More than 1 in 4 U.S. workers covered by pay transparency laws

Nearly 83.6 million workers in the U.S. could now be covered by pay range transparency laws, according to the non-profit organization National Women’s Law Center.

Overall, nearly 44.8 million people in the labor force – or 26.6% of the U.S. labor force – are covered by the laws.

Eight states have already passed pay range transparency laws.

These are California, Colorado, Connecticut, Maryland, New York, Nevada, Rhode Island and Washington.

“Nearly 21 million of the people in the labor force in these states are women, meaning 26.4% of women in the entire U.S. labor force are covered by the eight new state pay range transparency laws,” it said.

“This includes over 9.9 million white, non-Hispanic women, over 5.4 million Latinas, over 2.5 million Asian American, Native Hawaiian, and Pacific Islander women, over 2.1 million Black women, and over 200,000 Native women. It also includes nearly 6.5 million mothers, over 2.2 million single mothers, over 1.5 million women in poverty, and over 13,000 women with disabilities.”

Eight of the top 10 metropolitan areas with the highest increase in pay transparency from February 2022 to February 2023 are in California, according to Indeed’s U.S. pay transparency research released in March.

Others states considering pay transparency laws

An additional 16 states and D.C. have considered pay range transparency laws in the 2023 state legislative session, noted the National Women’s Law Center.

These are: Alaska, D.C., Georgia, Hawaii, Illinois, Iowa, Kentucky, Maine, Massachusetts, Missouri, Montana, New Jersey, Oregon, South Dakota, Vermont, Virginia, and West Virginia.

If these bills are passed, nearly 38.8 million additional people or an additional 23% of the U.S. labor force, would benefit.

Again, women will be well represented, according to the law center: “Nearly 18.5 million of these people are women, including over 11.7 million white, non-Hispanic women, over 2.6 million Black women, nearly 2 million Latinas, nearly 1.2 million Asian American, Native Hawaiian, and Pacific Islander women, and over 120,000 Native women. They also include over 6 million mothers, over 2 million single mothers, over 1.4 million women in poverty, and nearly 12,000 women with disabilities.

“With the addition of these women, 49.7% of women in the U.S. labor force would be covered by state pay range transparency laws.”

While 70% of companies consider achieving pay equity as critical to their business success, only five percent are getting it right, according to a previous report.

Getting started with pay transparency

Here’s how you can start making progress on pay transparency at your organization, according to Jen Dewar, CEO and principal consultant at boutique digital marketing agency Jalydew:

1. Consider your company culture and any applicable laws to build a pay transparency policy that best suits your organization.
2. Ensure internal stakeholders are aligned on how you’ll target compensation against market rates and which factors will determine employee pay.
3. Update your pay ranges to ensure you can continue to attract and retain talent while making consistent pay decisions.
4. Help managers understand what drives pay and how to communicate it with their direct reports.
5. Announce your pay transparency policy to all team members after company leaders have signed off but before it becomes effective.
6. Monitor things like employee sentiment, pay equity, and offer acceptance rates so you can fine-tune your pay transparency policy over time.