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New York City requires employers to list a salary range for posted job advertisements

AILSA CHANG, HOST:

How much do you make? Is it more than your colleagues? Do you even know? Well, starting today, a lot of New Yorkers will know. You see; New York City joins a handful of places across the country, like here in California and Colorado, that require companies to post salary ranges for every position they post. NPR's Stacey Vanek Smith talked to a couple of business owners who've already made the switch.

STACEY VANEK SMITH, BYLINE: Trey Ditto is the CEO of a New York-based PR firm, and he's a bit ahead of the curve. About six months ago, he made the salary ranges of all of his positions public.

TREY DITTO: I was sitting in my office. And my wife, who runs a company with me, told me that it's live. And it was like - it's like a roller coaster. Like, you know it's going to be a little bumpy, but you know it's going to be all right.

VANEK SMITH: Ditto says he prepared for that moment for a couple of years, looking at everyone's salaries, making adjustments. And even though he'd overseen all those salaries, he was surprised to find a lot of inequity in pay.

DITTO: I mean, we were just guessing. And there is no way that, like, bias didn't seep in.

VANEK SMITH: Statistically speaking, women, people of color and LGBTQ workers are paid less - often 20, 30, 40% less than white male colleagues. They also tend to ask for raises far less often. Ditto said hiring and pay had happened on a pretty individualized basis. He'd find a worker he wanted and try to make a deal. When he actually looked at the data, it was striking.

DITTO: I looked at that X-Y axis, and I saw that some people were overpaid. And I saw some people were underpaid. And I'd say that the people that had the lowest salaries were women. And loud white men shouldn't get paid more than, like, a soft-spoken woman.

VANEK SMITH: Ditto says when things are public, you have to create concrete rules, rules that apply to everyone. And then you have to have a lot of conversations where you explain those rules.

DITTO: Money is always a tricky conversation because someone's going to - someone sees that salary range, and they say, I'm at the low end of this range. And I want to be at the top end of the range.

VANEK SMITH: Have you lost workers over that?

DITTO: Yes. Yes, we have.

VANEK SMITH: But more often, says Ditto, there are conversations about how people can improve, how they can get where they want to go, conversations that are easy to avoid if you don't have to have them. Ditto says the change has been difficult, time consuming and expensive. But he says workers have become more productive, and retention has gone up.

DITTO: The more information the employee has, the more likely they are to work even harder and be more productive because if I can see the top of the mountain, then I know that I can get there.

VANEK SMITH: Pay transparency laws are already in place in Colorado, California, Rhode Island, Washington state. And some employers have gone a step further. Molly Moon Nietzel owns a chain of ice cream shops in Seattle. She has around 200 employees. About five years ago, she started making the salaries of every single worker visible to all employees. Nietzel says for more than a year and a half, she and her team prepared for that moment. She actually sat down with everybody.

MOLLY MOON NIETZEL: I sat down and had coffee with all of our employees that fall, which was 88 coffee days in two weeks. I was very...

VANEK SMITH: Why did you do that?

NIETZEL: ...Caffeinated. Well, because a lot of people - because we were messing with people's pay, and that's really sensitive.

VANEK SMITH: Moon says she's glad to see these laws happening in New York City and elsewhere, though she's not surprised there has been some resistance.

NIETZEL: The people in power want to stay in power. That's not surprising. That's American history.

VANEK SMITH: Also not surprising - companies finding lots of loopholes in the new rules. For one thing, the salary ranges aren't hard and fast, employers can stray outside of them. Also, other forms of compensation, like bonuses, don't have to be disclosed. Stacey Vanek Smith, NPR News. Transcript provided by NPR, Copyright NPR.

Stacey Vanek Smith is the co-host of NPR's The Indicator from Planet Money. She's also a correspondent for Planet Money, where she covers business and economics. In this role, Smith has followed economic stories down the muddy back roads of Oklahoma to buy 100 barrels of oil; she's traveled to Pune, India, to track down the man who pitched the country's dramatic currency devaluation to the prime minister; and she's spoken with a North Korean woman who made a small fortune smuggling artificial sweetener in from China.