A Way Around the Pay Gap?

Should You Tell Your Applicants About Your Pay Ranges?

Being interviewed for a documentary on the gender pay gap inspired one woman to construct legislation designed to eliminate it. Blogger Katie Donovan has proposed the Salary Disclosure to Promote Equality Act with the aim of leveling the playing field for employers and employees in the salary negotiation  process. What does that legislation say and how could it affect employers?

The proposed legislation aims to close the gender wage gap by providing pay range information to applicants. Employers are not currently required to provide such information, but applicants must often detail their own prior salary information. Employer and applicant therefore negotiate pay based on the applicant, rather than the job. For the individual, this can often mean a lower starting salary. For society though, Donovan believes, it means that large-scale inequities remain in place.

Women continue to face a pay gap. Estimates vary as to its size and prevalence in all jobs and industries (Donovan cites a general figure of 81 cents to the dollar) but few dispute the existence of a gender pay gap. According to Donovan, as long as starting pay is based primarily on previous salaries, instead of pay ranges, women’s pay will continue to lag that of men.

Employers should note that while Donovan's approach seeks to empower the applicant, it also may disempower the employer. It would deny employers guaranteed access to previous salary information and the right to insist on a credit check. It would even prohibit previous employers from sharing salary information.

Is this the way to close the pay gap for women? Is it how hiring should be done in general? Let us know what you think.

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