Pay Transparency: What the New Laws Mean for Recruiters

Posted by Doximity TF Team

Pay_Transparency_LawsAchieving pay equity in the workplace has been an evolving topic at the federal and local levels. New pay transparency laws have been implemented or are pending legislation in several states and localities. How will this affect your recruitment for facilities in a state with salary transparency laws? We’ll break down key points about salary transparency requirements here.  

#1 - What are pay transparency and pay equity, and how are they different? “Pay transparency” and “pay equity” are often used interchangeably, but there is a difference. According to ADP, pay transparency is the practice of making employee compensation figures visible to others — internally, externally or both. According to the Society for Human Resource Management (SHRM), pay equity generally means compensating employees the same when they perform the same or similar job duties while accounting for other factors, such as their experience level, job performance, and tenure with their employer.  

#2 - States and localities with wage transparency laws already in place as of January 2023 (according to Bloomberg Law) include:

  • States: California, Colorado, Connecticut, Maryland, New York, Nevada, Rhode Island, Washington
  • Cities and Counties: Cincinnati, Ohio; Toledo, Ohio; Jersey City, New Jersey; Ithaca, New York; New York City, New York; Westchester County, New York
  • Pay transparency legislation is pending in Massachusetts and South Carolina.
    Here’s a list with more detail about the new salary transparency laws going into effect in 2023.

#3 - Pay transparency laws that require employers to post a salary range vary from state to state and within cities and counties. Here are two examples, also from Bloomberg Law

  • In California, employers with 15 or more employees must include a pay scale for external job postings for applicants who are not current employees. This includes listings on the employer’s hiring page and advertisements provided on third-party websites like Glassdoor or LinkedIn. California’s law also contains recordkeeping and reporting requirements. Employers must maintain a record of job titles and wage history during each employee’s employment and three years after termination.
  • In New York, a salary transparency law takes effect in September 2023. Employers with four or more employees must list salary ranges for all advertised positions. This applies to any job, promotion, or transfer opportunity that can or will be performed, at least in part, in New York. The bill also requires employers to maintain records of pay ranges for advertised positions as those ranges change over time and maintain job descriptions for such positions.  

#4 - Most laws allow you to post a salary range, but it’s not as simple as just throwing out a number. New York’s law, for example, requires employers to post a “good faith” salary range in job postings and information about promotions and transfers. Per New York’s law, employers must include minimum and maximum salaries; the range cannot be open-ended. For example, “$15 per hour and up” or “maximum $50,000 per year” would not be consistent with the new requirements, according to a New York pay transparency law fact sheet.

The new laws are intended to ensure candidates are given enough information to know whether or not a salary range is a right fit for them. A lack of clarity – including an unrealistic salary range – will likely tell physicians you’re not making an effort to be transparent. By posting an accurate salary range, you can honor salary transparency and still be flexible with your ultimate offer.

#5 - Pay transparency comes with benefits, including increased trust from candidates. According to the
CBS News report, pay transparency will help candidates “understand what their expectations should be, where (salary) boundaries are, and where there might be flexibility.” Lexi Clark, vice president of people at Payscale, says, “it levels the playing field between employers and candidates to have a more open and transparent conversation.” She also said, “higher pay transparency also decreases the likelihood that employees will seek a new job, painting a picture of what organizations can do to reduce turnover and increase retention.”

Pay transparency won't eliminate salary negotiation. According to research from Payscale, pay transparency may encourage discussions of current and future pay expectations. Also, organizations that are more open about salaries often have a well-defined compensation structure and are less likely to have pay inequities. 

At Doximity, we encourage pay transparency that empowers physicians. That’s why we offer an incentive to recruiters using Talent Finder to include estimated compensation in jobs sent via DocMails. To learn more about our platform, we invite you to grab a demo!  

Helping physicians be more productive, so they can provide better care for patients includes building trust. Our 2023 Physician Compensation Report also provides doctors with the information they need to make important career decisions. Join our April 18, 2023, webinar for a deep dive into the report. 

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Topics: physician recruitment tips, pay transparency laws

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