Comment by dom96

3 years ago

At this point is there any disadvantage to legislating that all companies should share a transparency report where they list their levels + avg, min, max, median salaries for each level?

178 comments

dom96

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dataking  3 years ago

Lots or reporting requirements only take effect once a firm reaches a certain size. This makes a lot of sense given that tiny firms (say less than 10 employees) may not have formalized wage scales, in-house administrative staff, and have a harder time amortizing compliance costs. So yes, there are disadvantages to consider.

sokoloff  3 years ago

I’m opposed to disclosure laws that would be prone to expose the income of individual people.

If Alice is the only SWEPR5 at a company, that proposal publishes her salary. If Bob is clearly the best SWEPR4, Cathy the middle, and Dave just barely got promoted to that level, their salaries are also individually published.

I don’t object to good faith ranges being required in job listings, but I oppose anything that would tend to publish an individual’s data that they should be able to keep private.

(That’s before even getting to the fact that salary is nowhere near the full compensation picture.)

  • candiddevmike  3 years ago

    Did you know there are some countries where you can look up anyone's income?

    • occz  3 years ago

      Taxable income is public information in Sweden, and you can basically buy a catalog containing the previous years income for everyone in a given area if you'd like.

      Stuff like addresses and so on is also public information in Sweden, for what it's worth. This always makes me feel a bit strange when hearing people considering releasing someone's address to be doxxing and something horrible - like you can just look up any person in Sweden, and the societal consequence is that literally nothing happens. Same with the incomes, nothing whatsoever happens from having this be public.

      16 replies →

  • jachee  3 years ago

    Management is the only one who benefits when labor doesn’t openly share salary information. Let the information flow. Knowledge is power.

  • wdb  3 years ago

    Transparency also helps to find out that you the foreigner gets paid less

  • figmert  3 years ago

    Why shouldn't Dave and Cathy know what Bob is earning? They're the same level, they should earn the same.

    • lotsofpulp  3 years ago

      While I support all efforts at increasing information transparency, I disagree that prices need to be the same. It is possible that humans are sufficiently different in the quality of the labor they are selling that a buyer might price them differently.

      For example, I am willing to pay a higher price for someone has 10 years of experience and is less likely to make mistakes or other desirable qualifies more than someone who has 0 years of experience, even though they are doing the same work.

      9 replies →

    • HelloMcFly  3 years ago

      They're at the same level, but maybe not doing the same job. Even if they're nominally in the same "job code" the actual mechanics of what they are doing, the sensitivity of their work, the skills required for success, the markets/industries they are operating in, the pay scale where they live, the level of functional support they are receiving may all be substantially different. Of course there may also be other decisions such as upping salary to entice an employee not to accept that other job offer they got (do you want to remove pay leverage of looking for jobs elsewhere by mandating same salaries?), or any such other consideration.

      Individual pay isn't some 2+2=4 math equation, it's multifactorial. Now any company with good internal controls would have people in some sort of band where for comparable (not identical) work there's a range of normalcy relative to the value the work provides in the given markets the labor is occurring.

      4 replies →

    • dfxm12  3 years ago

      It's a matter of perspective.

      From a worker point of view, being open about what we're earning will help bring to light if we're being exploited.

      From a business owner point of view, employees having this knowledge disturbs the power imbalance employers enjoy when it comes to compensation negotiations.

      I think more people than you'd expect in HN are in the latter camp. This site was launched as Startup News, after all.

      4 replies →

    • c0pium  3 years ago

      Everyone at the same level is not the same. At most companies people can expect to be in level for a few years.

    • geertj  3 years ago

      Pay scales are ranges not points. You want to be able to reward good performers higher than lesser performers, even in the same level, so that the incentives are aligned. Promotions to a next level are part of this but those only happen every few years for most people.

    • pelasaco  3 years ago

      That's communism. In companies, one's salary is related with his/her output or salary negotiation skills.. Dave, Cathy and Bob could be in the same level, where the salary range fluctuates between 60k - 95k. Who is where, depends of the both factors mentioned above.

    • pc86  3 years ago

      > They're the same level, they should earn the same.

      No, they shouldn't. They should earn exactly as much as they can get their employer to pay them. I've worked hard in my career, I've negotiated hard for pay at new jobs, raises, bonuses, promotions, etc. Some people don't. If I'm not going to be able to negotiate my pay, by definition I'm going to be making less. Why in the world would I want that?

  • pc86  3 years ago

    Salary is about 90% of the compensation picture for almost everyone in the US. If you add in things like 401(k) matching and employee-paid insurance premiums, you've got about 99% of the picture covered (in addition to having something far too complex to publish on any individual level). The vast majority of companies offer no stock, no or minimal/token bonuses, and no perks with any real financial value.

  • quietbritishjim  3 years ago

    > If Bob is clearly the best SWEPR4, Cathy the middle, and Dave just barely got promoted to that level ...

    I think you're making a big presumption that the "clearly the best" gets the most income!

    (Although the more usual argument against transparency proposals is that everyone thinks they're "clealry the best" so all except the highest paid would be annoyed.)

  • OsrsNeedsf2P  3 years ago

    Why would it matter if Alice was the only one or not? Disclosure laws inherently expose the income of everyone

    • sokoloff  3 years ago

      If there are 100 SWEPR5s in the proposal above, Alice's nosy co-worker or neighbor only learns the range of Alice's salary.

      If Alice is the only one, they learn the precise value.

