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More states roll out pay transparency laws

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Posted at 1:55 PM, Jan 03, 2023
and last updated 2023-01-03 16:51:42-05

More states are requiring pay transparency in 2023. California and Washington now require employers to add pay ranges on job postings.

Colorado was the first state to implement the law in 2021.

The rollout in Colorado came with some setbacks. Some employers began excluding the state so they wouldn't have to post the salary.

Appcast labor economist Andrew Flowers believes it will be harder for employers to continue that practice as more states pass pay transparency laws.

"Can you have California excluded? Can you have new york excluded? As we enter this new phase in 2023, his employer effect of kind of swimming around the rock, so to speak, I think it's going to be kind of diminished," he said.

Flowers claims pay transparency laws are blowing up traditional recruiting.

Appcast, a job advertising platform, compared Colorado and Utah the year before and after Colorado's law went into effect.

It found Colorado had about 8% fewer job postings. However, it had 1.5% higher labor force participation.

"The self-sorting is changing the hiring funnel for recruiters so that applicants go down, we find. But, the quality of the applicants goes way up," Flower said.

There are laws in other states that require some salary disclosure. However, that usually happens during the hiring process or if a candidate asks for the information.