New York Employers’ Solution to Pay Transparency: $ 100,000 Salary Bands

In the brave and newly transparent world for job seekers in New York City, many still wonder: wait, how much does this role really pay?

Employers are testing the limits of a new municipal law requiring pay bands on job advertisements by posting pay bands that, in some cases, exceed $ 100,000, according to a Bloomberg News analysis of over 400 open roles.

A field operations manager at Verizon in Brooklyn, for example, could earn a starting salary of between $ 92,000 and $ 171,000. For a New York-based compliance officer at Wells Fargo, the range is $ 173,300 to $ 359,000, a difference of more than $ 180,000. At IBM, the potential salary for a technology engineer ranges from $ 73,000 to $ 152,000, more than double, according to posts on the company’s websites and the Indeed job site.

As New York employers adjust to new regulations, many lists leave candidates more confused than ever. In some of the pay bands examined by Bloomberg, the lower end of the pay band is less than half the suggested maximum.

“The question arises, ‘How do I really know how much this job pays?’ “said Nancy Romanyshyn, director of Syndio, which produces software that helps companies eliminate wage disparities.

The new law requires all companies with four or more employees to produce a “good faith” pay band for jobs in the city of 8.5 million people. It defines a “good faith” estimate only as what the employer “honestly believes” a successful candidate is willing to pay. For the most part, clearing experts admit that these things are far more art than science.

Bloomberg collected a cross-section of more than 400 new listings from a dozen major employers in New York to see how they are interpreting that mandate. The approaches vary, as does the breadth of the payment ranges.

Companies such as Bank of America, JPMorgan Chase, Google, NBC, and Citigroup had fairly tight ranges for jobs reviewed by Bloomberg, with minimum wages that in many cases were 60% to 80% or more of the maximum. Citigroup and Google, which began publishing pay bands for all jobs in the United States, appeared to be using a specific ratio to set their bands, while JPMorgan and Bank of America’s bands were less uniform.

Others, including Verizon, Wells Fargo, and IBM, have opted for wider ranges, with many of the minimum starting salaries being half or less than the maximum. Verizon consistently posted a high-end salary that was approximately 1.85 times the lowest end of the range; in Amazon’s listings the high-end of the range was nearly double the low-end, typically.

Wells Fargo, Amazon, and IBM said the ranges take into account variables including geography, skills, and experience. “We will of course abide by the law,” said August Aldebot-Green, a spokesperson for Amazon, in an e-mailed statement. “Amazon agrees to pay equity.” Verizon did not return a request for comment on its methodology.

The New York City Human Rights Commission, which enforces the rules, has not returned a request for comment on how it will evaluate pay bands. Businesses face fines of up to $ 250,000 for non-compliance.

In Colorado, which has a similar wage law, companies face potential enforcement for posting salary bands with unrealistic starting salaries, such as a penny, or for not having final salaries, said Scott Moss, division director. of labor and statistics in the Colorado Department of Labor and Employment. No one has yet been fined for this.

Employers and employees are increasingly at odds as large swaths of the workforce are resisting returning to the office after several years of successfully working from home. Both job openings and the number of people leaving peaks are outside recent highs, but the most recent job report showed that hiring is still strong, with wages rising by 261,000 versus an average estimate in a Bloomberg poll of economists asking for an advance of 193,000 in paychecks. Wages have also risen. With the new pay transparency requirements, not only may an employer fail to attract the new talent they need, but a poorly planned range can also mean that existing employees move on to companies that manage it best.

Internally, companies generally have pay bands in mind for open roles. But now potential recruits are seeing that decision making in public – often for the first time – warts and all.

Although employers have had months to prepare, discrepancies and technical problems are inevitable as companies adjust to forced pay transparency after decades of secrecy. Many executives are divided on whether to present their entire salary range, as it exists internally, or a smaller subset for public consumption, said Justin Hampton, founder of Compensation Tool, which compiles and analyzes payroll data. They are also concerned that existing employees will see a range and be upset and that potential candidates will all expect maximum pay.

JPMorgan, Bank of America and Citigroup did not comment on their methodology. Google cited guidelines on its corporate website that explain that pay bands are set nationwide and individual pay is influenced by factors such as experience and relevant education.

Other companies are likely to present a national figure that attempts to account for all possible circumstances, Romanyshyn said. Nuance doesn’t enter the equation until later in the process. Human resources departments are also depleted after dealing with COVID-19, widespread resignations, return-to-office policies, inflationary pressures and other tensions, she said. Wage transparency is another minefield.

“The whole point of a compensation program is to reward people,” Romanyshyn said. “You want to engage people and keep the employees you have. So the last thing I want to do is create questions. I think it’s a great experiment. ”

Companies typically set a range by deciding on a multiple they will use to get the minimum to maximum amount of the salary they are willing and able to pay, said Denise Liebetrau, compensation consultant and compensation negotiation coach at Prosper Consulting. The weak point is paying someone within 10% of the median of that pay range. If an employee is offered a salary outside that range, lower or higher, there should be a clear reason, Liebetrau said.

For employees wondering how to interpret the new information, a good rule of thumb is to take the published range, find the center, and compare that figure to the salaries posted on third-party sites like Glassdoor, according to Liebetrau. That rough analysis should reveal whether the range represents a reasonable salary. If so, the candidate should focus on building a payable case closer to the top of the range when initiating wage negotiations.

Ultimately, the goal is greater transparency in job advertisements to allow women and other underpaid workers to get a better idea of ​​what a position might pay and what to ask for in negotiations, with the hope of narrowing pay gaps. . Nationwide, the pay gap for women is around 83 cents for every dollar earned by their male counterparts, according to US census data. This gap varies by industry, but tends to favor white men.

“Just having the range has value; it gives us more information on how an employer is thinking about paying for a job, “said Liebetrau.” There will still be people who will be skeptical and annoyed that the range is no longer narrow. “

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