On Thursday, May 6 Representative Barbara Carpenter’s pay transparency legislation HB 245 advanced without objection through the Louisiana House Labor Committee to the House Floor. HB 245 will allow employees to discuss their salaries without fear of retaliation from their employer. 

Mary Griggs, the President of the Independent Women’s Organization (IWO) commented on the bill, “Louisiana workers and women, in particular, are struggling financially. Louisiana is at the bottom of economic and well-being lists, so we know that federal law has not been enough to stop the discrimination that keeps us there.”

The bill will benefits workers, ensuring that they are being paid a fair amount. It will also incentivize businesses to make sure they are using fair pay practices and will ban businesses from asking for employee’s past salaries. 

Knowing an employee’s past salary can perpetuate discrimination from past jobs or even hinder candidates who had previous high-paying jobs. It can also lead to an employee being underpaid throughout their entire career. 

In particular, the bill will help women by enabling them to recognize when they are being discriminated against in regard to their pay. Julie Schwam Harris, the IWO Advocacy Committee Chair, said, “In 2013, the Legislature passed the ‘Equal Pay for Women Act’ that was intended to cover both public and private employment – but was amended to cover only state public employees. It had a provision to allow wage discussion and prevent retaliation and it has worked! The pay gap in-state public employment has gone down significantly – 9% – from women earning 84 cents on the dollar in 2013 to earning 93 cents compared to men. This kind of protection for discussion about wages is needed in the private sector in Louisiana where women earn significantly less than men at about 64 cents to the dollar.”

The gender pay gap is still a huge problem, especially for women of color. A 2018 report from the American Association of University Women found that white women make 79% of what white men make, black women make 63% of what white men make, Native American women make 57% of what white men make, and Hispanic women make 54% of what white men make. 

Pay transparency legislation, which has been implemented in 19 states, is an effective tool against gender and racial pay gaps since it allows individuals to know what their colleagues in similar positions are being paid. 

Lisa Diggs, IWO Vice President, said, “As a Black woman who has now started her own business, I know how hard it is to pay for basic family needs and to accumulate the resources to be an entrepreneur. HB 245 will benefit all women and workers, but is particularly important for minority women. We can’t wait – we need for workplace discrimination to end now.”

Dawn McVea with the National Federation of Independent Business opposed the proposal, saying that it would complicate hiring and duplicate federal law. This reflected many employer’s view that pay transparency is something positive for their employees but negative for them. However, that’s not necessarily true, unless an employer is grossly underpaying a select portion of its staff. 

So many companies have benefited from pay transparency. When Buffer made its compensation data public, applications to the company increased. When SumAll instituted a policy of pay transparency, they felt like their employees became more productive and collaborative. A 2016 Journal of Business and Psychology study found that employees were more likely to ask the right people for help when they were aware of what their colleagues make. Elena Belogolovsky, who authored the 2016 study explained that “When people don’t know each other’s pay, they assume they are underpaid” which can lead to resentment and a lack of collaboration. 

Jessica Cogan, IWO Corresponding Secretary, commented, “The good news is that many studies show that businesses that establish a positive workplace culture with more transparency are better off. Their employees are happier, more productive, and loyal, which cuts down on turnover stress and costs. They are also more attractive to dynamic young employees who are tech-savvy and know how to find things out online. Secrecy is a thing of the past and we want Louisiana to move into the future!”