New laws in New York and California require employers to include the salary range of a job in job ads. Theoretically this will help applicants apply for jobs that pay what they’re looking for rather than waste time playing “Guess the pay” before agreeing to interviews. Every law can be gamed. I can see companies posting ranges like $25,000-$100,000. Maybe they really plan to pay no more than $40,000. Do you think there’s any way a salary range law will help us?
Hah — you’re right. If there’s a law about pay, somebody’s going to game it! You actually offer a good example: meaninglessly broad salary ranges. Who’s going to police that?
What’s the story on salary range law?
Proponents of salary range laws say employers have been getting away with underpaying workers. Disclosure of salaries in job postings will supposedly fix that and bring fairness to hiring practices. (New York Times)
SHRM, a professional association for human resources managers, says these laws will cause “salary compression” because employers will be pressured to increase starting salaries so they can fill jobs in a competitive market. And they’ll pay for that by leaving existing employees’ pay stagnant.
Leading Silicon Valley law firm Wilson Sonsini points out that the New York City law permits employers to exclude the value of benefits, bonuses, commissions, equity and other forms of compensation from these disclosures. This creates a lot of leeway around the new requirements, and confusion around salary negotiations.
Will a salary range law help you?
I’m skeptical. I think it depends more on the company you’re dealing with and on how it implements the law, if your state even has a law. It helps to read a variety of reports about these salary range laws, which seem to be spreading across states. (So far, New York City, California, Washington State and Colorado are on the bandwagon.)
I’m more interested in how real job seekers — who experience all sorts of gaming of the employment system — view these new laws.
- Have you been exposed to this yet?
- Has it actually affected you, helping or hurting?
- Are companies playing games with salary range laws?
- How do you think this will affect your job-search experiences?
There’s no good answer about whether or how this will benefit job seekers. Penalties for failure to post salary ranges are up to $250,000. However, it seems that as long as an employer publishes a salary range, it is free to pay more or less than that range. Where does that get us?
Rather than count on the kindness of employers under the law, I think you’re best served by knowing how to negotiate to get the compensation you want.
Have you wasted your time interviewing for jobs that don’t pay enough? Will salary range disclosures be helpful? What kind of salary law would be helpful to job seekers?
While it won’t help you get the salary you want, it can help you avoid employers who want caviar talent at tuna fish sandwich prices. But in my opinion, that’s about all you get. You still have to do all the other stuff you say to do!
I don’t know how it will impact salaries for mid and senior level applicants, but I think it could help entry level folks evaluate their options better. However, for freelancers, I like knowing what the prospective client’s budget is for the job — either by the hour or project. It helps me figure out how much bargaining room there is or whether or not their capacity to pay is so low that I take a pass.
If the employers are trying to game the system, is it possible to ask about the salary ranges of the supervisors of those positions? That would give a more realistic view of what they are trying to pay. Most managers will make more than their immediate employees. If their range is in the range of the employee, chances are the real range of the job seeking is the bottom of the employee range to the bottom of the manager range…
@Greg: Now you’re talkin’. Some may recall that we touched on this in an earlier Q&A:
“Once you know the salary [for the job], at the end of your first interview (assuming you’re still interested in an offer), ask what the last person in that job was paid and how much others on the team are paid. If you’ve already impressed an employer that can’t afford to lose another good candidate, you just might get the information and improve your negotiating position further.”
Why is any salary confidential? Why shouldn’t you ask the boss’s salary? I think putting it all on the table is better for everyone.
The right wing business community will whine about excess government regulation , but of course what they really fear is the next steps, internal and or public disclosure of compensation
Guess what guys, it’s coming. Moreover , competitive companies will welcome it as candidates prospect opportunities at those that pay top shelf
State institutions publicly publish salaries and yet attract good candidates on the triad of career, salary, and benefits. Somehow , they don’t implode because everyone knows what everyone makes, hhmmmmm
@VPSales: Yup! It’s coming. In one of my PDF books, Keep Your Salary Under Wraps,” I share an apocryphal explanation about why employers keep salary information hidden while they insist on knowing an applicant’s complete salary history.
This is a complaint submitted to me by a human resources executive after she read the book:
“Employers want your salary information because they believe that if you apply for a job that starts at $50,000, but you made $30,000 in the same sort of job at your last company, they’d be overpaying. They’d want the opportunity to buy you for $35,000 to start, saving them $15,000. The HR person who does that gets many kudos for their shopping moxie from their boss, and gets to keep their job and go on many more shopping trips. I’ve been a vice president of HR, a recruiter, a labor negotiator and a candidate, so I know from which I speak… I am so dismayed that someone pays you to hand out this kind of information.”
