Dive Brief:
- Seventy-five percent of companies aren’t ready for pay transparency laws, according to the results of a survey by Aon plc, a global professional services firm, released Dec. 5. Yet, 14 U.S. states and four Canadian provinces will have laws in place by the end of 2025 and all European Union countries will by the end of 2026.
- Of the 626 global U.S. employers surveyed, those in retail and e-commerce (33%), financial institutions (21%), manufacturing (20%) and professional and business services (20%) reported feeling the most prepared.
- While 81% of employers surveyed said they include salary ranges on job listings, 63% said they don’t share salary ranges with current employees. Of the 37% who do share salary ranges with existing workers, 61% said they only disclose that information where they are required to do so by law.
Dive Insight:
In addition to states, some U.S. cities have passed their own laws requiring employers to disclose pay or salary ranges, including New York City and Cincinnati.
“The rise of pay transparency and pay equity initiatives reflects a broader cultural shift, particularly among younger employees,” Brooke Green, head of talent solutions for North America at Aon, said in a statement. While it was once considered “impolite to publish salary information,” Green said, not doing so may reinforce and exacerbate pay gaps.
Green said companies that comply with new regulations “sooner rather than later” will be better able to tackle pay disparities, encourage fairness and help workers make informed career choices.
Forty-seven percent of companies with significant operations in Europe said they were concerned about the upcoming EU Pay Transparency Directive, according to an October report by software company Syndio. And one expert said the directive will “upend” how companies manage and explain pay.
The laws are effective in making companies share pay information, according to an October story from Indeed’s Hiring Lab. The three states and localities that showed the largest growth in salary transparency over the past year — Hawaii, Washington, D.C., and New York — had pay transparency laws that went into effect around the last year.