Andrea Johnson, Director of State Policy, Workplace Justice & Cross-Cutting Initiatives National Women’s Law Center
In SUPPORT of HB 6273
Before the Connecticut Committee on Labor and Public Employees
February 6, 2023
Thank you for the opportunity to submit this testimony on behalf of the National Women’s Law Center. NWLC has been working since 1972 to help women and families achieve economic security. We work closely with state policymakers across the country to strengthen laws for closing gender and racial wage gaps.
Pay transparency has been identified as a leading tool for closing gender and racial wage gaps. Connecticut took an important step towards greater pay transparency in 2021 by requiring in Public Act No. 21-30 that employers provide job applicants the pay range for a position at some point prior to discussing compensation or upon request.
HB 6273 makes the requirement in Public Act No. 21-30 clearer and more effective for employers and employees alike by specifically requiring employers to include pay ranges in job announcements.
I. Pay range posting laws are sweeping the country
Since Connecticut passed its original pay range transparency law, a rapidly growing chorus of states and localities have passed laws specifically requiring pay ranges be included in job postings: New York, Colorado, Washington, California, New York City, Ithaca, NY; Westchester County, NY; and Jersey City, NJ.
We are seeing pay range posting laws take off across the country not just because transparency is shown to help close gender and racial wage gaps, but because employers and lawmakers are seeing how including pay ranges in job postings helps businesses attract and retain talent and more efficiently and effectively hire.
Connecticut businesses are already accustomed to having to provide job applicants pay ranges for a position under current law (Public Act No. 21-30). But Connecticut’s current law doesn’t provide employers with the recruiting edge, cost savings, or other efficiency gains that come when employers must include pay ranges in job announcements. Nor does it create as strong of employer accountability for paying employees fairly. HB 6273 will change that.
II. Including pay ranges in job announcements gives business a competitive edge
More and more employers have begun to include pay ranges in their job postings, as doing so helps them attract talent and stay competitive. Indeed, according to a recent Glassdoor survey, nearly 2 in 3 employees prefer to work at a company that discloses pay information over one that does not. Workers are consistently demanding pay transparency, with a recent Monster.com survey showing that 98% of workers say employers should share salary ranges in job postings. And more than half (53%) responded they would refuse to even apply for a job that does not disclose the salary range.
Including pay ranges in job announcements also helps employers avoid wasting time interviewing someone who would not accept the position because the pay is too low. It can also help reduce online recruiting costs. We’ve heard from smaller businesses who don’t have an HR team that it is crucial for them to include pay ranges in job postings as the resources and time they have available to hire is limited. Pay transparency also promotes employee trust, loyalty and productivity, which is good for employers’ bottom line.
Colorado, the first state to pass a salary range transparency law, saw a high rate of compliance among its 50 largest employers right after the law’s passage and nearly two years after, 99% of employers are in compliance. A study analyzing the impact of Colorado’s salary range transparency law found that, on average, the state experienced a greater increase in its labor force participation rate than Utah, a neighboring state with similar economic and demographic characteristics.
Unfortunately, many employers, especially in the private sector, are still not transparent about how much a position pays. Even if they haven’t established formal pay ranges for particular roles, employers usually budget a general amount or range for the position for which they are hiring. Pay range transparency laws simply ask employers to share that information with applicants. Already, according to a PayScale survey, 86% of surveyed employers have a compensation structure in place or are working to develop one and around 68% of respondents stated they share their salary ranges with current employees, demonstrating that pay range transparency is possible.
III. Pay transparency helps close gender and racial wage gaps
We all want to feel confident that we are being paid fairly. But when an employer doesn’t provide job applicants or employees the pay range for positions, women lose out. For example, research shows that pay negotiations are notoriously unfavorable to women: Women who negotiate are perceived as greedy and not team players; relatedly, because women are typically coming from roles where they are paid less, women often ask for less than their equally qualified male counterparts. Fortunately, research shows that when job applicants are clearly informed about the context for negotiations, including the pay range, gender gaps in negotiations diminish, which could help narrow gender wage gaps.
Being required to post pay ranges also prompts employers to proactively review and evaluate their compensation practices and address any unjustified disparities between employees.
An emerging line of research points to a reduction in gender pay gaps and increased wages for women after states and/or employers have enacted pay transparency policies. The much narrower wage gaps in unionized and public sector positions where pay structures are typically transparent provide further evidence that greater pay transparency helps reduce wage disparities.
We urge the members of this Committee to show up for Connecticut working people and businesses by supporting H.B. 6273.