Eight states (California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington) and six U.S. cities (Cincinnati, Ithaca, Westchester, Jersey City, New York City, and Toledo) currently have pay transparency laws — from requiring pay ranges in job posts to being obligated to disclose salary upon an applicant’s request.
However, the push for pay transparency isn’t exactly motivating employers to advertise increased salaries, and a new report by job site ZipRecruiter found that almost 50% of employers have actually decreased pay over the past year.
The salary drop comes after pay and signing bonuses skyrocketed during an acute period of labor shortages amid the pandemic, with wages increasing by 4.5% year-over-year in 2021 — the fastest uptick since 1983.
The new report signals that pandemic-induced wage growth is slowing down, and, in some cases, companies have started posting lower pay ranges for open roles and are readjusting their offerings.
“Employers are trying to reset candidate expectations,” said Julia Pollak, chief economist at ZipRecruiter, per CNBC.
In a survey of over 2,000 employers, 48% admitted reducing pay ranges for some positions within the past year. Of small and medium-sized companies, 50% cut pay compared to 38% of large corporations.
Meanwhile, 41% reported a role going unfilled over the past six months because candidates wanted more compensation than the company could provide.
However, despite regulations promoting transparency, 30% to 40% of employers are not even complying with the new pay transparency laws, according to data from workplace data firm, Revelio Labs, per CNBC.
Furthermore, the ZipRecruiter report found that while 72% of employers surveyed do disclose pay, 10% don’t, and the remaining 18% only do so in the territories where they are legally required to do so.
Forty-four percent of employers surveyed reported that they “worry” revealing pay rates could disincline top talent from applying because competitors may post higher wages, the ZipRecruiter report found. Of the 10% of employers that do not disclose pay, 71% said they only discuss pay in interviews, where they have the opportunity to “provide more context.”