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Webinar - How to Build Salary Ranges in the Context of Pay Transparency Legislation
The document covers the implementation of pay transparency legislation and best practices for setting salary ranges in job postings, highlighting various state and international laws effective between 2021 and 2025. It outlines the definitions and requirements for salary ranges across different jurisdictions, emphasizing the need for compliance and transparent compensation practices. The presenters also address common concerns and methodologies for determining pay ranges, as well as implications for internal equity and recruiting processes.
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Webinar - How to Build Salary Ranges in the Context of Pay Transparency Legislation
- 1. How to BuildSalary Ranges in the Context of Pay Transparency Legislation
- 2. Today's Presenters: Ruth Thomas ChiefEvangelist Lulu Seikaly Senior Corporate Attorney- Employment Kim Taylor VP of Compensation Services
- 3. Today's Agenda • Whatdo new pay transparency laws say about setting ranges? • Best practices in setting pay ranges for job postings wherever you are on your journey • Answers to your top questions
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- 5. The pace ofpay legislation is building and is a force for change Effective January 1, 2021 Colorado Effective June 1, 2022 Prince Edward Island Effective January 1, 2023 California Effective January 1, 2023 Washington Passed March 31, 2023 EU Pay Transparency Directive Effective September 17, 2023 New York State Effective November 1, 2023 British Columbia Effective January 1, 2024 Hawaii Effective June 30, 2024 Washington D.C. Effective October 1, 2024 Maryland Effective January 1, 2025 Illinois Effective January 1, 2025 Minnesota Effective June 1, 2025 New Jersey Effective July 1, 2025 Vermont Effective October 29, 2025 Mass. Effective January 1, 2026 Ontario Keep up to date with legislation here!
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- 7. Pay Transparency USLegislative Landscape
- 8. 8 Slight difference inlaws… • Rate of pay or a range of possible offered rates (hourly, salary, etc) + general description of benefits/other comp • Compliant ranges span the lowest to highest that the ER actually believes it’ll offer for the job Colorado • “Pay scale” means the salary or hourly wage range that the employer reasonably expects to pay for the position. • Does not need to include bonuses, commissions, tips, or other benefits California • Salary range should provide applicants with the employer’s “most reasonable and genuinely expected compensation range for the job” + general description of benefits • The range should extend from the lowest to the highest pay established by the employer prior to publishing the job posting Washington • Salary range means the minimum and maximum annual salary or hourly rate that the employer in good faith believes to be accurate at the time of posting + benefits are optional New York State • Hourly rate or salary range that reasonably reflects the actual expected compensation Hawaii • Minimum to maximum hourly/salary that the employer “in good faith” believes they’ll pay for the role + must inform of benefits Washington D.C. • Must post a “good faith range” or budgeted amount for the role Maryland
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- 10. 10 Canada Prince Edward Island •All employers (not clarified) • Expected pay or range of expected pay for the role British Columbia • All employers in BC • Expected pay or the expected pay range for a job posting Ontario • Employers with 25 or more employees • Post pay ranges in all job postings for work performed in Ontario, must disclose AI usage, and specify job type (FT/PT) /work location (remote, hybrid) • Must retain job posting records for three years after posting taken down • January 1, 2026 Newfoundland and Labrador TBD
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- 12. EU Pay TransparencyDirective March 2021 Proposal on pay transparency introduced December 15, 2022 EU Commission and EU Parliament reach an agreement on directive with two key parts 1) Pay Transparency Measures 2) Better Access to Justice for Victims of Pay Discrimination March 31, 2023 EU Parliament Passes Directive on Pay Transparency aims to strengthen equal pay for equal work (or work of equal value) through pay transparency, gender pay reporting, and other enforcement measures. June 2026 The EU member states deadline to implement the requirements into local law with reporting commencing in 2027
- 13. Poll 1: Whatdo you use in job postings currently? (Select one) • We are not ready to share ranges in job postings yet • We share the full job or grade range • We share the fair hiring range • It depends on the role • I don’t know
- 14. Best practices forsetting pay ranges for job postings
- 15. What do Ido if I have…? Market data Market data + Employee information Market data + Employee information + pay structures Market data + employee information + pay structures + job levelling
- 16. You only havethe market data to help you decide- • Sense check the numbers – do they look right to you? Do you have any market insights that indicate a higher rate? • Check against your budget • Check against your knowledge of other employees in same or similar roles to ensure internal relativity • Decide the mid-point of the range you are going to post • Decide on width of the range (what would your maximum be?) • EG: midpoint is median market salary / 5% range either way $72,000 - $80,000 What do I do if I have market data only?