Need anyone say any more? I like to imagine this HR exec being pilloried by her peers at a professional event for blurting out a key secret of the HR world.
>State institutions publicly publish salaries and yet attract good candidates on the triad of career, salary, and benefits.
As someone who’s last job was working for the State, I can tell you why they attract candidates: they offer a good benefits package, many times with a pension fund (one of the last employers to still maintain that), and because it’s state-ran, it’s near-impossible to get fired from. There was an employee who committed battery on the employer’s premises and was still employed. That doesn’t draw good talent, that draws any talent. Their pay ranges are abysmal and that will cause most good talent to go elsewhere.
Even before these laws, I’ve noticed some jobs would still post wide ranges (i.e. $40-$70K) knowing full well they are going to pay on the lower end.
I’ve been approached by some of these companies in the past and have stated my desired salary which was at the top end of these range, specifically because it was more than I was making at the time and it wasn’t what I wanted. Of course, I’d lose out probably because it was easy to find someone qualified that was cheaper.
@David: You’re pointing out how much more important it is to know how much you want than to know what a job pays. You cannot use the latter number effectively in a negotiation unless you establish the first figure for yourself.
Once you know what you want, you can choose the employers and jobs to pursue, with the understanding that you make clear to them, in advance of serious discussions, that you won’t consider less. Sadly, most people will cave on what they want just to get a shot at a job, but they might as well be sticking a drinking straw in a glass of canal water. You have to be willing and ready to walk away from a deal that doesn’t comport with your plans.
If that last bit of advice comports with your job search strategy, this may be helpful:
While I do not see the law as a game-changer, if I discuss a role, I need to know the if relocation is necessary, direct-hire/contract, salary/budget, in-office policy.
As for salary, that helps me gauge if it is even worthwhile to discuss benefits (the full compensation package).
Regardless of professional acquaintance or a cold call, I consider it to everyone’s benefit if I can eliminate roles where I would not accept an offer.
@Gregory: It baffles me. Employers that refuse to disclose a job’s salary range consequently lose good candidates when money becomes the issue after lengthy interviews, then complain there are no qualified people out there that they can hire.
Unfortunately, in our current culture where deceit is held in high regard,I doubt this law will help at all.
It helps junior and midcareer people tremendously. As the saying goes, in negotiations, whoever says the number first is at a disadvantage. I managed to get a 25k+ salary increase from 95k to 118k+5%bonus+ESOP about a year ago because the salary range was disclosed. They had a range (100-130k) when they asked me expectations, I said it would have to be in the upper range for it to make sense for me to leave. If they didn’t have the range, I probably would have said 105 or 110 because that was my best guess of the market (thanks Indeed).
@Pete: Nice work! Funny how, when a company lays it on the table, it has to actually assess you for what you are actually worth to THEM, rather than base that judgment on what your last paycheck was. That’s how you get a bit boost in pay.
I am hopeful that this will help shift certain things I’ve noticed in job postings in the last year or two since this has been a law in Colorado.
Since CA and NY are such powerhouse states, companies hiring remote roles are less likely to exclude them from eligible states for work. Historically I’ve seen remote (US based) roles specify that people from Colorado are not eligible to apply, I assume this is so they do not have to list a salary range. Colorado doesn’t have crazy employment law, and certainly not more strict or difficult to navigate than CA or NY (I’ve lived and worked in both these states as well), so this is the only reason that made sense to me.
Aside from that, I still see employers leave out salary ranges, and frankly I don’t know what the recourse or reporting procedure actually is. There’s so many job postings it seems impossible to enforce in a meaningful way. That said, the vast majority of companies do list salaries, and I would also say in my experience that most post useful ranges as well. Of course you do see some that list useless ranges, but I take that as a good reason not to consider them as my potential next employer.
I hope as more states adopt laws like this, that it stops employers from targeting locations to exclude, and that it helps standardize a better base living wage that is actually livable across the nation.
Agree that the new law could be gamed and questions will remain. However, on a sensitive topic like salary. for which many people have suffered with an utter lack of public information, more transparency is always better than less transparency. The fact that companies have to list something provides a modicum of information for potential and existing employees. If employers in fact provide salaries outside of what they have disclosed, there is at least the potential for them to be called on it by potential and existing employees and other interested watch dogs, which will also make their publication of salary range a point of public credibility for the company.
