Welcome to AccelPro Employment Law, where we provide expert interviews and coaching to accelerate your professional development. Today, we are featuring a discussion with Maria Papasevastos.
Pay transparency is one of the most vexing issues faced by employment attorneys, companies and human resources executives. The rules vary from state to state, which is confusing enough on its own. It’s made doubly difficult because remote work means employers may be subject to laws in states in which they don’t operate. The legal complexities are compounded by cultural issues: Many employees are uncomfortable talking about how much money they make.
Our guest to sort through these issues is Maria Papasevastos. She is an Associate at Seyfarth who represents employers in multiple areas of employment law, including discrimination, harassment, retaliation and wage and hour matters.
We discuss the recent surge in adoption of pay transparency laws, the challenges employers face in complying with them and how years of performing ballet helped prepare Maria for a career in law. The supplemental materials and episode transcript are available below.
Interview References
Maria Papasevastos’ Seyfarth profile
3:38 | New York City Pay Transparency Law, 2022/032 (2022).
4:52 | Iacoppeta, K., Papasevestos, M., Skahan, S., Tyman, A. (2022, December 13). Pay Transparency in 2023 [Webinar]. Seyfarth Shaw LLP.
5:37 | Colorado Equal Pay for Equal Work Act, Part 2, C.R.S. § 8-5-101 et seq. (2021).
5:37 | Washington Equal Pay and Opportunities Act, RCW 49.58 (2023).
11:20 | Papasevastos, Maria et al. (2019, May 28). Massachusetts Proposed Pay Scale Legislation - Part of National Trend?. Seyfarth Shaw LLP: News & Insights.
12:58 | Toutant, Charles. (2022, September 13). What Happens When Workers Know Each Other’s Salary? We’re About to Find Out as Wage Transparency Laws Spread. New Jersey Law Journal.
Supplemental Materials
Forrest, Brett. (2021, September 29). Nevada pay transparency law takes effect Oct. 1. KOLO 8 News Now.
(2022, December 26). New York State Enacts Pay Transparency Law. JD Supra.
TRANSCRIPT
I. PAY TRANSPARENCY LAWS - A NATIONAL PERSPECTIVE
Matt Crossman, Host: Let’s start with what’s happening nationwide with pay transparency laws. There has been quite a bit of change in the last few years. Colorado, Nevada, Connecticut, Washington, Massachusetts and New York have all adopted various pay transparency laws.
What is happening and why?
Maria Papasevastos: I think this is part of an overall focus on pay equity. The start of this was a focus on beefing up state pay equity laws. For example, New York went from a standard of comparing equal work to comparing substantially similar work. The next step was salary history ban laws. Legislatures found, if we ask individuals what their prior salary is, their salary going forward is going to be based on what they were making in their prior job. That means it may start at a lower rate than what other individuals are making.
I think pay transparency is really the next step in trying to achieve pay equity generally. It’s the next tool in trying to address this overall issue of pay equity, and legislatures seem to be following on this trend as a means to address this.
MC: I mentioned states that have adopted these new laws recently. For employers, hiring managers and human resources (HR) executives outside of those states who are watching this issue, do you expect these laws to become more common?
MP: Absolutely. There are a lot of states and other jurisdictions that have pending laws or have considered laws in the past like this. And even if you’re sitting in a state that doesn’t currently have this type of pay transparency law, given the world that we live in now, with remote workers and hybrid work, there is a chance that you may be subject to these types of laws anyway.
For example, if you’re a company based out of Texas, but you have this one employee in New York City, then you’re going to have to pay attention to the New York City law, and you’re going to have to comply with it for any of your remote positions that can be performed in New York City.
So I think this is an issue that really affects a lot of employers all across the nation.
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II. THE HR PERSPECTIVE
MC: For an HR executive running a nationwide search, would it simply be easier for them to pick whatever rules are the most stringent and follow them because at some point they’re going to butt up against them?
