Salary Transparency Laws

Tips to help group insurance professionals support employers

By Andres Lares 

California Equal Pay Act’s pay scale disclosure requirements — effective as of Jan. 1, 2023 — were released just prior to the New Year by the California Labor Commissioner’s Office. California’s Pay Transparency Law now requires employers with 15 or more workers (including remote, hybrid, in-person positions) to: 

  • provide employees with pay scale information for their position and 
  • to affirmatively include pay scale information in job postings, on a company’s hiring page or third-party website like Glassdoor, LinkedIn or other job board. 

This move currently makes California the largest state where job listings will require salary information by law. According to a recent study by advisory firm WTW, 31% of employers said they aren’t ready to comply with the laws and 46% admitted to putting off doing so, fearing possible fallout from current employees. While the mandate can cause backlash amongst employers and employees, especially when it comes to salary history, keep in mind the core intent of the law is to ensure employees don’t get lowballed. According to Payscale data, by the end of this year, roughly 1 in 4 workers will be covered by a state or local law that requires businesses to be transparent about their pay ranges.

Ways to help your clients navigate unfamiliar waters

As a trusted advisor, brokers are in a position to help their clients attract and retain workers with robust benefit packages to complement their salary transparency disclosures to support their recruitment efforts. Because the fact is, the biggest opportunity for employers is more efficient recruiting. Transparency laws ensure there are no surprises or disconnects with candidates and future employers on salary expectations. As a result, employers save time and resources on the interview process. 

Factoid: According to Appcast job advertising platform, the cost-per-click for ads with pay listed in the job description and title is about 35% lower than ads without pay information in the title. By advertising your pay range in the job posting, you can significantly reduce your recruiting costs!

Currently, candidates know the range prior to even applying, let alone being made an offer. They may have even explored benefit packages, or have their own expectations to be met. With employers competing for quality candidates, brokers can help them present the most welcoming environment to attract and keep their workers. Defining what qualifies a candidate for the top of the salary range versus the bottom can also add pressure to employers. The transparency laws also give leverage to minority employees and candidates by providing additional ammunition to ask for raises and/or ask for more when embarking on a new role.

Opportunity for brokers to engage

Another major advantage to the transparency laws for employers is open access to market pricing. Businesses can now see the ranges competitors are paying their employees in similar roles. ‘Competitive pay’ means a salary comparable to other employers in the market for a similar job. With transparency laws, business owners can now access the information to gauge whether their company’s compensation is equal to or above the standard offered by companies in the same industry or geographical area. 

Competitive pay with robust benefit packages is one of the best ways to attract and retain talent. It’s also an excellent opportunity for brokers to engage with clients to make sure they are aware of all the ways you can support them to build their compensation package with attractive benefits. 

Honoring the spirit of the law

I encourage business owners and brokers to recognize the intent and follow the spirit of the transparency law. Some may believe that a way to skirt the law is to create a myriad of positions — each with unique requirements and widely varying pay scales — in order to fit the candidate to a position that is “appropriate” to their unique talents. In this way, a candidate may apply and interview for a position only to be told that while they are not quite right for that position, they are perfect for another position with slightly lower salary and responsibility expectations. As a result, a completely different but equally transparent compensation scale is met. However, that tactic can undermine the intention of the law, and a candidate’s trust of the company. 

Don’t forget, there were plenty of opportunities for new and current workers to research salary information and company reviews before transparency laws went into effect. There are helpful resources to catch a glimpse into company culture, benefits and pay. Because of these sites, it is easy for candidates to triangulate from multiple sources to verify the information that the company freely provides. Obviously companies that share complete and honest information, and later have that information verified by the candidate on an objective source like and are the ones who operate with honesty and integrity. 

Tips and touchpoints

Statements that are counter to your own self-interest build trust. It has not been the norm for employers to be transparent. So, being transparent is perceived as counter to the company’s self interest as an employer — as a statement against self interest. Candidates recognize transparency by an employer as showing vulnerability. As a result, studies show that candidates find the employer more credible and trustworthy –— very sought after qualities. Wise companies that are honoring the spirit and intention of the law are finding this open approach is enhancing their recruitment efforts.

Andres Lares is the managing partner at Shapiro Negotiations Institute

(SNI), where he is responsible for the day-to-day operations of the global training and consulting firm. He served as chief innovation officer until 2017. Lares multi-disciplinary and lingual skills broaden SNI’s ability to effectively teach and consult in a wide range of industries, languages, and cultures.

Andres co-authored “Persuade: The 4-Step Process to Influence People and Decisions,” published by Wiley in July 2021. It instantly became the #1 new release in Amazon’s Education category as well as a best-seller in Porchlight’s business book list. 


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