The nation’s capital could soon join the latest wave of state and local jurisdictions with pay transparency laws aimed at reducing income disparities, which government data suggest are worse for Washington, D.C.'s workers of color than in nearly every state.
Proposals pending at the Council of the District of Columbia would require employers to include a salary range in job postings and restrict their use of a job applicant’s prior salary history in setting their pay.
The job posting requirements mirror those spreading across the country from New York to Hawaii, as lawmakers try new strategies to close longstanding pay gaps for women and racial minorities.
“We’re trying to use as many tools as we can to equalize the job playing field,” said D.C. Councilmember Anita Bonds (D), a sponsor of the D.C. legislation.
The council is considering a trio of related bills, but it will likely merge them into a single pay equity measure later this year, according to Bonds.
Councilmembers will have to decide on details such as how the law would apply to jobs performed outside D.C. for employers that are based there.
New York City’s ordinance, for example, only covers jobs performed inside the city, while the statewide New York law also covers jobs performed outside the state but answering to a New York-based supervisor or office.
Potential Impact
Along with New York City, California, Colorado, and Washington state are already enforcing mandates to advertise pay ranges, and similar laws will take effect in New York state in September and Hawaii in January. An Illinois bill awaits the governor’s signature.
A handful more states require companies to provide salary information to job applicants upon request or at specific points in the hiring process.
Bans on employers demanding salary histories from job candidates are more widespread, and initial research suggests gender and racial wage gaps have shrunk in states that have these bans in effect.
Worker advocates and policy analysts see the potential for the latest pay transparency laws to close wage gaps more effectively than past efforts, although it’s early to tell.
A mandate to include a salary range in job ads would help combat the wage gap for workers of color as long as it requires a truly “good faith” salary estimate and includes a clear enforcement mechanism, D.C. Council staff wrote in a racial equity impact analysis for one of the bills.
The salary range postings target not only the problem of pay disparities within the same or similar jobs, but also the “opportunity gap” in which women and workers of color are less likely to get hired into high-paying jobs, said Christine Hendrickson, a vice president at Syndio, which provides technology and services for pay equity audits.
“We know that pay discrimination thrives in the shadows, and pay range transparency sheds light on these pay practices,” said Da Hae Kim, state policy senior counsel at the National Women’s Law Center, who submitted written testimony in favor of the D.C. legislation.
Still, policymakers looking to end the pay gap are likely to go beyond job ad laws and enact pay data reporting requirements, similar to the EU’s new pay equity directive, Hendrickson said. The EU directive requires large employers to publish data on their gender pay gaps.
“There is something to the adage that what gets measured gets done,” she said, pointing to a study on the effectiveness of mandatory pay data reporting at shrinking pay gaps and leading to more women promoted into senior roles.
The US Equal Employment Opportunity Commission previously required pay data reporting based on gender and racial demographics and may revive the mandate. California also requires pay data reporting, but stopped short last year of expanding its law to make the data publicly available.
Persistent Pay Gaps
The gender pay gap has narrowed, but it stillremains 60 years after Congress enacted the federal Equal Pay Act. Female workers’ average income in 2022 was 83 cents for every dollar the average male worker made, according to the Bureau of Labor Statistics.
Looking only at the gender pay gap, D.C. compares favorably to the rest of the country, with women making about 85 cents for each dollar of income that men receive.
But the district’s pay gaps are much worse for workers of color and especially women of color, according to an analysis of government data by the National Women’s Law Center.
For instance, Black women who work full time in D.C. make 52 cents for each dollar White men make, among the worst gaps relative to the 50 states and well below the national average of 67 cents. When including part-time and seasonal workers, those gaps get worse with Black women making 41 cents on the dollar in D.C. and 64 cents nationally.
“D.C. has a unique labor market with salaried professional workers who are more likely to be White and low-paid service workers who are disproportionately workers of color,” Kim said.
Although those workforce demographics are common in many metro areas, the racial wage gaps for D.C. might be more extreme than most states because D.C. doesn’t include the mix of urban, suburban, and rural areas that factor into most statewide data, she said.
The dominance of the US government as D.C.'s largest employer hasn’t necessarily helped.
“Given the federal government has relatively transparent and defined pay scales for its jobs, one might expect that to translate into a more modest racial wage gap in D.C. But that’s not the case,” Hendrickson said. “Racial gaps in more senior-level government roles and fewer Black and brown workers in more highly compensated roles in the federal government are reflected in these large racial pay disparities.”
Culture Shift
The details of what’s required under pay transparency laws vary, with many mandating only a salary range while some including Colorado and Washington state demand information on employee benefits and other compensation such as bonuses also. D.C. Council staff are studying their options, Bonds said.
The mandates come alongside a growing acceptance and expectation of pay transparency. Data from job search site Indeed in March showed more than 40% of job ads included a salary range, and major employers including Alphabet Inc.’s Google, Citigroup Inc., and Microsoft Corp. have said they will include salary ranges in all US job ads going forward.
D.C. resident Hannah Williams found enough public interest in pay transparency to quit her six-figure-salaried job as a data analyst and focus full time on creating social media content under the brand Salary Transparent Street.
She favors the D.C. Council pay equity proposals, but with the caveat that they should be crafted in a way that prevents employers posting overly wide pay ranges as some New York City employers have.
“If your range differs more than probably $30,000 to $40,000 from minimum to maximum, it’s not helpful,” Williams said. “In the future, companies should realize that trying to skirt these laws shows that you’re a bad actor in this discussion and it’s not going to help you attract people.”
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