Ask a Resourceful Human: How can I prepare my company for pay transparency?

Welcome to our regular HR advice column, Ask a Resourceful Human. Here to answer all of your burning questions is Erin Grau, the co-founder and COO of Charter, a media and services company that aims to transform the workplace. Erin has over 15 years of experience at the intersection of talent and operations in global organizations and startups, including the New York Times and Away. You can sign up for the free Charter newsletter about the future of work here.

NYC’s pay transparency law goes into effect on November 1. With just one week to go, you may be wondering: What more can I do to prepare my company?

Let’s take a step back: When New York City’s pay transparency law takes effect, it will become the biggest US city to require that employers (with at least four employees) include minimum and maximum salaries or hourly pay in all job postings, joining states such as Colorado, and municipalities including Jersey City, New Jersey, and Ithaca, New York. When similar laws go into effect in Washington State and California in January 2023, about one-fifth of all US workers will be covered by some form of pay transparency legislation.

Preparing for pay transparency is, of course, a multi-step process, not to mention one that can’t be done overnight. But once you’ve set an equitable pay structure and conferred with leaders throughout your organization, as HR Brew reported earlier this month, there are a couple of steps you can take to effectively communicate it to future and current employees alike.

Audit all active job postings and update templates to include a specific salary range, with minimum and maximum pay. You might also want to include:

• Your compensation philosophy: Contextualize the salary range by sharing the factors (i.e., experience, responsibilities, key competencies, etc.) that are used to determine pay.
• Your interview process: If the salary range is for multiple levels of a position, note that and share how a candidate will be evaluated and placed in the appropriate level during the interview process.
• Your benefits: Even if you don’t plan on recruiting in a jurisdiction like Colorado, which requires employers to include perks such as stipends, bonuses, 401(k) programs, and insurance plans in job postings, you might consider adding them. Job descriptions are often a candidate’s first impression of a company, and sharing more about total compensation can communicate company values of transparency and fairness.

Communicate the new law to NYC-based employees, along with your plans to comply. You’ll want to:

• Be consistent: Ensure everyone receives the same message.
• Educate: Help employees understand the company’s compensation philosophy, including career levels, salary bands, and evaluation and merit cycles. And don’t forget to bring managers up to speed: They are your greatest asset when it comes to providing employees specific information, advice, and support. Prepare your leaders to talk about compensation with resources like manager-only forums, FAQs and fact sheets, and even role-playing opportunities.
• Create an open-door policy: Create time and space (like office hours) for employees to ask questions about compensation to HR, their manager, and executives.

“Compensation needs to be an ongoing conversation that you have, just like performance is an ongoing conversation,” Ashley Brounstein, OpenComp’s senior director of people, told my colleague, Michelle Peng, for her “Get Your Organization Ready for Pay Transparency” guide. “The more that you have conversations on compensation, the easier they become.”—EG

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