How to talk to current employees about pay as Maine mandates internal disclosures

Summer in Maine means lobster, campfires, diving into crystal clear waters…and soon, getting a crystal clear vision of your pay.

The state known as “Vacationland” won’t take a break from pay transparency this summer, as it becomes the latest jurisdiction to require it with a law taking effect on July 29.

That law, which was signed by Maine Gov. Janet Mills in April, requires employers with 10 or more workers to share expected salary ranges not only in external job postings, but also with current employees upon request.

The internal disclosure provision sets Maine’s pay transparency law apart from many others in effect throughout the US, which typically only require businesses to disclose pay in job listings externally.

Nevertheless, many HR teams are likely already navigating conversations with current employees about compensation, even if it’s not required by law, sources told us.

What Maine’s pay transparency law requires. From July 29, covered Maine employers must include “the prospective range of pay” they expect to offer a successful applicant for an open position at their organization. If compensation for the role will be based solely on commission, they must indicate that.

Additionally, an employer must “disclose the range of pay the employer offers for the position the employee holds” if they request that information. Employers must maintain records of employees’ positions and pay history with the company.

Bernstein Shur, a law firm with offices in Maine, is advising employers to perform salary analyses ahead of the law taking effect, senior counsel Anne-Marie Storey told HR Brew via email. She recommended that businesses set salary ranges “based on pay scale, incumbent pay, budgeted amount, market data,” and document how they set these ranges.

Storey also noted that the law doesn’t require employers to disclose other features of their total rewards packages beyond base pay, such as benefits or bonuses, so she said companies will need to decide whether they want to include that information in job postings.

Navigating internal challenges. There are a number of challenges that can arise from disclosing pay internally with current employees, including pay compression or struggles to employees who discover they’re paid on the lower end of the range, Storey noted.

Many businesses are already dealing with such challenges, regardless of whether they’re required to disclose compensation internally, total rewards experts said.

NFP, an HR consultancy owned by Aon, recommends that employers share salary ranges internally before they post them externally, Megan Nail, SVP of the total rewards practice, said. This helps ensure that their compensation structures are up to date, and gives them time to correct any inequities that exist, she explained.

“Transparency is a statement about both internally and externally,” Ron Seifert, senior client partner with Korn Ferry, said. “If you’re gonna post it, you better be prepared to defend it internally, because you will get questions.”

Seifert noted that salary ranges in job postings often lack context. It’s up to HR teams and managers to paint a clearer picture for current employees with details about the company’s compensation principles, philosophy, incentive programs, and total rewards proposition, he added.

While it’s fairly easy for employers to announce pay ranges publicly, it’s harder to defend these ranges to employees internally, Seifert said. As such, HR teams may want to put additional resources toward training managers to have these conversations with their direct reports. “Sunshine is a great disinfectant,” he said. “It requires the companies to then be clearer about their principles and their and their strategy and their intent and their messages.”