What new pay transparency laws mean for PR agencies

Firms are working to achieve pay equity, and the laws could help. Here’s how agencies can navigate the challenges of new salary transparency legislation.

Experts say the pay transparency law will improve diversity in the PR industry. (Photo credit: Getty Images).

NEW YORK: PR firms are gearing up for New York City’s pay transparency law, effective on Tuesday, which will require most regional businesses to post a salary range or hourly wage on job postings. 

Kim Sample, president of the PR Council, said that salary transparency is good for the industry, and that more than 70% of her organization’s member agencies have hired external consultants to conduct pay audits. 

However, she said that a challenge for firms is finding the correct salary ranges, especially in the wake of the “great resignation,” when agencies felt they were being “held hostage to pay higher salaries than perhaps the experience and skills warranted.”

“[Firms] do worry about employee reaction,” she said, predicting that many firms will only advertise salary ranges on positions they are recruiting for. 

A lot of firms are working top-down, Sample said, preparing managers and clients to have conversations with staffers about compensation. She added that due to resources such as Glassdoor and PRWeek’s Salary Survey, many people are well-educated about their pay range. 

“I don’t think [compensation transparency] is going to cause huge consternation across the industry,” Sample said. “When we talk to firms that have launched pay transparency and anticipated a lot of employee questions and concerns, they say it’s gone over so well.”

Sharon Cohen, partner at law firm Davis+Gilbert, has been working closely with PR clients to navigate the upcoming law. She said the law is the “perfect opportunity” for agencies to conduct pay equity reviews, which many have done. 

According to Davis+Gilbert’s 10th annual PR industry report, 46% of surveyed firms undertook pay audits in the last year to evaluate equitable pay practices by gender, race or other criteria. 

“This law is an additional reason and impetus to do [a pay equity review] because now the information can be public, your current employee population can see it and that could raise concerns from both a morale and legal perspective,” Cohen said. 

Cohen highlighted other potential hurdles, such as range discrepancies amongst competing agencies, which may cause recruitment and retention issues. 

“We could potentially see sort of a race to set the standard for a particular position,” Cohen said, adding that agencies also must consider location, market differences, years of experience and clientele. 

Wage transparency legislation has passed in other states, including California, Colorado, Connecticut, Maryland, Nevada and Washington. Pay-transparency laws in California and New York, Cohen said, only require the minimum and maximum salary range, excluding other forms of compensation like discretionary bonuses. 

“While there’s no legal requirement under the NYC law to include that, there’s going to be a discretionary bonus, I have heard of a number of employers considering including that in their postings because they think it will make [the position] more enticing,” Cohen added. 

Certain states, including Colorado, have salary transparency bills that require employers to include more general details about compensation and benefits, Cohen noted. 

“Employers in the PR industry, and employers in all industries, have remote employees around the country. They just need to be sensitive to complying not only with laws in states where they have their primary offices, but also in states where they have remote employees as well,” Cohen advised. 

In April, a month before NYC’s salary transparency bill was scheduled to go into effect, local businesses pushed back. Some organizations said the law would hinder diverse hiring efforts

Sample said she anticipates pay transparency to be a positive force for diversity in the communications industry, helping demonstrate how profitable working at an agency can be. 

“The more transparent we can be about the earning potential in this industry, the more we can attract talent in general, but especially diverse talent, who typically come into the workforce with some different economic pressures than white talent,” she added. 

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