      17 replies →

DecoPerson  3 years ago

This significantly disadvantages good money.

Good money being: any company that tries to do things properly (or, relatively properly).

Bad money being: profit, profit, profit. Take risks and misreport. Don’t put anything in writing. Pay bonuses under the table. Etc etc etc.

Not only does the good money need to spend a lot more money to comply, they also wind up wasting a lot of money on “fake” compliance or “over-“ compliance. For example, insurance companies often find ways to make companies insure the same risk multiple times. Or consultants over-analyse and say “This whole thing is a risk for your company. It needs to be fixed. I can do it for you.”

Good money will pay consultants to prepare excruciatingly detailed salary transparency reports, and they’ll live with the cost of their honesty (“you pay women less than men!!!! it doesn’t matter that your state has very few qualified women in that field!!! pay them all the same!!!”).

Bad money will do just enough to be compliant, and they’ll fudge the numbers (with sneaky fringe-benefit bonuses to their employees so they don’t care).

  • velcrovan  3 years ago

    Nice theory but this hasn’t been borne out in countries where wage transparency is already the law.

  • refurb  3 years ago

    As an aside, rent is public information in Singapore, at least for private rental (not for rentals of public housing).

    Since all tenancies need to pay a stamp tax to be legit contracts, the government lists every contracts rental price on a website.

    https://www.ura.gov.sg/property-market-information/pmiReside...

    The information is specific to a unit and published monthly (e.g. if 6 units were rented out, there are 6 entries in the database). It’s quite helpful when looking for a place to rent because you can look up the exact building see what people are paying.

    The data is obscured a bit because units are described as “50 to 70 sq m”, so while you can guess if it’s a 1 bed or 2 bed, you cant tell if it has 1 or 2 bathrooms, what floor it on, whether it comes furnished or not.

    But you can look at a group of transactions that are similar to the unit you’re looking at and get of what the market rate is.

  • tycho-newman  3 years ago

    Maybe the region would have more women in the field if the companies were transparent about pay and benefits?

xvector  3 years ago

Every company I've talked to with "transparent" comp has offered absolutely terrible comp, even for their highest possible offer.

In reality "transparent comp" becomes an excuse for companies to not negotiate.

  • matwood  3 years ago

    People in general don't like to have the hard conversations where they tell Bob that Sue is better than him and she makes more money. It's easier to just normalize transparent salaries lower. If everyone is transparent it will change over time though.

    • sofixa  3 years ago

      If it's real stuff, it can easily be explained:

      > Look, Bob. Sue has made X super valuable contributions in the last quarter, and she has done A and B, and she's the expert on that special topic. That's why she's paid 3% more than you, I hope you understand. If you want to get closer to her pay salary, look into improving yourself on XY, doing more AB work, etc.

      Giving concrete reasons and targets to achieve is actually beneficial, and it can help motivate people. If there are no concrete reasons, well, then it's just pay discrimination for nothing more than gut feeling which is shitty, and Bob is right to feel bad about it.

      1 reply →

  • kasey_junk  3 years ago

    I worked for several hedge funds with transparent comp that have been some of the most lucrative of my career. If we are just throwing around anecdotes.

m0rissette  3 years ago

Wouldn’t all the companies then just conspire to pay everyone lower wages?

  • pgeorgi  3 years ago

    There are already companies collecting such information and making them available for their customers (who supposedly provide some collated data set to them in exchange). That's what all the "paying top of market rate" talk in various companies is based on.

    So: the potential for collusion already exists, but unless regular folks can get access to the analysts' data sets as well, it's a very one-sided deal.

    • kiklion  3 years ago

      You don’t even always need a third party. My wife works in HR for the government and part of her job is literally to contact neighboring counties and send them requests for their salaries for various positions and levels while filling out salary requests from other counties.

      Of course, being government, it’s all public information anyway so collaborating in this way is seen more of a performance increase vs manually accessing each counties salary information but it’s the same premise.

  • lesuorac  3 years ago

    So right now all the companies do share salary data with each other. They typically wash it through a 3rd party so it's not that blatant.

    So, a change where the companies also posted their salary data publicly would only additionally inform employees not HR. But yes tech-HR has in the past gotten in trouble over salary fixing.

  • quietbritishjim  3 years ago

    Exactly the contrary: if all wages are public, that wouldn't be possible, because only one company would have to violate that conspiracy to get all employees at other companies to start applying to them.

  • efitz  3 years ago

    No, because they need to attract employees and employees would generally not be attracted to uncompetitively low compensation packages.

    As a result, companies absolutely track how much employees of a type and level get paid elsewhere, so that they know where to aim compensation packages competitively.

    • thinkharderdev  3 years ago

      Not sure if the parent's concern is valid but I think the argument would be that companies can conspire to all suppress wages so they don't have to compete on comp. That would be hard to do now because they can't "officially" conspire in this way (eg sign a binding contract with each other) because that would be illegal. Without an enforcement mechanism it is too easy for any one company to defect from the "gentleman's agreement" and offer higher wages. If all salary information was public though, then as soon as one company defected and offered one high-value employee a higher salary everyone else would immediately know it and start competing on salary again. So that makes the informal agreement more stable and leads to lower wages.

  • barrysteve  3 years ago

    Wouldn't all the employees then just conspire to unionize around the highest paid employee?

    EDIT: forgot to mention I'm not advocating for it.

lesuorac  3 years ago

It would cause wage growth leading to a lower percent (but an increase) increase in other prices (housing, etc).