NYC companies will have to share job salaries upfront — and it could help close the gender pay gap

• NYC says that companies have to start including salary ranges in job postings this spring.
• Some states have passed pay transparency laws to reduce wage disparities for women and minorities.

Exactly two months from this year's Equal Pay Day, a new pay transparency law will go into effect in New York City — and it could help women and people of color achieve pay equity.

The city has ended the uncertainty for people in its job market by requiring employers to post salary ranges in job listings. Data shows that pay transparency can help people of color and women achieve equal pay, groups that are historically underpaid across industries in comparison to their white and male peers. The new law might also help the current labor shortage, which is causing strain for companies who need workers.

The New York City Council passed the bill in December, and it will go into effect in May. The Council called the current lack of salary transparency "discriminatory and anti-worker."

"Every New Yorker should have the right to determine whether they will be able to support themselves and their family when they apply for a job," said Manhattan Councilwoman Helen Rosenthal, co-sponsor of the bill, in a statement. "It is time to level the playing field, and restore some dignity to New Yorkers seeking employment."

New York City joins Colorado and California, which also enacted umbrella salary transparency legislation recently. Maryland, Washington, and the cities of Toledo and Cincinnati in Ohio have similar pay transparency requirements.

Pay transparency might help women, minorities, and companies in need of workers

The saying goes that it's not polite to talk about money, which is a common workplace practice as well — although younger workers are looking to change that.

Crowdsourced databases, for instance, are becoming increasingly common in fields like journalism, where workers circulate industry spreadsheets featuring pay, benefits, and a person's gender, race, and years of experience in their field.

These networks intend to shrink pay disparities between men and women, and between white people and people of color.

Black men, for instance, are paid just $0.71 for every dollar paid to white men, the Economic Policy Institute reported in 2020.

Black women suffer in particular — according to the National Women's Law Center, it takes the typical Black woman 19 months to make a white man's annual earnings in the US. The EPI found that Black women are paid $0.63 for every dollar paid to white men. That pay gap adds up over time: the NWLC estimates that a Black woman can lose $964,400 over a 40-year career.

Those disparities have recently begun to cost companies. Last February, Google paid $2.6 million to workers over claims that its hiring and pay practices were biased against women and Asian people.

Data shows that openly sharing employee salaries might help close the wage gap. A study published by PayScale in 2020 showed that women who said that pay was transparent at their organizations earned between $1 and $1.01 on average for every $1 men earned at their companies.

Research shows that in addition to reducing discrimination, pay transparency might also help employers hold onto their workers. That's an immediate concern for US companies, as roughly 34.4 million people quit their jobs in the last year, in what some call "the Great Resignation."

A report from beqom found that when employees perceive a pay gap — whether or not that pay gap actually exists — there is a 16% decrease in intent to stay. A UCLA study from 2013 also showed that workers are more productive when salaries are transparent.

"It's really hard to know you're experiencing [pay discrimination] because there is such a culture of secrecy around pay," said Emily Martin, the vice president for education and workplace justice at the National Women's Law Center, told The 19th. "Part of the answer to closing gender wage gaps and racial wage gaps … is greater pay transparency because sunlight is a disinfectant here."