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Pay Transparency: Changes in Norms are Leading to Changes in Laws

Written by John Stoddard on February 15, 2022 Category: Business Law & Transactions, Firm News, General Counsel and Advice, Small Businesses

Dalton & Tomich represents many business owners, human resources professionals, and employers in any other sense of the word. If those labels apply to you, then you have heard about “pay transparency,” or you soon will. In short, there’s a movement afoot to make the salary associated with a job less of a secret.

The trend is sweeping across the country. It is bound to be a workplace and hiring norm by the end of this decade, if not before. That would mark a big change from how society used to frown upon salary discussions in the past.

For example, my parents never talked about their income. I learned at a young age that what others earned was none of my business. As a parent, I’ve often given that response to my own children. They didn’t need to know how much or how little their parents made.

It’s been much the same in the legal industry during my thirty years of practicing law. Outside of Big Law—where profits per partner and starting salaries for new associates are treated as stats on a scorecard—law firms have generally held salaries and bonuses close to the chest.

It’s nobody’s business. At least that has historically been the outlook. When I worked at a 100+ attorney firm twenty years ago, a paralegal was reprimanded for sharing what she thought was the salary of associates in the office. After all, it was none of her business.

Further back in my career, when another young attorney applied at our small firm, the owner asked her what she would like to be paid. Her response: “I know you are a man of integrity, and whatever you pay me will be fair.”

Neither part of that was true, and she literally began work without knowing her salary. That strategy backfired because, naturally, the owner low-balled her. The associate worked there for a few years, always grumbling about the pay. If the firm’s salaries had been transparent, she would have known that other lawyers with just a bit more experience were making almost three times as much with better perks.

Fast forward to today. As a culture—at least as judged through the lens of social media—things have changed dramatically, and for the better. Consider, for example, the online outrage that was directed toward a recruiter who posted on LinkedIn about her experience offering a job candidate $45,000 less than the hiring budget because the individual did not negotiate for a higher salary. The recruiter framed her post as a learning experience for other candidates and closed with #beconfident, but the internet was having none of it. The consensus was that there will never be pay equity unless there is more pay transparency from employers.

And it’s not just the culture that’s changing. Lawmakers are taking action, as well. The federal government, several states, and specific municipalities (soon to include New York City) have implemented pay transparency laws with the ostensible goal of pay equity. In those jurisdictions, depending on the language of the statute or ordinance, applicants and/or employees are entitled to a) a realistic salary range upon request and upon reaching a threshold in the hiring process, b) a realistic salary range in the job posting, or c) protection from adverse treatment simply because they disclosed their salary or inquired about it.  Talking about how much you make—or knowing how much that other employee makes—may be one of the last taboos to fall in the workplace.

Don’t get me wrong—I’m not interested in walking down the hall to find out how much each of my colleagues makes. However, I was impressed with the pay transparency Dalton & Tomich provided before I even interviewed here.  That included being presented with the compensation structure identifying the minimum, or base salary, for different tiers of partners. Looks like we’re headed in the right direction.

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