MP: Yes. I think we’re really at that point now. In the beginning, I was hesitant to suggest that kind of approach and have the law in New York City dictating all of what you’re doing across the nation. But I think given the widespread nature of these laws, we’re at that tipping point. I have seen in my counseling practice a lot of employers considering doing that instead of a one-off approach or trying to comply with each law and each state.
MC: In a webinar on this topic, you said you’ve gotten a lot of questions from clients regarding exactly what they need to post regarding salary ranges and benefits. Let’s start with a broad view and we’ll dig deep after that. What do hiring managers and HR executives need to know and do to comply with these regulations?
MP: Generally what these laws require is for you to post the minimum and maximum salary that you expect to pay for the position, or reasonably expect to pay for the position, at the time you’re posting it.
It’s phrased in a couple different ways, but that’s the general gist of what is being required. Generally, it’s base salary. Now, Colorado and Washington have some separate requirements to provide a general description of benefits that you’re offering for the position, or a general description of other compensation.
So those types of nuances are something that people might bring into their postings anyway, to have a more nationwide approach and comply with all of the laws nationwide. And I think that makes sense from a recruiting perspective anyway. I think a lot of companies are already putting in their benefits information, or if employees qualify for a bonus or 401k. I haven’t seen too much pushback in those areas.
MC: What are some of the other challenges posed by how the rules are written? The one in Washington seemed pretty broad. You’ve written about some others that are pretty narrow, so what are some of the other challenges and how can HR executives deal with what must be some confusion about what exactly the rules say?
MP: A big question that I get is, how do you define your salary range in a nationwide search? If you are posting a remote job that can be performed from anywhere, your salary range may be very different in Texas than what you’re going to ultimately pay somebody in New York City or in California. So I think those types of questions on how to define your salary range come up a lot in my practice, and it’s really about looking at what you reasonably expect to pay for the position at the time you’re posting it.
If it’s a remote position, then maybe you do expect to pay at the low end of the Texas range and the high end of the New York City range, and that may be the most accurate representation of what you’re going to pay. But it really requires a look at what you’re going to be paying for the role.
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III. SALARY RANGES AND COMPANY SIZE
MC: A company calls you and says, “Maria, if we post our salary range, we are giving away valuable information. We feel like our compensation package gives us a competitive advantage and we don’t want to post it.” What do you tell them?
MP: We’re at the point where your competitors are in the same boat as you are.
So I get it. I get that competitive advantage point of view. I get that you want to protect your salary and what you’re paying your people, but your competitors are dealing with the same issue. And given the trends that we’re seeing, it’s inevitable that this is coming down the pipe. I generally advise companies to reframe how you are addressing this.
Maybe it could be put to your advantage. Maybe you are paying employees at the highest rate and you can use that to your advantage in recruitment. Maybe you aren’t paying at the highest rate, but you could use other parts of your package to entice people coming in. Maybe you talk about your great benefits or time off or something else.
I think you have to use it in a way that best benefits you. But given this trend, it’s something that unfortunately is inevitable.
MC: A company posts a job at $50,000 to $60,000. They get their dream candidate, and that dream candidate says, “I’m not coming for a penny less than $70,000.”
How beholden are they to the range that they posted?
MP: The jurisdictions that have addressed this have allowed that practice. If you get a stellar candidate that comes along who demands to be paid higher than what you expected the range to be, then you can go above the range. These laws really focus on at the time that you’re posting what you expect to pay for the position. So generally that’s OK. I usually caution, though, that if you have to pay above the range, I’d take a look at the range you’re posting and make sure it’s truly an accurate representation of what you’re going to pay.
If you’re continually going above what your posted range is, that may indicate a problem with how you’re valuing these positions. It may also create some kind of pay equity issues within your organization.
MC: Is this more challenging for a smaller company that maybe doesn’t have as robust of a hiring process as a larger company?
MP: I think the challenges for smaller and larger companies are different. For a smaller company, they may not have as robust of a compensation system. This may require them to take a closer look at their different jobs, more clearly define different levels within their organization and come up with a better structure for their compensation systems as a whole.
