ARE WE READY FOR THE PAY TRANSPARENCY ERA?
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In an effort to ‘strengthen the principle of equal pay for equal work between men and women through new EU rules on pay transparency’ the European Council has adopted new rules on pay transparency on the 24th of April of this year.
Under these new rules, EU companies will be required, among other things, to share information on salaries and take action if their gender pay gap exceeds 5%.
In the US, eight states and six local areas require pay transparency. While the vast majority of sates do not (yet) require pay transparency, many employers are seeing it as a trends. Among more than 1300 HR practitioners surveyed, 42% of their organizations are required by state or local laws to include pay ranges in their job postings, according to SHRM data released on March 14, 2023.
The survey also shows that more than two in three HR professionals say that, even when pay transparency is not required by law, their organizations still tend to list starting pay in job postings - something that may signal that companies anticipate that pay transparency laws will spread.
But how come that companies aren’t simply being transparent about their salary policies? Why does money still seem to be a topic that we aren’t supposed to talk about? And will this legislation actually lead to more transparency?
Interesting questions that bring me to our final statement: Companies are not ready for the pay transparency era: they have too many skeletons in the closet.