Like many ill-informed laws enacted, there’s a lot of ‘good intentions’ but we all know what a certain road is paved with. Look at the CAN-SPAM law. It’s so poorly written that it’s trivial to maintain compliance, nearly impossible to enforce non-compliant actors, and shows no sign of change as the people who are actually informed about the industry aren’t consulted, plus it’s not a priority to change for lawmakers because the ones who want it changed for the better are a minor of their constituency.
If it could be re-written with input from actual industry people, it could have a positive gain. But that won’t happen.
Just because the salary ranges can be reported with deception doesn’t mean we shouldn’t have them. Eventually, this can become a selling point for companies who honestly report their salary ranges. Certainly, candidates are more likely to tap companies who honestly report salary ranges than those who try to hide them.
Having worked as a manager for large companies, most already have job titles and accompanying salary ranges. Of course these are internal documents, but making (some of) that information public isn’t going to cause the demise of the firm.
A likely scenario is that companies will inflate the high end of the range in order to attract candidates, but never pay that much to new hires. But I have also “gamed” the salary range for online application by entering $1 as my desired salary. That has always worked in my experience, so now we’re just playing games, right?
There are sure to be corrections to the law(s) as time goes on, but the concept of posting a (realistic) salary range for the job is a sound one.
@Larry B: I agree that this will give a big advantage to good companies that are not hesitant to list salary ranges. They will get the most “accurate” hires, probably better or best hires, and avoid wasting time playing the “How low can you go?” game. Job seekers should pay careful attention. It just doesn’t pay to interview or work for companies that hide salaries under a shroud of secrecy. Go to the good ones. That’s how this will pay off for job seekers in the end.
I also enter $1 on online job applications that require a desired salary. I figure if they require that the field be filled in, and they get useless information, that’s on them.
Employers are now making even the putting in of “$1” for a salary difficult to do. I just filled in an application the other day that required a number “from 20000 to 999000”. I should have just stopped at that point since they may not be an honest company…even if you try gaming their system, they come up with another game for candidates!
There is a place for non secretive pay ranges and open disclosure of one’s pay. The military. Enlisted people wear their pay on their sleeves and officers on their lapels. Changes in same are open for all to see. It’s a promotion driven world, expecting growth, & failure to achieve it leads to the exit. It functions well, directing “management” and non management to employ other benefits for motivation and reward, also open and obvious when they come into play. e.g. duty station, changes of occupational specialty, training, education which will contribute to a successful post military 2nd career. So the private sector has ample example an alternative system. One that competes as energetically as the private sector in recruiting and retaining talent all the while whilst everyone knows who is being paid what.
That aside, I thought it may be of interest to consider some insights on the corporate side of how life is like if you do openly publish job ranges. and in some cases, e.g. entry and/or intermediate roles, the related starting salaries.
Context: I was a recruiter for a small privately owned company that did this. I honestly can’t say how it would play out in the mega corporate world, other than opine it wouldn’t kill them to try. Their primary reason was to not give competitors for the talent, an edge. Or more likely a recruiting burden in the form of salary matching.
In the small company we included the salary range in the posted job description, and on our web site. As noted, for many of the industry standard jobs involved starting pay would be given. Specialties, we left wiggle room for both sides of the table.
One of our reasons was to save everyone time. Having stated the pay ranges we expected applicants would not apply if it wasn’t workable. And keep in mind this was kind of bold in another way. We competed in the same pool as the big boys who paid better. So if knowing that, and applicants should have, and they still applied, we had a chance that applicants had some other considerations, attracting them e.g. simply preferring to work for small companies. The kind of people we were trying to appeal to.
So how did it work? For the most part, well. But in spite of open disclosure, I’ve wasted a fair amount of time with applicants who do the interviewing dance & then ask for a salary outside the advertised range. After assuring me they read & understood the applicable range.. Or proving my wife’s observation that “grown men don’t scroll” and simply didn’t read it. Employing the tactic of singing a siren song, the company will fall in love with me and we’ll negotiate the salary I want. Not in that company.
