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Pay transparency: How ending the secrecy could erase inequities and change the workplace

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Jacob Walsh
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CITY/WXXI

In her almost 20-year career as a nurse and nurse practitioner, Celia McIntosh applied for many jobs with no idea about what the starting pay range was.

She found it frustrating and a waste of her time.

"Because you don't know that, you go through multiple interviews only to find out that you get the offer later and you're overqualified," McIntosh said.

She said when a salary range was published in a job listing, it was sometimes far too broad.

"It may be anywhere from like, $55,000 to $120,000. How do you even know what's realistic?" asked McIntosh, vice president of the Rochester Black Nurses' Association.

That's a question Hannah Morgan hears from job-seekers all the time.

Morgan is a job search strategist who works with people who are competing for new positions.

She said the first question they're usually asked on a job application or in an interview is: 'What are your salary requirements?'

"People often give a number and that ends the interview right there," Morgan said. "Because they don't know. What number do I put in there? Do I put in the high number? Do I put the low number in?"

She said employers who are secretive about what they're willing to pay do this because it gives them more control and power.

"It wasn't to attract the best candidates," Morgan said. "It was, 'How can we get the best person in here and pay them the least amount of money?'"

Advocates of pay transparency say if the cloak of secrecy around pay is lifted, it could help address longtime inequities in the workplace.

Under a proposed law in the state Senate, New York could become the next state to require employers to disclose information about pay and benefits in job listings and to their current employees.

Some say the lack of that knowledge sets people up to be underpaid throughout their careers, especially women and minorities.

Even though the pay gap is narrowing, women still earn just 82 cents for every dollar a man earns, according to the latest data from the U.S. Department of Labor.

 Democratic state Sen. Samra Brouk represents New York's 55th District and is chair of the committee on mental health.
Provided
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Sen. Samra Brouk.

The gap is even wider for women of color — and higher education isn't enough to close it. Black and Latina women with only a bachelor’s degree have the largest pay gap at 65%.

Black women with advanced degrees make 70% of what white men with advanced degrees are paid.

This was a lived experience of Samra Brouk before she became a New York state senator.

When Brouk, who is Black, was working in environmental education, she discovered that a white male colleague with the same job made $10,000 more a year than she did.

"That's a really, really harsh reality to learn that someone who you thought of as your equal, as your partner in this work somehow had been valued higher than you had," she said.

Brouk said she advocated for herself, and her supervisor gave her a raise and a promotion.

A decade later, she wants to take the onus off of individual workers. The Democrat is co-sponsoring New York's pay transparency bill, which has yet to reach the floor of the Senate.

New York City is enacting a similar law in May, and six or seven other states also require employers to divulge details about pay, but some only mandate this when a job applicant makes a request.

In the public sector, most government agencies use paygrade formulas, and that information is readily available. But it's much less common in the private sector.

In a 2021 Salary.com survey, just over a third of HR professionals said their company supported pay transparency.

If New York enacts such a law, Brouk thinks it could also lead to a cultural shift, making it easier for people to negotiate salaries and talk about pay with their coworkers.

"Because right now," she said, "I think we have put such a faux pas on talking about wage, on about talking about salary."

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Technical support engineer Frank Gori says some of his past employers have discouraged talk of pay in the workplace.

Beyond the discomfort some people feel with money conversations, leaders in some workplaces try to silence their employees on the subject altogether.

Frank Gori, a technical support engineer, said he's worked for multiple companies that have actively discouraged any open discussion among employees about salary.

"When they give you a raise they say, 'Hey, you may be making more than your colleagues. Can you please not brag or advertise that?'"

Gori has worked with his current employer for about nine months and said he's already talked money with two or three coworkers, but he treads lightly.

"I definitely know people who are weird about it," Gori said, so he makes sure he gets to know a colleague before broaching the subject.

"I just like to know where I stand among my peers," he added.

Attitudes around this have changed significantly in the past few years, according to Beth Cordello, chair of the labor and employment practice group at Pullano & Farrow in Rochester.

Cordello said many people are unaware of their rights under the National Labor Relations Act of 1935, which states that employees cannot be prohibited from discussing wages.

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James Brown
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WXXI file photo
Employment attorney Beth Cordello.

"I would say up until maybe five to seven years ago, it was very common to have policies in place where employees were absolutely prohibited from telling anybody what they make, and they would get disciplined or fired for discussing it." she said.

Proponents of pay transparency requirements say secrecy around compensation always benefits the employer and keeps the employee at a disadvantage.

Scott Ensign, vice president of strategy and partnerships at Butler/Till, agrees that transparency is a good thing, but the marketing agency generally doesn't mention any pay ranges in its job ads.

"It's not that we don't want to post salary ranges or we think it's a bad thing," Ensign explained. "We just don't want to exclude candidates."

Part of the reason has to do with how the COVID-19 pandemic has revolutionized the workforce. About 20% to 25% of Butler/Till's employees are working remotely throughout the U.S., and Ensign said pay can vary dramatically by location.

"If we have a fully remote position, that salary range could look very different for someone in New York City versus someone in Boise, Idaho, versus someone in Dallas," Ensign said.

Despite its potential complications and imperfections, Brouk's Democratic colleague, Sen. Jeremy Cooney thinks the time for pay transparency has arrived as so many employers are trying to lure employees.

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Gino Fanelli
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CITY file photo
Sen. Jeremy Cooney.

"We just want to make sure they're going into an equitable work environment," Cooney said.

In a 2016 article in the Harvard Business Review, University of Utah business professor Todd Zenger wrote that broadcasting pay rates was just as likely to demoralize employees as it was to motivate them.

Zenger argued that while pay transparency may help remedy pay discrimination, such policies may also result in companies flattening pay rates, cutting back on incentives, and basing monetary rewards on seniority or position, rather than performance.

Cordello can see how a well-intentioned policy could tie an employer's hands.

"When they want to reward an outstanding performer, somebody who's really hitting it out of the park, they want that person's pay to reflect that," she said, "but if (that is) outside what they've established as their pay band, they won't be able to do it."

Cooney said his office hasn't received any formal opposition to the pay transparency bill — and that surprised him, given the pressure businesses and organizations have already been under to comply with a host of mandates during the COVID-19 pandemic.

"This could be construed as another mandate," Cooney said.

But in the end, he thinks most people would accept the policy as a reasonable attempt to correct a systemic issue of pay inequity.

"I'd like to think that the free will of people in this state would create a more equitable environment," he said. "But sometimes you need a little push; sometimes you need an incentive to do the right thing."

With new leadership at the state level, including a female governor and Senate majority leader, Cooney believes New York has a chance to lead on an issue that has plagued women in their careers for far too long.