Navigating the Practical Complexities of Pay Transparency: Implications for Employers and Public Policy

Abstract

While governments around the world have adopted policies and regulations making pay more transparent, pay transparency continues to be a contentious issue. Proponents argue that greater transparency is more consistent with the ethical underpinnings of humanistic societies and likely to benefit employees, employers, and/or society. In contrast, opponents highlight the ethical challenges that transparency may pose to personal privacy, as well as its potential social, psychological, and economic risks for stakeholders. Despite mixed beliefs, there may be some transparency-related shifts that most stakeholders welcome, or at least accept, as well as reforms whose benefits likely outweigh particularistic stakeholder costs, offering society-wide, longer term utility. We first discuss steps that policymakers and leaders may take that are likely to have positive implications for both labor and management while minimizing unintended, negative consequences and then review recent public policy interventions already adopted, as well as additional interventions to be considered for future adoption.