The New Salary Transparency Law: How to Navigate the Conversations and Conflicts it Brings in the WorkplaceMar 09, 2023
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In our world, pay disclosure laws usher in a new era of workplace transparency. Our salaries are no longer kept secret, forcing us to negotiate in the dark for a fair wage. Employers are forced to disclose their wages, and workers are also starting to announce their earnings. They do this through anonymous spreadsheets, on Glassdoor, and, even more radically, in conversations with colleagues and friends among the new generation of employees. A Salary Transparency Act that requires employers to disclose salary ranges in job advertisements or for job offers and promotions has been introduced.
What is the Salary Transparency Law?
The new Wage Transparency Act now requires all state(s) employers to report their workers' salaries publicly. This law also addresses some of the issues of pay secrecy by requiring employers to disclose their pay ranges and bonuses and any team member raises or promotions.
However, in several federal states, salary disclosure is not automatic. In California, Connecticut, Maryland, Rhode Island, and Washington State, jobseekers can only get salary information "on request." Nevada and Colorado are outliers. In both conditions, companies must automatically provide this information. In Nevada, after the applicant has completed the interview, and even earlier in Colorado, companies that are hiring in Colorado must disclose the salary range and a brief description of the benefits package in the job posting.
Due to the absence of salary secrecy, unavoidable conversations will come. You must expect them and be prepared to have them.
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How to Navigate Conversations about the New Law
This sort of openness can kickstart workplace conflict among colleagues because some form of inequity can be felt in the organization when salary secrecy is no longer present.
It's essential to be prepared for the conversation, and you can still be ready for some questions. However, we're here to help. You can navigate these conversations using the following steps:
Establish a structure:
The very first thing to do is to create a structure for addressing employees' complaints and issues so that it is easy to solve them without creating disorder. Make it anonymous because it may contain personal problems. It is critical to maintain anonymity when dealing with employee grievances. The issue is kept from spreading by involving as few people as possible. Complaints must be addressed as soon as possible. That is, nothing should be put on hold for an extended time.
Schedule a meeting:
The employee who has the complaint and all other parties involved should be invited to the formal hearing. The employee can present any evidence that supports the complaint (in this case, possibly unequal pay) and explain how they want the situation resolved. You don't have to decide at that moment.
Be respectful of other people's feelings:
It's easy to get caught up in your emotions when talking about this topic with coworkers or employees and forget how they're likely feeling. Asking questions is an important part of getting everyone on board with your ideas—but don't forget what matters most: Respect! When you respect other people’s feelings, you would, to a huge extent, eliminate any friction, negative feelings, and possible conflict.
Keep it professional:
While many conversations may be too heated or emotional for some people at first, keep them professional by refusing to make assumptions. You should also refrain from letting your emotions get in the way of listening carefully and respectfully before speaking up again.
Address the source of the problem:
The goal is to find a long-term solution. That is, a formal complaint should be resolved once and for all. This keeps your staff from returning with the same problem again and again.
The important solution here is to discover the core cause of the problem and ensure that it is solved, with the possibility of adjustments if needed.
Examine the situation:
Taking a step back and evaluating your choices objectively is always a good idea. If it ends with the employee being satisfied with the outcome of the resolution, you did an excellent job of resolving the problem. In reality, it can have a huge impact on your company's culture.
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One more thing: Communicate
In the workplace, communication serves as a barrier against internal conflict. A lot of grievances can be avoided when there is good and prior communication between the organization’s leaders and its employees. Work with your internal communication staff to ensure that employees know the company’s policy regarding pay and wages. Consider arranging office hours or a Q&A session with your HR team for more hands-on support. Consider how well-versed your HR team is in the subject of pay transparency.
Make sure you are open to receiving feedback on your entire incentive plan and how it is communicated. Pay transparency can increase employee trust and be more advantageous to the company when honesty and good communication are present.
While the law has been controversial, it’s clear that employers are going to be required to share their compensation information with their employees. This new information will help employees understand what they're making and how much it is worth compared to other positions in similar organizations. Many other issues can arise when an employer does not disclose salary information, including potential discrimination claims from employees who do not get paid fairly based on gender or ethnicity.
In addition, the law also provides employees with a way to know whether there are any gaps between their wages and those being paid by others within the same company; this could result from unequal pay structures (such as bonuses) or less seniority among workers within an organization's ranking (or even just different functions). Understandably, discussing pay and salary can be awkward. But, in the end, discomfort is only the beginning of a growth journey. It is the initial step toward learning and development. This entails acknowledging when systems fail and committing to bettering ourselves and our companies.
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