California’s turn to require wage disclosure

Catherine Rioux, CRHA, President of Rioux Consultants RH (source: courtesy)

September 30, 2022

Since September 30, California requires companies with more than 15 employees to post a salary range in their job postings. The State of New York is also in the process of legislating in this direction. Is this an inevitable trend? Is this an approach that can be transposed to Quebec? We put the question to Catherine Rioux, CHRP, president of Rioux HR Consultants.

Isarta Info: After the Colorado in 2019 et New York State this yearit is now California to pass a law requiring employers to publish a salary range in job advertisements. Since September, Indeed France obliges companies that use its platform to indicate a salary range, otherwise the platform will publish an estimated range. Is Quebec the next state that will require companies to advertise salaries in their job offers?

Catherine Rioux: It is difficult to predict when such a practice could come into force in Quebec, but one thing is certain, in the medium term it is a tangent that the labor market is taking. Even if it is not unanimous, this practice is increasingly common in Quebec in job offers, especially for positions that are difficult to fill in various sectors of activity where competition is very strong. For example: insurance, information technology, etc. Employers compete for candidates and compete to attract the best candidates.

In your opinion, is it a good idea to go down this path?

C. R. : Care should be taken when deciding to display the salary. Yes, this practice is a priori commendable since it calls for an essential component for cohesion within any company: transparency. That said, before posting, you have to ask yourself the right questions, namely: is the salary offered in line with my salary structure? Does it respect my internal fairness?

If I offer a salary higher than that currently offered to my employees, I create a feeling of injustice and inequity, which I want to avoid at all costs as an employer. I must also ensure that I am able to meet the salary promise made to potential candidates. For example, I cannot offer a base salary of $40,0000 and underbid a candidate.

From an employer’s point of view, what are the pros?

C. R. : Listing salaries can position the job ad favorably among competitors and can be a way to stand out in the market. But for that, I have to make sure to offer a competitive salary and benefits otherwise it will have the opposite effect.

It is a practice that also makes it possible to target candidates whose salary expectations are in line with my job offer and correspond to my salary structure. For an employer or recruiter, it saves time.

Can there be counterpoints or perverse effects?

C. R. : If I focus on corporate culture and working conditions rather than salary, I must make sure to emphasize these aspects in my job offer.

The employer now has an important role to play during the recruitment process to sell his company to candidates and stand out as an employer. Gone are the days when only the candidate had to put forward his talents, skills and sell himself to get a job. The shortage of labor contributes to counterbalance this phenomenon.

During the hiring process, we talk about the company, the culture, the benefits and conditions offered. We want to present the company in its best light in order to differentiate our offer and ensure that the candidate chooses us. In such a context, the importance of having a strong employer brand takes on its full meaning.

As a CHRP, is this an approach that you encourage, suggest?

C. R. : Absolutely, yes. However, basic criteria must be respected: having a salary structure that is respected, in order to have an adequate positioning in relation to its competitors as well as internally between its employees. The best way to ensure that we position our company well and avoid errors that could harm our hiring process is to surround ourselves with people who specialize in human resources.

Here are some highlights about California’s pay transparency law:

– According the legislative text, “this law would require an employer, upon request, to present to an employee a salary range for which the employee is currently employed. This law would require employers with 15 or more employees to include a salary range for a position in any job posting.

– “This law would require [à publier] a wage report that includes median and hourly rates by race, ethnicity, gender for each job category.”

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