Opportunity Transparency Legislation Cheat Sheet

| September 6, 2023 | 3 min read
Opportunity Transparency Legislation Cheat Sheet

As pay transparency requirements continue to expand across the globe, a complementary concept called “opportunity transparency” is taking root. Aimed at dismantling barriers to advancement and fostering a level playing field, opportunity transparency has just started to gain momentum through legislative actions. Colorado, Illinois, and the European Union (EU) have emerged as pioneers who are broadening the conversation about workplace fairness to include transparency around opportunities for promotion and career growth. 

This is a relatively new concept, so to help companies understand why opportunity transparency matters and how to comply with emerging requirements, our team of experts has put together a comprehensive cheat sheet outlining current opportunity transparency legislation across the globe.

 

What is opportunity transparency?

Opportunity transparency is the employer practice of openly communicating information about opportunities for promotion and career advancement in the company and transparency around the requirements for advancement such as criteria for pay levels, pay progression, and career progression.

 

Opportunity transparency is directly tied to the oft-cited median pay gap.  A company can reach “100% pay parity” between genders for jobs that perform similar work, but still have an all-up pay gap between what women in the company earn overall and what men earn overall. This is because pay gaps are also rooted in unbalanced representation in leadership positions and other higher-paying roles. 

Disparate levels of promotion are seen as one of the key factors explaining why women still earn only about 80 cents on the dollar compared to men [in the U.S.]. A 2022 study by consultant McKinsey & Co. and the women’s advocacy group LeanIn found that for every 100 men elevated from entry-level to manager positions, only 87 women are promoted and only 82 women of color. That’s a factor in men holding almost two-thirds of manager roles, despite comprising only half the workforce, the study showed.”

– Bloomberg | States Put New Spin on Pay Gap Laws With Promotion Transparency

The goal of these opportunity transparency laws is to focus on closing this representation gap.

 

What is opportunity explainability?

Opportunity explainability is defining promotion policies and clearly explaining what it takes to progress in both level and pay.

 

Opportunity explainability combined with opportunity transparency contributes to opportunity equity by making the path to career advancement and success more accessible and fair for all employees, regardless of their background, gender, ethnicity, or other factors.

When companies prioritize and implement opportunity explainability, they create an environment where every employee can understand the steps they need to take to move up in the organization. Lack of clarity around requirements for success can lead to frustration, feelings of unfairness, and demotivation.

But by clearly outlining the criteria for advancement and the skills needed to succeed at each level, companies empower their employees to make informed decisions about their career paths. This not only helps individuals to set clear goals and work towards them but also fosters a sense of trust and engagement among the workforce. 

Additionally, eliminating the ambiguity that often surrounds career progression, opportunity explainability also helps breakdown barriers for underrepresented groups. When managers don’t have clear policies and guardrails to follow for evaluating and promoting employees, it leaves a lot more room for manager discretion — which in turn leaves a greater opening for the influence of unconscious bias to enter the process in performance reviews and promotion decisions.

Clear, detailed promotion policies are easier to apply consistently and equitably — and sharing them openly helps create accountability for managers to be able to defend and explain their promotion decisions.

 

 

Common requirements:  Legislative comparison

Requirement EU IL CO
Must disclose pay or progression criteria
Must post promotions / job opportunities
Must provide information about the selected candidate

Current global opportunity transparency requirements

Location Requirement Exceptions Effective
EU (Directive on Equal Pay & Transparency) Must disclose pay or progression criteria: Employers shall make easily accessible to their workers the criteria that are used to determine workers’ pay, pay levels and pay progression. Those criteria shall be objective and gender neutral.

Resource:
Resources bundle | Be prepared for EU pay transparency requirements (including cheat sheet, LinkedIn Live recording, FAQs, playbook, and checklist)
Member States may – but are not required to – exempt employers with fewer than 50 workers from the obligation, when they transpose the EU Directive. When transposed, no later than June 7, 2026
Colorado Must disclose pay or progression criteria: For positions with career progression (for example, moving from Operator 1 to Operator 2) must disclose and make known to all eligible employees the requirements for career progression, in addition to each position’s terms of compensation, benefits, full-time or part-time status, duties, and access to further advancement. Career progression promotions are “regular or automatic” promotions based on time in role or other objective metrics.

Must post promotions / job opportunities: An employer shall make reasonable efforts to announce, post, or otherwise make known each job opportunity to all employees on the same calendar day and prior to the date on which the employer makes a selection decision. Colorado removed the requirement to post career progression promotions, replacing it with the obligation to post career progression criteria. Career development promotions, which “reflect work performed or contributions already made by one specific employee, without competition” are not required to be posted.

Must provide information about the selected candidate: Post-selection, and within 30 days after the selected candidate starts work, an employer must make reasonable efforts to announce, post, or otherwise make known to the employees with whom the employer intends the selected candidate to work with regularly work the following information: ) (1) the name of selected candidate; (2) the former and new job title for the selected candidate, and (3) information about how employees may demonstrate interest in similar jobs (e.g., identifying individuals or departments to whom employees can express interest in similar job opportunities). This requirement does not apply to career progression or career development promotions.
Does not apply if the employer does not have any employees in Colorado. The job opportunity posting requirements do not apply if an employer is only physically located outside of Colorado and has fewer than fifteen employees working in Colorado, all of whom work only remotely, then, through July 1, 2029, the employer is only required to provide notice of remote job opportunities. January 1, 2024
Illinois Must post promotions / job opportunities: An employer shall announce, post, or otherwise make known all opportunities for promotion to all current employees no later than 14 calendar days after the employer makes an external job posting for the position. If the job is not externally posted, internal posting is not required. Does not apply to employers with fewer than 15 employees. Only applies to positions that (i) will be physically performed, at least in part, in Illinois or (ii) will be physically performed outside of Illinois, but the employee reports to a supervisor, office, or other work site in Illinois. January 1, 2025

How to achieve opportunity equity

If companies don’t provide equal access to career advancement and improve inequitable attrition rates, they will never achieve their leadership diversity goals or close their pay gaps. Learn the five steps for achieving opportunity equity at the infographic linked below, and explore Syndio’s OppEQ® solution — custom-built to be your data-driven roadmap for moving from performative goals to real progress. 

 

 

The information provided herein does not, and is not intended to, constitute legal advice. All information, content, and materials are provided for general informational purposes only. Links to third-party or government websites are offered for the convenience of the reader; Syndio is not responsible for the content on linked pages.

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