Illinois Wins Salary Transparency! How It Will Benefit Working Women — and Employers!

By Sharmili Majmudar, Executive Vice President of Policy, Programs, and Research, Women Employed

Women Employed celebrated the signing of Illinois’ salary history ban into law in 2019, making a significant step towards closing the gender wage gap. While employers can no longer ask how much you made in a previous job, they can still ask what your salary requirements were, and that’s where the new salary transparency law―just signed on August 11th―comes into play, giving us another tool for advancing pay equity (and getting you paid fairly!). Here’s why, and how:

A typical response to the gender wage gap that I hear is that “women just need to learn to negotiate.” Although I agree that everyone should be taught negotiation skills, treating negotiation as a silver bullet to an issue driven by a lack of transparency and a good dose of bias simply misses the mark.

While it’s true that women are less likely to negotiate for higher pay than men when they receive a job offer (I myself didn’t negotiate my salary and benefits until I was well into my career), research shows that pay negotiations can be particularly unfavorable to women: Harvard and Carnegie Mellon researchers found that women are penalized in contrast to men for negotiating compensation, because they’re seen to be “not nice and overly demanding.” Women are also typically coming from roles where they are paid less, and often expect and accept less than their equally qualified male counterparts. Since it is a common practice for job applicants to ask for an amount that is a 10 to 20 percent increase over their prior salary, and women are already paid less than white men in the same roles, they would have to ask for a much larger increase over their current pay to “catch up” to what their white male counterparts make. Studies also show that Women of Color, who experience the largest wage gaps, state dramatically lower minimum salary requirements than white men, white women, and Men of Color. One job search platform found that for every role― regardless of level of experience―women set their minimum salary 7 to 20 percent lower than men! Finally, putting the burden on individual workers to address pay disparities through negotiation is hardly a comprehensive―or fair―solution. You get where I am going here: when employers don’t provide job applicants or employees information about pay, women lose out.

Fortunately, there is also evidence that when we correct the power imbalance between employers and employees, and give job applicants the information they need―including pay ranges―they request fair pay. Having information about the pay range also provides context and reduces the gender differences in the outcomes of negotiation (you know more about what to ask for!). Pay transparency doesn’t just benefit higher income earners in professional roles―it also increases wages for low-paid workers, who are disproportionately women and people of color. And the fact that unionized jobs and positions where pay structures are transparent, such as public sector jobs, have much narrower gender and racial wage gaps underscores the evidence that transparency helps to reduce disparities in pay.

Plus, businesses are already reaping the benefits of being early adopters of salary transparency in key ways:

• Sharing a salary range at the start of the hiring process helps streamline pay negotiations later, saving time, resources, and effort on both sides.
• Pay transparency can ensure that every employee is being paid fairly, and promote employee trust, job satisfaction, loyalty, and productivity.
• Mandates to post salary ranges also prompt employers to proactively review and evaluate their compensation practices and address any unjustified disparities between employees.
• Publishing pay ranges attracts talent (and not providing that information turns job applicants off):
  ⟹ A ResumeBuilder.com survey found an overwhelming majority (85 percent) of workers are more likely to apply for a job if the pay range is listed.
  ⟹ A Monster.com survey found more than half of respondents would refuse to even apply for a job that does not disclose the salary range.
  ⟹ Pay range transparency is especially crucial for attracting Gen Z talent. Adobe’s Future Workforce Study of upcoming college seniors and recent college graduates revealed 85% are less likely to apply for a job if the company does not disclose the salary range in the job posting.

That is what we call a win-win!

Women Employed’s relentless work to advance pay equity has included legislative advocacy, employer policies and practices, and outreach and education since our inception 50 years ago. At the state level, WE has championed equal pay legislation, including the Illinois Equal Pay Act of 2003, the No Salary History bill in 2019, and this new Salary Transparency law. The Illinois law, which goes into effect on January 1, 2025, requires that employers with 15 or more employees disclose pay scales and benefits in job postings and to announce and post all promotion opportunities to current employees within 14 business days of posting the job externally.

In the recent Illinois FARE (Fostering Access, Rights and Education) Grant Project, where WE served as lead partner with the Illinois Department of Labor and other community partners, we learned that the majority of women in Illinois did not know their rights to equal pay. This is where you come in―when January 2025 rolls around, we will be counting on you to join us in spreading the word on salary transparency. And in the meantime, go to www.equalpayillinois.org to learn more about the equal pay rights you already have in Illinois―and share widely!