Salary Disclosure, Pay Transparency Mandates Gain Traction

Legislative leaders are pushing a pair of costly new workplace mandates that originated in the Labor and Public Employees Committee for votes in the state House and Senate.

HB 6517, which requires all employers to include salary ranges in job postings, and HB 7197, mandating an analysis of all paycodes, place heavy administrative burdens on businesses.

HB 6517 requires the inclusion of salary ranges in internal and external job postings, along with an overview of specific benefits associated with each position.

The bill mandates a one-size-fits-all approach and requires regular updates of job postings and internal salary disclosures to reflect changes in compensation structures, budgeting constraints, and market conditions.

Additional compliance costs could force employers to reallocate resources away from employee benefits, training, or hiring.

Compensation Packages

Several employer organizations, including the Insurance Association of Connecticut, testified in opposition to the bill before the Labor Committee acted. 

“By mandating salary range disclosures, the bill limits employers’ ability to negotiate competitive compensation packages tailored to individual candidates’ qualifications and experience,” said the IAC’s Eric George.

“The bill limits employers’ ability to negotiate competitive compensation packages.”

IAC’s Eric George

“Many businesses determine salaries based on various factors such as skills, performance, and market demand.

“Publicly posting rigid salary ranges may discourage talented candidates from applying if they perceive the listed salary as non-negotiable, even when employers might be willing to offer a more competitive package.”

Costly, Redundant

Under HB 7197, employers must post a detailed analysis that defines all paycodes used to determine salary and benefit information for all positions within a company.

The analysis must provide an explanation of codes used for straight time, overtime, and any pay differentials, including, but not limited to shift differentials, on-call pay, hazard pay, call-back pay, and holiday, weekend, or geographical pay differentials.

Most employers contract with a third party to manage payroll and compensation platforms, notably larger companies with hundreds to thousands of differentiating paycodes.

“Both these bills make it more difficult to do business in Connecticut, notably for smaller employers.”

CBIA’s Paul Amarone

The mandate likely will require additional investments in payroll technology, posing cost increases and leading to additional administrative burdens in order to comply with the new law.

The pay transparency bill that took effect in 2021—covering all Connecticut businesses with one or more employee— already requires employers to provide prospective and existing employees with information regarding equal pay for comparable work, wage range transparency, a salary history ban and freedom to discuss wages with others without fear of retaliation.

“Both these bills make it more difficult to do business in Connecticut, notably for smaller employers, who have limited staff and resources to dedicate to complying with these one-size-fits-all mandates,” said CBIA’s Paul Amarone. 

Both HB 6517 and HB 7197 could be called for a vote in the state House at any time from now until the legislative session adjourns on June 4. 

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For more information, contact CBIA’s Paul Amarone (860.244.1978)