On March 21, 2024, the Vermont House of Representatives passed H.704 - an act relating to disclosure of compensation in job advertisements. I have worked very hard on this bill and am proud of the House pushing it through to the Senate on a near unanimous voice vote. Below are my remarks when I brought the bill to the House floor.
Madame Speaker
H.704 is a strike all amendment relating to the disclosure of compensation in job advertisements. Members who would like to follow along can find the amendment on page 1742 of today’s calendar.
H.704 is what my committee likes to call a “simple little bill” and while it may seem simple, it will have a great impact on pay equity. This strike all amendment takes what is already HR best practice and requires Vermont employers to disclose compensation or a compensation range, in job advertisements to prospective employees.
I'd like to offer some background on the significance of this amendment. On a national scale, women in the United States earn 84% of what men make. However, in Vermont we’re doing slightly better, women earn 93% of a man’s earnings, thanks in part to robust equal pay legislation enacted by this body.
Previous legislation on pay equity has enabled employees to openly discuss their pay with one another, making it easier to identify pay disparities; and has also prohibited the practice of requiring salary history from job applicants. I’d like to remind the body that even minor disparities in early career earnings will perpetuate over time. When salaries are based on previous earnings, women and people of color face systemic pay inequities, despite current employers having no intentional bias.
This bill targets two significant factors contributing to wage disparities: inequities in the negotiation process and lack of transparency in compensation. Pay negotiations often disadvantage women and people of color, who may be perceived as greedy or aggressive for negotiating assertively, unlike men who are viewed more positively in such situations. Research indicates that women may even ask for less during negotiations to avoid negative perceptions.
When employers enter negotiations without a predetermined salary range, candidates tend to rely on their past pay as a reference point. It's common for applicants to request a salary 10-20% higher than their previous earnings. However, given that women and people of color typically earn less than white men in the same occupations, they would need to demand a much larger increase to reach equity. Consequently, women and people of color often state lower salary requirements during negotiations.
Providing applicants with clear information about negotiation contexts significantly reduces gender disparities in negotiations. With this information, gender-based differences in negotiation diminish, leading to fairer outcomes.
Now let me go over the two sections of this amendment:
Section one of the amendment requires job advertisements to include the salary or wage range for the job advertised or a notice that the job is paid on commission. The job advertisement must include a job description should one exist. This section of the bill applies to jobs located and based in Vermont, and jobs that are available to internal and/or external candidates.
The requirements of this section do not apply to the following:
Employers with fewer than 5 employees
General hiring notices like “help wanted” signs
General invitations to find out more about working for an employers that are not related to a specific job
AND, verbal job announcements made in person, on the radio or on a similar digital or electronic platform such as a podcast.
Section two of the bill is the effective date of January 1, 2025
The committee heard from:
The president of Vermont Business Roundtable
Executive Director, Vermont Commission on Women
The bill’s sponsor
Legislative Counsel
Government Affairs Director, Associated General Contractors of Vermont
Labor Relations and Operations Manager, Department of State's Attorneys and Sheriffs
Vice President of Government Affairs, Vermont Chamber of Commerce
Public Policy Manager, Vermont Businesses for Social Responsibility
This bill passed out of committee with a favorable vote of 10-1-1 and we ask the body for your support.