It's the new year! And that means changes in employment legislation that could affect your business.
By Genni Burkhart
Last year, three states followed Colorado and New York's lead by adopting laws targeting income inequality in the workplace through transparent pay disclosure during the hiring process. Those laws went into effect on January 1, 2023. However, a recent report by Syndio, a leading workplace equity analytics platform, states that two-thirds of companies aren't prepared to comply. But there is good news – becoming compliant with pay transparency can benefit you and your staff, regardless of your location across the U.S.
In part one on this issue, we'll review the transparency of the new disclosure laws that take effect in 2023 and how they can impact your business. In a part two follow-up, DOCS Education's Regulatory Counsel, J. Kathleen Marcus, Esq, will provide an in-depth legal analysis of pay transparency and the law as it relates directly to employers.
Pay Transparency is Essential in 2023
With remote work, the Great Resignation, and today's tight job market, salary transparency has become increasingly relevant for employees. Gartner's June 2022 survey of over 3,600 people found that 66% of job seekers expect salaries to be included in job descriptions and see companies that don't have wages in the job description as being "less fair. (1)"
Companies have had ample warning that this is the job market's direction. The movement to increase salary transparency gained further momentum during the pandemic, with Colorado enacting new laws targeting pay disclosure in 2021 and New York in 2022. Salary transparency remains incredibly popular among employees, and economists claim they're essential in closing the gender and racial wage gaps.
While salary can be an awkward topic, a recent Monster poll found that 98% of job seekers believe employers should disclose salary ranges in their job postings, and 53% wouldn't apply for a job that doesn't reveal the salary range. Additionally, Monster's Future of Work Survey found that salary protection and fair compensation were the top factors driving career decisions.
New Year, New Laws
At the time of this article, several jurisdictions in the U.S. have some form of pay transparency laws in place. The states with new laws that take effect on January 1, 2023, are California, Rhode Island, and Washington. However, pay transparency laws can differ vastly between jurisdictions and within states. For example, New Jersey doesn't have pay transparency laws in effect. Still, in Jersey City, there's an ordinance requiring employers to disclose job salary ranges and benefits.
Here's a breakdown of pay transparency laws taking effect on January 1, 2023:
- California: Employers with 15 or more employees must list salary ranges when posting job listings on their hiring page or a third-party website. Businesses must also provide current employees with their pay scale upon request. Home to 19 million workers and 200,000 employers(2), California is now the largest state to enact pay transparency laws.
- Rhode Island: Businesses must provide pay ranges to job applicants upon request. Furthermore, employers must disclose the full range of pay before discussing compensation with candidates, when an offer is made, and when employees move into a new position, or upon request for their current position(2).
- Washington: Under Washington's Equal Pay and Opportunities Act, employers with 15 or more employees must disclose the pay range and all benefits plus any other compensation for a job when listed. This includes healthcare, retirement, paid leave, and any benefits reported for federal tax purposes.
How Pay Disclosure Impacts You
There's fierce competition in attracting top talent in the dental profession. From dentists to hygienists to key office roles that keep your practice running smoothly, the demand for dental professionals has steadily risen due to patient demand and increased spending from the government, private insurance, and out-of-pocket sources.
Pay transparency is vital in attracting and retaining talent in dentistry. In addition, employees - particularly younger ones - may leave a company sooner if the process isn't transparent, according to PayScale. Furthermore, companies that do not comply with relevant transparency and compliance standards could face significant legal penalties.
One needs to look no further than BBC and Google to see the reputational (and financial) damage pay inequality can have on companies. While your practice may pale in size when compared to those behemoths, the impact pay transparency can have on your business is of no less significance. Pay transparency may also have some short-term but significant benefits for employees and employers. For example, transparency in pay has been found to boost employees' satisfaction, trust, and job performance(3).
Is Your Practice Competitive and Compliant?
According to analysts at Payscale, approximately 1 in 4 workers will fall under state or local laws that require pay transparency by employers in 2023. So no matter where you live, your state (or local jurisdiction) may have pay transparency laws pending, already in place, or on the way.
Salary transparency requirements are driven by the job market and can be viewed as a plus for employers and employees. However, businesses must adequately navigate federal, state, and local jurisdictions to remain competitive and compliant with pay transparency laws.
DOCS Education's Regulatory Counsel, J. Kathleen Marcus, Esq, is available to assist members by email at [email protected] with legal questions on this topic and will provide a follow-up article on this issue in an upcoming Incisor article.
If you still need to become a DOCS Education member, you're invited to join our community of dentists at the forefront of the profession by clicking here. As your regulatory "safety net," having access to J. Kathleen Marcus Esq. more than justifies the modest annual membership fee.
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Author: With over 13 years as a published journalist, editor, and writer Genni Burkhart's career has spanned politics, healthcare, law, business finance, technology, and news. She resides on the western shores of the idyllic Puget Sound, where she works as the Editor in Chief for the Incisor at DOCS Education out of Seattle, WA.
References:
- Liu, Jennifer (2022, August 31) 'It's about fairness and respect': California may get a new salary transparency law soon. CNBC Make it. https://www.cnbc.com/2022/08/31/california-may-get-new-salary-transparency-law-soon.html
- Lui, Jennifer (2022, December 29) Here are all the new salary transparency laws going into effect in 2023. CNBC Make it. https://www.cnbc.com/2022/12/29/new-salary-transparency-laws-going-into-effect-in-2023.html
- Leon Lam, Bonnie Hayden Cheng, Peter Bamberger, and Man-Nok Wong (2022, August 12) Research: The Unintended Consequences of Pay Transparency. Harvard Business Review. https://hbr.org/2022/08/research-the-unintended-consequences-of-pay-transparency
