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57% of companies want to adopt geographic compensation policies – Here’s why it’s a problem

A new survey reveals that more and more companies are exploring the gaps between salaries of remote and hybrid workers.

According to the 2022 Pay Clarity Survey from consulting firm Willis Towers Watson (WTW), 17% of companies currently disclose pay ranges in states where it is not required by law. However, 62% said they intended to do so in the near future.

“Employers who currently disclose salary range information but are not required to do so often will do so based on several different factors,” said Mariann Madden, co-head of North America Fair Pay at WTW.

“Company culture and willingness to provide visibility and clarity in compensation structures, programs and policies [are all factors]. However, these companies often have the basic job and compensation structures already in place, which helps communicate pay scales to the workforce.

More than half of respondents said they were beginning to adopt a geographic compensation policy, where salaries would depend on where the employee lives. However, this strategy has been widely criticized by professionals, especially regarding the gaps between teleworkers and office workers.

For example, Google has always paid its employees based on their geographic location, but the pandemic has caused tens of thousands of employees to relocate. This means some have seen pay cuts simply for moving.

With pay transparency laws becoming more commonplace, companies like Google will need to figure out how to handle disclosing pay scales in job postings.

While some organizations have addressed this issue by excluding applicants from certain states like Colorado, the more prevalent these laws become nationally, the less organizations will be able to avoid these policies.

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