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As of 2023, women who worked in full-time, year-round positions earned 84 cents to the dollar when compared to their male counterparts; for racial minorities, the discrepancies were even more stark, with Hispanic and Black women taking home roughly 59% and 66%, respectively, of the weekly earnings of White men. More recently, the movement to rectify historical gender- and race-based pay gaps has devolved to the states and local municipalities which complicates hiring practices for managed care organizations with operations in multiple locations.
Following a wave of salary history bans that went into effect in the years preceding the Covid-19 pandemic – almost two-thirds of states now prohibit private employers like managed care organizations and their subsidiaries from asking applicants about their salary history. Similar bans have proliferated at the local level, with advocates of pay equity now pushing for laws that require employers to disclose salary ranges and other compensation and benefits information in job postings.
While significant progress has been made to reduce characteristic-based salary differences, pay transparency laws are the latest resource for prospective employees to level the playing field. Although only a handful of states and local municipalities currently require such disclosures, at least four statewide laws in Illinois, Massachusetts, Minnesota and Vermont will come online in 2025. Whereas some states, such as Connecticut, require only that an employer disclose the position’s salary range upon an applicant’s request or before or at the time of an offer, other states, including California and New York, require employers to list this information on job postings, even when hiring is outsourced to third-party employment agencies. Payors that operate within these states should review hiring practices and educate their recruiting teams to ensure that they are within compliance.
While a nationwide pay disclosure mandate or salary history ban does not currently exist, the winds of change may be coming, as multiple bills have been put forward and rules proposed over the last two years. For instance, the federal Department of Labor’s Office of Federal Contract Compliance Programs issued guidance in 2024 underscoring the agency’s position that wage history is not a legitimate, job-related factor that could justify race- or gender-based salary differences. Perhaps most notably, a bill was introduced in the 118th Congress that would amend the Fair Labor Standards Act to require employers to provide salary ranges to job applicants and divulge pay scales to current employees for their role. Although the Salary Transparency Act remains in committee, it is representative of a broad shift in policy priorities that may one day culminate in a national standard.
- Statewide pay transparency statutes are spreading, with several effective in 2025, often paired with salary history bans to promote pay equity
- Compliance complexities increase for multistate employers due to varying state and local pay transparency laws and salary history bans
- Managed care employers may benefit from compliance by improving perception, attracting diverse candidates, satisfying ESG investors, and reducing class action lawsuit risks