The 2nd thing I ran into was blinders on the starting salary. Applicants frequently were blind to the word “STARTING” and assumed that was the pay for the job. It wasn’t. starting meant starting. The company didn’t have a probational period. As I’d explain, this actually demonstrated one of advantages of working for a small company. There was no rule as to how long you were paid the starting salary. The pay systems was not that structured. You could walk in, start hitting home runs and your supervisor could walk into the owners office & say I want to kick up the salary. I’ve seen it happen. And if you’d prove out, you’d get bumped in 3-6 months. If a person & their boss couldn’t justify that bump, Or a mutually beneficial job change, you’d be bumped back to the market place
I suspect if laws are passed, not only will corporations game them, but they’ll invoke the saying “be careful what you wish for” e.g sorry the law says this is the range, can’t move you past it.
Again, if the candidate will make money for the company, what is the problem in paying him appropriately?
As an intellectual exercise, consider a possible response from a sales appicant. “You want me to pay me $100,000 or 10% if I sell $1,000,000 in my first year?” This coud be turned around to give a better prespective: “The company agrees topay me $1,000,000 in my first year and I will pay the company 10% or $1,000,000.” Get the point?
@Wes: Yep. Smart way to put it! (Tho I think you unintentionally typed the wrong numbers.) The way I present this: Do you want your employee to be an expense, or an investment with good ROI? If the latter, hire accordingly. Assess what a job candidate is likely to drop to your bottom line. Hire for profit. You say you can’t figure that out? Well, then that’s your bigger problem. Figure it out, because if your competitor can do that, they’re gonna put you out of business, which is fine with me.
Expenses have a funny way of getting out of hand. But if you can at least estimate the employee’s ROI, then how big their pay is will be immaterial. (This is where HR and bean counters have conniptions.)
I’m sure that some will try to game the system, just as some employers still demand that you provide your salary history (even in states that have banned the practice).
I don’t see a downside to employers posting a salary range. At a minimum, it should get them to think about what the job should pay. I always ask for a range, and am always surprised that so few employers are willing to provide one. Does that mean that they think you’re going to volunteer (no pay), or that they haven’t thought about the budget for the job at all? More likely, I think they want to lowball the candidate–I understand that their goal is to get someone as cheaply as possible, just as candidates want to make as much as possible. But why not provide a range, so prospective applicants can look at it and decide whether they want to bother to apply? If the range is too low, then I pass. Of course, posting a range won’t prevent employers from changing it, but I look at it as a starting point for a discussion. And if you’re truly a rock star and the employer has more wiggle room, then is there anything stopping them from paying you more?
And thanks to to Don Harkness and others who mentioned the military and government (federal, state, and local)–you know what the jobs pay. There’s no reason the private sector can’t do the same.
Please stop throwing shade at municipal employees. Every workplace has their slackers and poor managers. Telling you from experience that it IS possible to terminate poor performers. Union rules typically makes this a bit longer with more paperwork but that is only to ensure everything was done properly.
State, local, municipal jobs are vital and we should be thankful that they do them. The pandemic showed us that!
@Yoomi: Having served as mayor of my town, I can confirm what you say. Good municipal employees can make a town successful and life happier for taxpayers. As in any field, bad employees can be disastrous.
Hi Nick, I was hoping you’d write about this. I’ve read on a couple of sites that some employers subject to these laws claim they’re going to stop posting jobs and fill all jobs through outside recruiters. (Sorry, I don’t have links.)
This seems unlikely to me because of the expense. What do you think? Thanks.
“As the saying goes, in negotiations, whoever says the number first is at a disadvantage”
That’s a common fallacy in negotiating. I’m a professional , but very average , negotiator. I succeed because of preparation, practice, and perseverance , not some set of skills and tactics.
When we sell, we always have to present first. We almost never sell below where we want to or need to.
“ When negotiating a new step, it’s all in the prep!” (Tm)
I’m late to this discussion, but because the topic earns my ire, I had to respond to Nick’s helpful newsletter. Employers who require an applicant to provide a salary expectation/requirement but don’t provide a salary range (and in my experience, most follow this insulting practice) have invited gov’t intervention. I’m a skeptic of gov’t regulation, but I find myself sympathetic to the motivations of these state laws. I agree that the laws can be gamed and, therefore, rendered less helpful. I offer an alternative approach: If an employer asks an applicant for a salary requirement, then the employer is obligated to publish the expected salary with the job posting. Not a range, but a specific salary. If that’s too extreme (and I don’t believe it is), then allow for a range but put a limit on it. I think this approach will cause employers to think twice before asking for salary information from an applicant. Employers know how much they are willing to pay; if they aren’t’ willing to disclose that salary, then they shouldn’t be allowed to ask applicants for information that they themselves won’t divulge.