Navigating pay transparency: a closer look at employer pay ranges

Key findings

Over the last few years, more and more states have passed pay transparency laws, requiring companies to publish pay ranges when advertising open jobs. As questions about enforcement of these new pay transparency rules remain, it is natural for job seekers to wonder about the accuracy of the published pay ranges. Glassdoor’s unique dataset allows us to assess the accuracy of the employer-provided pay ranges in online job advertisements by comparing pay ranges against user-reported salaries for the same job, employer and city.

Pay ranges are largely accurate, but discrepancies exist.

Job listing descriptions of salary ranges are accurate roughly two-thirds (67%) of the time, meaning 67% of employer-provided salary ranges have user-provided salaries that fall within the range. By contrast, in 22% of job listings, the actual salaries were below the posted range, while the remaining 11% had salaries that were above the range.

Though a majority of salary ranges are accurate, job seekers are still left with a sizable fraction of inaccurate information. Perfect compliance is unrealistic, which leaves the question of: why do some of these discrepancies exist, and how much is reasonable to expect?

The language found in salary transparency laws is flexible, leaving employers with ample room for error. For instance, California defines the salary pay scale as what “the employer reasonably expects to pay,” and Colorado requires that the employer provides “in good faith [what] it might pay.” This flexibility is reasonable, given the ever-changing market conditions that inform hiring decisions. However, job seekers should also consider that this may incentivize employers to err on the side of posting a larger pay range in order to attract more exceptional candidates or to post lower pay ranges to preserve more room for negotiation.

Another possible source of discrepancy lies in measurement of data. Jobs may have additional levels of seniority that are not reflected in their titles. User-reported salaries at the job title level may then over or underestimate the true pay, if a certain job title encompasses multiple levels of seniority. Additionally, to increase the number of matches, we include salary data dating back to 2023 while job listings are taken from the first half of 2024. Therefore, user-reported salaries may underestimate employers’ true current pay if those pay bands have been increased since the user reported their salary.

There is no difference in accuracy between states that have pay transparency laws versus those that don’t.

At the beginning of 2024, five states – California, Colorado, Hawaii, New York, and Washington – already had legislation in place requiring employers to provide good faith estimates of salaries when advertising open jobs. The accuracy of the salary ranges posted in these states does not differ greatly from those voluntarily posted by employers in all other states without statewide pay transparency requirements. 

It is possible that the companies voluntarily posting salary ranges, even where it is not legally required, differ from other companies in their commitment to transparency. Therefore, the comparison of companies in states with pay transparency laws versus companies in states without those laws is not a truly equivalent comparison. However, the voluntary act of sharing salary information could be a signal to job seekers that a company values transparency.

Accuracy is highest in job listings at large employers and for roles with less incentive compensation.

Salary ranges published in job listings for large employers have the highest accuracy, compared to salary ranges in job listings for small and medium sized employers. These larger employers may be stricter about compliance, or perhaps are able to negotiate less on offers due to their larger brand size and reputation.

Accuracy also varies among different job types. The figures below show the top 10 and bottom 10 occupations with accurate employer-provided pay ranges. Related jobs are grouped into occupation categories to better capture a range of roles.

The occupation categories with the lowest proportion of accurate pay ranges tend to be those with high shares of variable compensation, such as tips or commissions. For example, beauty workers and drivers rely on tips, while sales managers, sales representatives, account executives, underwriters, solutions specialists and producers have higher sales commissions. Pay ranges for roles with high variable compensation may be less accurate if a job listing advertises the additional compensation as total pay. Job seekers looking to take a job with a high share of variable compensation should make sure to consider how accurate the stated range will actually be, given this information.

Employees most often fall in the lower half of the advertised salary range.

When looking at an advertised salary range, it is natural for job seekers to assume they will land in the middle of that range or even aspire to land at the top of the range; but in practice, they more often fall in the bottom half of the range. This is especially important as the difference between the top and bottom of the range can be tens of thousands of dollars. For example, in our data, the average range spanned $15,000 with a minimum at $61,000 and maximum at $86,000. 

The figure above shows the percentile of reported salaries relative to the advertised range, for salaries that fall within the range. Over 60% of salaries fall below the median of the pay range. This means that for the job seeker, seeing a range does not guarantee that actual pay is likely to be at the median of the range, but rather, it would likely fall in the lower half. 

Conclusion

As pay information becomes more widely available, one challenge faced by job seekers is interpreting and using the newly available information. This analysis sheds light on some of the ways in which job seekers should think about pay ranges, starting from where they might fall on a pay scale, as well as how their occupation can impact their pay. 

Some important lessons for job seekers when interpreting salary ranges in online job advertisements include:

Information included in online job postings is certainly not the only source of salary information that job seekers rely on. Many also turn to social communities to ask about and share salaries directly from other employees, an example of which is Glassdoor’s community bowls.

Data and Methodology

This analysis is based on data from Glassdoor on job listings from January 1, 2024 to July 1, 2024 and salary ranges are either supplied directly by the employer or are extracted from job descriptions. Job listings were matched to employee-reported salaries data on Glassdoor from January 1, 2023 to July 1, 2024 with the same employer, city and job title, resulting in 147,568 job listings matched. This analysis was limited to full-time employees in the U.S. only.

Note: A few more states have passed pay transparency legislation that goes into effect after June 30, 2024 (Illinois, Maryland, Massachusetts, Minnesota and Washington D.C.). These states and regions are included in “All other states”, as not enough time has yet passed to observe their results.