This story has been updated.
Soon after former New York City council member Helen Rosenthal (D) started her first job in city government in the late 1980s, she had a conversation with a colleague that she would remember for decades to come, she said.
The colleague — who Rosenthal said was a White man with the same title as her, a unit head in the Office of Management and Budget — told Rosenthal how much he was making: $5,000 more than her yearly salary, she said. (Adjusted for inflation, $5,000 in 1988 translates to more than $11,700 today.)
“He told me what his salary was, and I said, ‘Gosh, that’s more than mine.’ And he said, ‘Well, I told them, I have a family to take care of.’ And that did not sit right with me,” Rosenthal told The Lily.
She brought the discrepancy to human resources, and they “immediately increased my salary to the same amount” as her male colleague, she said.
That experience — coupled with the eight years she spent in a city council that remained male-dominated until this year, when Rosenthal’s tenure officially ended — inspired her to author a bill mandating that New York City employers with four or more employees incorporate into job listings the salary range they’d pay “in good faith” for the role. The council passed the bill last month, and it became law on Jan. 14.
The legislation is part of a wave of similar pay transparency bills that have recently passed throughout the country: Last year, Colorado instituted a law requiring employers throughout the state to include compensation — defined as salary, benefits and bonuses — in job postings. Since 2019, Maryland, Rhode Island, Washington, California, Nevada and Connecticut have also passed state laws that, in various ways, codify workers’ rights to pay transparency during the hiring process. Similar legislation has also been introduced in Massachusetts and Pennsylvania.
Experts characterize the bills as key tools that, coupled with other pay equity policies, can help combat the gender wage gap for women job-seekers and workers.
“It does chip away at issues around pay inequity, [and] can go a long way towards closing the pay gap,” C. Nicole Mason, president and chief executive of the Institute for Women’s Policy Research, said of the New York City bill and similar ones.
Part of how they could do so is by leveling the playing field so that “no secrets are allowed between workers,” according to Teresa Ghilarducci, professor of economics at the New School for Social Research in New York City.
“The idea is that if there are no secrets, then every worker has a lot more bargaining power,” Ghilarducci added. “And that will lead to equity because women and non-White men have had less power in getting higher wages because of just endemic power relationships that already exist.”
For employers, Mason added, pay transparency laws can be “another tool in their arsenal to be able to take a step back and examine their hiring practices and protocols, and make sure that they're fair and equitable.”
In 2021, women workers across the country earned an average of 83 cents for every dollar earned by White men, with Black and Latina women facing even wider wage gaps, according to the National Women’s Law Center, which also notes that a 2008 study found that transgender women’s earnings fell by nearly one-third after they transitioned. Native American and some Asian American and Pacific Islander women also face larger wage gaps than the national average, according to the NWLC. There is no federal data on how the wage gap impacts nonbinary people.
The bill faces some criticism. Council member Joe Borelli (R) characterized the bill as “an unnecessary interference in a contract negotiation.” Kathryn Wylde, the president and chief executive of Partnerships for New York, an organization focused on private-public sector partnerships in the city, called the bill too broad.
But Rosenthal sees the extra effort required on the part of employers as both marginal and necessary: “I think the benefits outweigh the inconvenience of employers,” she said. “If it’s going to result in closer pay equity for women, I think it’s worth the inconvenience.”
Bev Neufeld, president of PowHer, a network of more than 100 organizations focused on economic equity for New York women that helped craft Rosenthal’s legislation, agrees: Pay transparency “creates an atmosphere of trust and openness that job seekers … really are craving — they want to work for companies that are fair,” Neufeld said.
A 2015 study published in the journal Industrial Relations found that states that have outlawed pay secrecy have reduced gender pay gaps and higher overall earnings for both men and women.
Nearly half of full-time American workers surveyed by the IWPR in 2017 and 2018 reported that they were discouraged or prohibited from discussing their salaries, with public-sector and unionized workers less likely to be subject to such restrictions than private-sector and non-unionized workers. Women were more likely to both work under a pay secrecy policy and to violate a formal pay secrecy policy, the IWPR report notes, adding that that’s likely due to “loopholes in and weak enforcement of” the National Labor Relations Act, which protects workers’ rights to discuss their pay.
According to Mason, this data underlies the need for “a bundle of policies” to move the needle on closing the wage gap — which would ideally include legislation that collects pay data from companies and protects employees’ rights to discuss their salaries, in addition to policies that mandate pay transparency during the hiring process, she said.
Progress has also come on those fronts in recent years. Since 2010, more than a dozen states have adopted legislation banning pay secrecy rules in the workplace, according to the IWPR report. Since 2016, 14 states — including New York — have passed legislation prohibiting employers from seeking applicants’ salary histories, according to the NWLC. In 2020, California passed a law requiring employers with 100 or more employees to submit annual pay data to the state Department of Fair Employment and Housing outlining employee compensation based on sex, race, ethnicity and job category; Illinois passed a similar law last year. More than a dozen states have also passed laws in recent years protecting employees who discuss their pay, according to the NWLC.
Mason sees the federal Paycheck Fairness Act as a more ideal solution than a state-by-state approach. The bill, which has been languishing in Congress since it was first introduced in 1997, would strengthen the Equal Pay Act of 1963, in part by prohibiting employers from asking about or relying on salary history while hiring, protecting employees from retaliation for talking about their pay, and requiring employers to report gender- and race-based wage gaps to the Equal Employment Opportunity Commission, according to the NWLC. The House passed the bill again last spring, but the Senate refused to put it up for a vote.
But policies alone aren’t enough to stymie the sexism that contributes to the wage gap, Mason and Ghilarducci said.
The New York City bill “doesn’t solve occupational segregation” — or the overrepresentation of women in lower-paying jobs — Ghilarducci said, nor will pay transparency bills necessarily make women more successful in negotiating, she added. Research shows women are both less likely to initiate salary negotiations and less successful in salary negotiations than men are, due to a combination of deeply ingrained gender roles and stereotypes rooted in sexism.
Nonetheless, pay transparency legislation is an important step towards closing the pay gap for women workers, according to Mason: “Policy and culture change go hand in hand,” she said.
Rosenthal and Neufeld agree. Rosenthal hopes New York City’s new women-majority council will continue to build on her bill by adding amendments to it, including one requiring bonuses and benefits to be included in New York City job postings in addition to salary ranges. And Neufeld and the team at PowHer are supporting bills in the New York state legislature that would mandate disclosures of compensation — including benefits — in job postings statewide. Given that women are the breadwinners for 54 percent of households in New York state, according to IWPR data, PowHer members see the bills as crucial, Neufeld said.
Rosenthal’s late mother, a sociology professor at the University of Michigan, was also a breadwinner of her household, she said. As a result of her mother’s successful career, Rosenthal said, she has been inspired to demand equality — both on that day she said she marched to HR to report a wage gap in her first job, and when she wrote the bill the council passed last month.
“I grew up in a household where there was no differential treatment between the boys and the girls,” Rosenthal said. “It’s really sort of in my bones.”