Pay transparency is changing how you seek jobs and raises

Knowing if you’re being paid fairly for the work you do is a mystery shrouded in a lack of information. That may be changing, though, and pay transparency may be the catalyst.

It’s a growing trend for companies to reveal what a job opening or current position pays — whether voluntarily or because governments mandate it.

Salary ranges might be required by state

About a dozen states and municipalities have mandated access to salary information, including California, Colorado, Washington and New York City.

Companies in the jurisdictions are generally required to post salary ranges indicating the minimum and maximum pay. Rules vary: Sometimes only job applicants must be told; other times, employees can also request information about their pay range.

In California, where the pay transparency law went into effect Jan. 1, employers with 15 or more workers must reveal salary ranges to workers and list them on job postings. Failure to comply can bring fines as high as $10,000 for each violation.

Roberta Matuson, president of Matuson Consulting in Boston, consults with companies looking for toptier talent. She said pay transparency “is a step in the right direction.”

“Knowledge is power,” she said. “If you have no idea that you can possibly earn more money, then you wouldn’t even ask for it.”

‘Just turn the question around’

Pay transparency won’t eliminate salary negotiation, said Lexi Clarke of Payscale, a national provider of compensation data and services. Instead, she said, it will spark discussions of pay expectations.

It will help employees and candidates “understand what their expectations should be, and where [salary] boundaries are and where there might be flexibility. It levels the playing field between employers and candidates to have a more open and transparent conversation,” she said.

Lulu Seikaly, a senior corporate attorney with Payscale, noted that as laws stand, employers could offer pay higher than a range that is posted for a position, as long as the company can provide objective reasoning for the exception. In the past, companies would often base offers on what a person earned in prior jobs, Seikaly said. “A lot of states have banned that now.”

If a potential employer asks for your salary history, Matuson said, “I wouldn’t refuse to answer; I would say, ‘Well, tell me what you’re offering for this position.’ I would just turn the question around.”

Too early to say if pay gap will be f ixed

Pay transparency reveals salary ranges, but does it narrow gender and ethnicity pay gaps? It may be too early to tell.

However, Clarke said organizations that are more open about salaries often have a well-defined compensation structure and are less likely to have pay inequities.

She predicted how the gender pay gap might narrow: “Women’s salaries will increase to where they should be — some overpaid men’s salaries may slightly decrease, to be more in line with where they should be.”

What if my pay is on the lower end?

If you find out you’re at the lower end of a salary band, Clarke said pay transparency will help you communicate with an employer about what you think you deserve, “and you’re anchoring that all into data, which is really powerful,” she said.

Matuson advised asking your employer how you can add more value and what skills you need to increase your pay and opportunities for promotion.

And if you’re at the top of the pay scale?

What if you find out you’re at the top of your job’s pay band? One result could be pay compression at the top of a pay scale, with the highest-paid workers facing increasing resistance about salary hikes. Should you worry that you’re maxed out and might be among the first employees to be cut?

“Well, I think you should always be thinking, ‘I might be cut,’ ” Matuson said. But she adds that even if you’re not actively looking for a job, call a few headhunters to determine pay scales for your current work and potential opportunities.

If you’re trying to determine a salary, several websites offer tools that help you see a relevant range of pay. Check out Payscale, Indeed, Glassdoor and Salary.com for such tools.