Make Companies Publish More Salary Stats for Their Roles
These stats should include every salary’s average, standard deviation, and median for the employees currently in that role
In May 2022, all employers in the City of New York with more than 50 employees became legally required to publish salary ranges for the roles they’re hiring for.
The range for the listed maximum and minimum salary would extend from the lowest salary to the highest salary that the employer in good faith believes it would pay for the advertised job, promotion, or transfer.
In December 2022, Governor Kathy Hochul signed a similar law, to take effect September 2023, for all employers in the state of New York. Both laws appear to be a step in the right direction towards narrowing the compensation gaps between white men, women, black women, and hispanic women.
However, the level of transparency required by these laws is not enough to shrink the salary gap between demographic groups. The state of New York should update its pay transparency law to include the average and standard deviation of the salaries for employees who currently occupy their posted roles.
Why? Companies complied with the current law in NYC to varying degrees, many of which were a better fit for r/maliciouscompliance than a job board. Citibank notoriously posted a salary range of $0 — $2,000,000 for a role before claiming there’d been an error and updating the range to $59,340 — $149,320 (still an absurdly broad range). Other companies settled on similar ranges, posting bands over 150% as large as the smallest salary for the role. While many roles do have variations in skill, experience, and luck that warrant different salaries, oftentimes companies use this range to trick prospective employees into believing they will be compensated towards the upper end of the pay band when in reality, no one — or extremely few people — within the company actually make that amount in the role.
New York’s transparency laws are a fine first step, but they desperately need to account for this loophole if they intend to materially help applicants and employees. The law should be amended to require employers to also post the average amount of compensation people in that role were paid in the previous calendar year. This could only apply to roles with some baseline population, like 5 employees, to maintain the compensation privacy of individuals currently in those roles. And, the law should include a standard deviation component to make it clear how uniformly scattered salaries are throughout their posted range.
For example, Google currently has a Software Engineer role posted with a salary range of $126,000 — $190,000. This range is not helpful enough for the many people who aren’t sure whether their background should land them in the upper or lower part of that range.
Now, imagine Google was also required to post the salary average and standard deviation for this role. What if they posted an average salary for this role of $134,000 with a standard deviation of $3,500? What about an average salary of $163,000 with a standard deviation of $21,000? These paint very different pictures of Google’s compensation. The latter scenario implies Google is actually making good use of its posted band, while the former implies Google is disingenuously posting a wide band despite not actually paying people uniformly throughout the salary range, especially towards the upper end.
In both scenarios, with the addition of the average and standard deviation of the salary people currently in the role are being paid, applicants would receive crucial context about the real salary they could expect.
A gold standard improvement to the law would further mandate employers post the median salary for the role, giving applicants and employees even more context when just a small portion of the current salaries are outliers that skew an average or inflate the standard deviation.
This level of transparency is what the New York law intended, and New York workers deserve to know what companies really pay.
Edited by Kian Vésteinsson and Jimmy Nugent