So that might be a challenge for a smaller company. A larger company may already have those systems in place, so that won’t be as much of a challenge for them. But then you have the issues of the national reach and how to define their ranges and all the general pay equity issues that come with this.
So I think the challenges are different, but definitely I see challenges all around.
MC: You wrote that many smaller employers do not have established compensation ranges for the positions they maintain or even those they seek to fill. Because of that, an honest range that covers everyone from a satisfactory to an ideal candidate could be vast. And so my question is, how are regulators handling cases when the possible range is really vast?
MP: If you have a range that truly is based on what you would pay for the position, so you truly have people within the same role at the low end of what you’re posting and the high end of what you’re posting, then generally agencies have said that is OK, as long as you have a good faith basis for how you’re defining this range.
But again, it’s an equity consideration of going too low or hiring someone at different ranges and how you’re going to compare people in the same role. I will also note that there are organizations out there that have created websites that publish these types of really broad ranges for companies and calling out companies who have these types of broad ranges.
So that’s another thing to consider. Your company may be targeted on one of these websites as not really complying with the spirit of the law, and that’s something to contend with in terms of a PR issue there.
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IV. PROCEDURES FOR SPEAKING OPENLY ABOUT WAGES
MP: I want to talk about the giant elephant in the room in this topic, and that’s the inevitable tension these rules create. And I read a quote from you that summed this up pretty well. You said, “There’s always been a bit of secrecy around what you’re making and not wanting to tell other people. I think it’s something that the public appears to be getting more comfortable with.”
My question is, I imagine you have a lot of clients who frankly are not comfortable with this. What do you tell them, and how do we handle this inevitable tension?
MP: I think there definitely has been a shift in recent years with people getting more comfortable with talking about their pay.
Generally there’s concerns from the National Labor Relations Act perspective as well with making it so that employees should be able to discuss their wages, and there’s protection in the law for employees being able to discuss their wages. I’m sure you’ve seen on social media, people going around asking what do you make in your current position?
So I think generally there is a shift in people being more comfortable talking about their wages.
MC: You said this is “inevitable” for HR executives to have to deal with, and that they will basically have to reframe how they think about it. And I think the fact that we are more comfortable talking about it allows them to reframe it.
So what are you hearing and what are you advising clients in terms of the inevitability of having to reframe how they think about this?
MP: Some clients are more comfortable with this as a general approach than others. Some have been considering similar initiatives with DEI efforts across their organization. So I have seen companies use this in a way that’s part of those initiatives. We are really focused on creating equity within our organization and a way that we do this is through these types of efforts and publishing our pay.
I have some companies who are already very transparent in what they’re paying. They already have a very transparent system where you know what people are making at different levels. I think it probably depends on the industry a lot as well, where some companies may not be there quite yet. So maybe it’s baby steps. Maybe first we are complying with just the laws in the jurisdictions that require it, and then maybe from there we broaden to having a larger approach. So I think we’ll get there, but it may take a bit more time for some organizations to get comfortable with that and to put in the procedures to really make it possible.
MC: What are some of those procedures?
MP: I think you need to come up with a more structured compensation system where you look at different levels and more leveling within your organization. In addition, beyond the job posting laws, there’s a lot of laws that require at some point during the application process or during employment, you might have to disclose pay separately from the job posting. So for example, someone transfers into a new role. In some jurisdictions, you’re going to have to affirmatively provide the pay range for their new position to that individual.
So in those types of situations, you’re going to have to have a system in place and change your procedures and processes for giving that information to employees and then hopefully documenting that you did indeed comply with the law.
MP: Let’s imagine I’m an employer with operations in multiple states and remote workers all over the country. Some of the states where I have operations have pay transparency laws and some don’t. If I call you and say, Maria, “How am I going to figure out all of this?” What steps are you going to walk me through to make sure my business complies with all the proper rules?
MP: I think the first step is looking at where you have employees.
If you have at least one employee in one of these jurisdictions, then for these remote positions, you’re going to have to modify your job postings to comply with those laws. So I think it’s about getting a level set on where your workforce is, and I think over the past few years, this has been different than what it would’ve been in the past.
