Pay equity winds are blowing – is your credit union ready?

New year, new laws! This January, at least two states have put laws in effect that mandate employers practice what job seekers beg for: Put the salary in the job posting!

Lawmakers haven’t just enacted these pay transparency laws to keep applicants from wasting their time applying for jobs that don’t meet their salary requirements. Their intent is to close wage equity gaps. While the federal Equal Pay Act has been in effect since 1963, essentially banning sex/gender-based pay discrimination, deep pay inequities persist across many industries.

According to a recent pay equity study conducted by the American Association of University Women, “in 2020, women were paid just 83 cents for every dollar paid to a man.” The racial pay gap is wider still. Last year, Black men earned about 75% of what white men did, and Black women earned less than 64%.

Research has shown that the gender pay gap actually shrank slightly in 2020 — but that’s not cause for celebration. The reason, experts say, is that a significant portion of women with low-wage jobs lost work during the pandemic, which skewed the statistics.

With that in mind, proactively implementing practices that may close the pay equity gap is critical. Many states have enacted their own versions of this law to protect all employees from compensation-related discrimination. For example, many states prohibit employers from inquiring about applicants’ salary history. The logical next step toward closing the pay equity gap is in transparency.

Advocates of pay transparency believe publishing salary ranges will affect how prospective candidates negotiate. Knowing the salary range eliminates guesswork and provides information that candidates may not otherwise know, making it easier to know where to start with negotiations. This can be particularly helpful for women and people of color who are often penalized when attempting to negotiate.

Not everyone is excited about these new laws, despite how well-intended they might be. Some employers fear that this kind of openness on pay could breed resentment among colleagues or help rival organizations poach their workers.

Where do you stand on the pay transparency issue? With approximately 1 out of 5 employees working in a place where disclosing the salary in the job posting is mandated, some of you don’t have much choice in the matter. But what about everyone else?

If this is a best practice in equity and inclusion, would you consider getting ahead of the legislative curve and posting your salaries today? Are you having these conversations about pay equity and your responsibility as a leader to close the gap?

Today’s job seekers are looking for – no, wait – are expecting transparency! It’s time for credit unions to embrace this change and take steps to create more equity in compensation. Can you feel the winds of change blowing?

As your credit union works to win the war for talent and prove that you are deeply committed to building an equitable and inclusive workplace for your diverse employee base, do not overlook pay equity and pay transparency as key tools to help. Humanidei works with clients to implement these and other key strategies for inclusive and equitable talent attraction, development, and retention. Let us know if you’re ready for help in closing the pay equity gap!