the gender pay gap could narrow: “Women’s wages will rise to where they should be – some overpaid men’s wages may drop slightly to better fit where they need to be.”

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