With pay transparency laws now in effect for California, organizations are making changes to well-established but now antiquated hiring and pay management processes.
Not to be confused with bans on asking salary history in the hiring process, pay transparency is about communicating the pay range for a job position to applicants and employees. Specifically in the case of California Assembly Bill 168, “an employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.” Accordingly, organizations will need to ensure that they deliver their employee value proposition in a consistent manner, delivering the same message to candidates and employees on pay (in addition to benefits, careers, etc.).
Employers will need to take an integrated approach to responding to pay transparency requirements alongside salary history bans to comply with both effectively. Here are three steps they can take to prepare:
Just as fair pay and salary history ban laws have now been enacted across the United States, some expect that pay transparency laws will likely be legislated beyond California. Accordingly, employers are implementing changes nationally – and even internationally – to prepare.
In addition to the three immediate steps we’ve outlined here, every HR function needs to make sure they are able to manage and maintain their organization's employee value proposition. With factors such as the introduction of artificial intelligence in recruiting and use of predictive analytics in workforce management, it is time for pay management to catch up.
Has your company taken any steps toward pay transparency yet? Join the conversation on LinkedIn.