There’s a lot more remote work and hybrid work. In a lot of cases employees are really spread out. So I think after that level set, you want to look into how you’re posting the position, the language that you’re using. I often help employers draft the language that they’re using and then take a closer look at their pay practices.
I think this opens up a discussion for their pay practices generally, their compensation structure, and the procedures we’ve been talking about.
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V. CAREER DEVELOPMENT: STORYTELLING, MOTHERHOOD AND BALLET
MP: Now I want to pivot and ask professional development questions. You joined Seyfarth initially as part of a fellowship program for law students with affinity for employment law.
That sounds to me like you were interested in employment law from very early on. Is that true? And if it is, what attracted you to employment law?
MP: Going into law school, I wasn’t really sure what field I wanted to go into. I think I wanted something where I felt like I made an impact, that was challenging, that was very people focused.
Taking an employment law class at law school interested me in employment law. I enjoyed that the employment relationship is something that impacts everybody, and it’s very people focused. There’s interesting stories, and I really liked the storytelling aspect of employment law. So from there I had a professor at St. John’s who recommended me for the Seyfarth summer fellow program. And it’s all history from there.
MC: Your use of the terms people-focused and storytelling interest me. Now that you’ve been practicing, does that passion for a people-focused storytelling approach continue to drive you?
MP: Absolutely. Any case that comes along alleging things like discrimination based on race or gender or something like that, there’s always a story behind that, not only from the employee perspective but also from the manager perspective.
The people who are the managers or supervisors at the company, they’re all people, too. They’re really trying to do their best in their jobs. And maybe they messed up on something or maybe they were just doing their job and holding someone accountable for the work that they were doing. So I think hearing each side of the story and coming up with a whole picture of the story is really interesting.
MC: What story does the drive to increase our pay transparency tell us about ourselves?
MP: I think it tells us that pay equity and issues affecting women are a big focus for our society. This goes back to things like the Me Too movement and pay equity generally, and wanting to give women an equal playing field on different issues.
MC: In the legal world, do you face challenges? What is the state of women in law?
MP: I think that being a woman in a law firm trying to raise a family is always going to be challenging. There’s no way around that. I have a six-year-old and a two-year-old, and balancing being a good mother with being a good lawyer is always going to have its challenges, and I don’t really have a good answer for how to balance those things. I do see an impact on my kids as well, with seeing me working and being a lawyer. Even my two-year-old son will grab one of our old laptops and type on it and say, “I’m working like mommy.”
To break those gender norms — Mommy’s the one that works and Mommy’s the one on her computer who’s a lawyer — I think helps to make things worth it when you’re in the challenging times of motherhood and law firm life.
MC: I’m going to jump back even farther into your life. One of your undergrad minors was theater, and specifically it was ballet. You were a dancer for how many years?
MP: Oh gosh. My entire life from a child through college.
MC: Now that you’ve been an attorney for a while and been through law school and all the challenges and tribulations we were just talking about, is there any crossover between the skills and abilities necessary to perform ballet and the skills and abilities necessary to be a lawyer?
MP: Having that experience, getting on your feet and performing in front of people and developing a skill and really working on something and then performing it, translates into the law. I mean, obviously I’m not performing per se in front of people, but that confidence and the feeling of stepping up and showing what you’ve been working on, that translates.
MC: A young woman graduates from college. She thinks she wants to go to law school. She says, “Maria, what has your experience been? Should I do this?” What do you tell her?
MP: I tell her it’s going be tough, but it’s rewarding. There is something special about whatever it is, whether it’s standing in front of a courtroom and presenting your arguments or whether it’s counseling a client on an issue that’s really causing them angst and helping them get through an issue and move past it and find the best solution that helps the organization. There’s parts of it that are just really rewarding as well. So it’s a challenging career, but it’s a rewarding career.
This AccelPro audio transcript has been edited and organized for clarity. This interview was recorded on March 17, 2023.
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