Pay transparency laws have been passed in places like New York and Colorado where employers are required to list the pay range in job descriptions. But some companies are trying to limit the demands of potential hires seeking top pay. This looks like salary range deflation and workplace experts are worried about its future impact on workers.
“It has come up a lot,” said Melanie Naranjo, vice president of people at Ethena, a New York-based compliance training platform in an interview with the LA Times. “Part of the challenge here is that pay transparency is new, so there is this fear among HR people about this new information, that people will not understand it. So the feeling is, ‘Let’s help cushion this, so we are not pressured.’ Do I think it’s the right approach? No.”
Lowball salary ranges are being listed to guide how much prospective applicants ask for during the interview and/or offer process.
“There are companies intentionally posting salary ranges below their actual salary bands for job seekers,” said Jamie Coakley, senior vice president of people at Electric, which provides remote information technology services for small- and medium-sized businesses. “It’s a risky choice that is not in good faith of what the salary will be, which is the entire purpose of the law.”
“Employees are not stupid,” said Naranjo. “What will happen for those employers [who lowball ranges], is that employees are going to take the job offer and then say ‘Wait, there’s actually a different salary band?’ And then you erode trust.”