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The new age of pay transparency

Author

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  • Trotter, Richard G.
  • Zacur, Susan Rawson
  • Stickney, Lisa T.

Abstract

A new age of pay transparency began on January 11, 2016, when Executive Order 13665 took effect. Applying to employers who have contracts valued over $10,000 with the U.S. government, the order prohibits them from retaliating against employees for disclosure and discussion of compensation information. This effectively increases pay transparency for an estimated 20% (28 million workers) of the labor force. As a result, the difference in pay between men and women and between white and minority employees is now under increased scrutiny. This article aids employers in this new era of heightened attention to their compensation practices. We begin with an overview of the current dimensions of pay gaps in the U.S., providing a societal level perspective. Pay transparency is emphasized as a means to help narrow earnings gaps at the firm level. Legal, regulatory, and social aspects of pay disclosure are discussed and employers currently using pay transparency are highlighted. We also present management responsibilities and practices for the new age of pay transparency.

Suggested Citation

  • Trotter, Richard G. & Zacur, Susan Rawson & Stickney, Lisa T., 2017. "The new age of pay transparency," Business Horizons, Elsevier, vol. 60(4), pages 529-539.
    • Handle: RePEc:eee:bushor:v:60:y:2017:i:4:p:529-539
    DOI: 10.1016/j.bushor.2017.03.011
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    References listed on IDEAS

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    Cited by:

    1. Michael Baker & Yosh Halberstam & Kory Kroft & Alexandre Mas & Derek Messacar, 2023. "Pay Transparency and the Gender Gap," American Economic Journal: Applied Economics, American Economic Association, vol. 15(2), pages 157-183, April.
    2. Agnieszka Barczak & Izabela Dembińska & Tomasz Rostkowski & Katarzyna Szopik-Depczyńska & Dorota Rozmus, 2021. "Structure of Remuneration as Assessed by Employees of the Energy Sector—Multivariate Correspondence Analysis," Energies, MDPI, vol. 14(22), pages 1-16, November.
    3. Srikant Devaraj & Pankaj C. Patel, 2022. "State bans on pay secrecy and earnings: Evidence from the National Longitudinal Survey of Youth 1997," British Journal of Industrial Relations, London School of Economics, vol. 60(4), pages 697-734, December.
    4. Matthew Caulfield, 2021. "Pay Secrecy, Discrimination, and Autonomy," Journal of Business Ethics, Springer, vol. 171(2), pages 399-420, June.
    5. Uka Ana & Prendi Ardita, 2021. "Motivation as an indicator of performance and productivity from the perspective of employees," Management & Marketing, Sciendo, vol. 16(3), pages 268-285, September.
    6. Heisler, William, 2021. "Increasing pay transparency: A guide for change," Business Horizons, Elsevier, vol. 64(1), pages 73-81.

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