In recent years, discussing compensation has shifted from taboo to commonplace, with individuals openly sharing salary or hourly rate information among friends and colleagues. This shift reflects a growing desire for fairness in compensation, as individuals want to know if they are being paid equitably for the work they perform. The persistence of pay gaps across different demographics — such as gender, race and ethnicity — has raised concerns about fairness in compensation. For example, women in the US earn, on average, only 84% of what men earn for full-time, year-round work.  

Pay transparency, the practice of sharing compensation information publicly and internally, has emerged as a tool to address these disparities and promote workplace fairness.

Pay Transparency Laws

Several states and localities have introduced pay transparency laws over the past few years. While the specific requirements vary depending on the jurisdiction, these laws generally aim to promote equity and fairness by ensuring that employees are aware of the pay scale for various positions. Some states mandate that employers include pay information in job postings or disclose it during interviews, while others require that pay details be provided to applicants upon request.  

The growing trend of remote work adds another level of complexity when complying with differing state laws. Some states require pay scales to be disclosed if a position could be performed remotely in that state. For example, the pay scale must be included in the job posting if the position is either in California or could be filled by a remote worker living in California, regardless of where the company might be based.  

For contingent workforce programs, collaboration between the organization and staffing providers is key to ensuring compliance with pay transparency laws. While pay transparency laws are not universal, the trend toward pay disclosure is increasing. As a result, organizations and their staffing providers must communicate effectively, particularly regarding positions that may be remote but are subject to state-specific requirements for pay disclosure. Many employers are opting to disclose pay details in all job postings regardless of location, ensuring they adhere to the laws in various regions. This practice may help simplify the hiring process and avoid issues that could arise from failing to meet jurisdiction-specific requirements.

The Importance of Compliance with Pay Transparency Laws

While there are several potential benefits to embracing pay transparency within contingent management, such as enhanced clarity in the hiring process, compliance with applicable laws is the most critical aspect for the organizations using the talent and their staffing providers. Disclosing compensation details in accordance with state and local laws and regulations ensures that organizations stay on the right side of the law, avoiding legal risks and potential penalties. Noncompliance can lead to legal consequences including fines or other collateral consequences such as reputational damage.  

Compliance is not just a legal necessity but also a strategic move for fostering trust and transparency with job seekers.

In industries where staffing agencies and employers collaborate to match candidates with positions, ensuring compliance with pay transparency laws is crucial to maintaining efficiency and fairness. Compliance can help streamline the hiring process. Without clear communication about salary expectations and compensation, both parties risk wasting time on candidates who may not find the offer acceptable.  

Contingent programs and their staffing providers both play crucial roles in complying with pay transparency laws. By collaborating closely to disclose compensation details where required, both can help foster a more efficient and compliant hiring process. Hiring organizations are responsible for ensuring that they meet legal requirements and maintain competitive and fair compensation practices. This partnership between staffing providers and their clients can help navigate the complexities of pay transparency while ensuring compliance and fairness in compensation decisions.

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