Salary transparency: soon to be law?
A campaign to make salary transparency law has been launched by the technology-led talent platform, Liberty Hive.
The campaign calls for a ‘salary reset’ and demands that it becomes illegal for companies to ask a candidate’s salary history and a legal requirement to list salary details on job adverts. These are two processes that it is believed uphold inequality and slow the pace of change, especially for those who’ve been historically underpaid, mainly women and those from underrepresented groups.
The state of New York is the most recent state in the US that has made salary transparency law. In the UK, a salary transparency pilot scheme was launched in March 2022, where participating employers list salary details on job adverts and stop asking about salary history during recruitment. The scheme, run by Baroness Stedman-Scott, indicates that legislation change may also become a reality in the UK soon.
Candidates view salary transparency as the number one indicator of an employer’s long-term potential and 75% of candidates would be more likely to apply for a role that included a salary range. Sixty-two percent of candidates believe they should not be asked about their current or past salary in an interview
Founders of the campaign, Kate Merritt and Laura Braithwaite, said about the announcement:
“Do we wait for legislation or become leaders of change? At Liberty Hive, it became increasingly clear that as leaders of a talent business, we had a choice: we could be part of the problem or a part of the solution. Every role we post will have a salary range guide, we won’t ask our candidates the salary history question and we will work with our agency partners to share best inclusive recruitment practice. We will leverage our platform to advocate for change. We’re also introducing new technology to our portal, which will provide us with a broader data set that we can use to provide clients with benchmarking for specific roles as needed. We believe if you do one thing in 2023 to demonstrate your commitment to inclusive recruitment – salary transparency – a salary reset is the most powerful action you can take.”
However, Keely Rushmore, Keystone Law employment partner told Reward Strategy that employers feared a new law would be more red tape:
“Employers tend to fear losing a competitive edge or creating internal resentment if salary details are publicly available. But there are signs that this is changing. For example, ‘pay secrecy’ clauses in employment contracts are becoming increasingly rare. Publishing salaries in job adverts has many verified benefits, including attracting more (and higher quality) candidates, encouraging diversity and creating an impression of the employer as an organisation that is transparent and fair. Although market forces may be dictating a change of approach, this will be a slow process. Introducing legislation would inevitably speed up that change and help to ‘normalise’ pay discussions. However, many employers already feel bogged down by employment legislation and would view this as an unwelcome and unnecessary added layer of red tape.”
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