- 17. You have themarket data and internal info to help you decide- • Check the market data against the current incumbents • Check against your budget • Check against your knowledge of other employees in similar roles • Decide the mid-point of the range you are going to post • Decide on width of the range (what would your maximum be?) • EG: minimum is 25th percentile of market so that it is in keeping with current employees + 10% $69,000 - $76,000 If you want to offer more so that it bridges market median look at whether those currently in the role below the posted range need to receive increases What do I do if I have market data + employee info? Role: IT Software Engineer I
- 18. You have themarket data, the pay structure the role fits within, and internal info to help you decide • This includes all ‘comparable’ roles • Check the market against the current incumbents in that role and in comparable roles • Check against your budget • Many companies use the minimum of the range and decide how high to go • EG: min of range + 10% $70,000 - $77,000 If you want to offer more so that it bridges market median, you should be looking at whether those currently beneath the posted range need to receive increases What do I do if I have market data + employee info + pay structures? Role: IT Software Engineer I Pay structure: Tech
- 19. You have themarket data, the pay structure the role fits within, the rest of the job families at that level, and internal info to help you decide • This includes all ‘comparable’ roles and those of ‘equal worth’ • Check the market against the current incumbents in that role, in comparable roles, and in other roles at the same level • Check against your budget • Range will generally still be related to role / pay structure But you should be aware of incumbents in other roles at the same level who may feel that they are comparable What do I do if I have market data + employee info + salary structures + job levelling? Role: IT Software Engineer I Pay structure: Tech Job Level: B
- 20. Poll 2: Whichof the following do you need to support this process? (Select all) • We need to source market data to support us • We need to create pay ranges (job based) • We need to create pay ranges (grade based) • We need to level jobs to allow for like work comparisons • We need to action internal equity adjustments • We need to train managers on our compensation practices • I don’t know
- 21. Answers to yourtop questions
- 22. What we doat Payscale? After determining the pay range, we typically post the full range. Leader requests a new job to be created; HRBP gathers background info. Salary ranges are created and communicated to hiring manager and FP&A for budget approval Job description sent to compensation Compensation sets a hiring range. TA creates a req and posts the job. Compensation uses job description to benchmark jobs in Payfactors. The benchmarks provide a market value for the job. When a final candidate is identified, an offer is extended
- 23. What if thejob has no pay range for a role (e.g., one flat salary rate or a step structure)?
- 24. What if wehave broad band ranges?
- 25. Should non-exempt/hourly rolesbe posted as an hourly rate range or is it okay to post as an annualized salary range?
- 26. Will applicants expectto negotiate to the top of the range?
- 27. What happens ifyou have internal employees below or above the range you are posting?
- 28. What if wehave different rates for different GEO’s and the role can be done remote?
- 29. Should you provideinformation on factors contributing to the range of compensation (e.g., compensable factors)? Should you share information on other elements of reward (e.g., bonus, benefits etc.)
- 30. What we doat Payscale? Compensation In the spirit of pay transparency, we are excited to share the base salary range for this position is $99,400 - $149,000, exclusive of fringe benefits or potential bonuses. This position is also eligible for an annual corporate bonus of 10%. If you are hired at Payscale, your final base salary compensation will be determined based on factors such as geographic location, skills, education, and/or experience. In addition to those factors – we believe in the importance of pay equity and consider internal equity of our current team members as a part of any final offer. Please keep in mind that the range mentioned above is the full base salary range for the role. Hiring at the maximum of the range would not be typical in order to allow for future & continued salary growth. We also offer a generous compensation and benefits package (more information on benefits listed below).
- 31. Our recommendations Always compareany internal employees in the same role or roles of similar value before posting ranges externally – AND never assume your employees won’t see it! Make sure you understand in advance and have agreed with the hiring manager what compensable factors you will use to decide placement of a candidate in your advertised range. Document and retain the reasons for the pay range you posted. Avoid job postings for generic positions with wide pay ranges. Consider modifications to job titles to more closely align with pay differentials. Be transparent about your compensation philosophy and your total reward offering – use this as an opportunity to market your pay brand and your EVP. Talk with your employment counsel to ensure that your job postings comply with relevant laws.
- 32. Q&A Feel free toask any questions in the chat! Interested in a demo of how Payscale can help you compensate fairly in the wake of increased pay transparency? Let us know in the polling tab of your dashboard!