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What impact, if any, have pay transparency laws had on income inequality?

Happy Friday! Welcome to today’s edition of HR Brew! That’s it. That’s the intro. Now on to the fun stuff…

In today’s edition:

Not-so-full transparency

Employer-provided benefits boost

A mattering of applause

—Courtney Vinopal, Mikaela Cohen

DEI

A sign that says 'Close The Pay Gap' is held by Nancy Reichman, a member of Colorado's Pay Equity Commission, during a rally in downtown Denver, CO on April 28, 2009.

Craig F. Walker/Getty Images

In 2007, Supreme Court Justice Ruth Bader Ginsburg wrote a blistering dissent in a Title VII case brought by Lilly Ledbetter, a former supervisor at a Goodyear Tire and Rubber plant who discovered she was paid less than male colleagues in equal or less senior positions, and sued for sex discrimination.

The dissent touched upon the pervasive problem of secrecy that today’s pay transparency laws are trying to solve. “Pay disparities often occur, as they did in Ledbetter’s case, in small increments; cause to suspect that discrimination is at work develops only over time,” Ginsburg wrote. “Comparative pay information, moreover, is often hidden from the employee’s view. Employers may keep under wraps the pay differentials maintained among supervisors, no less the reasons for those differentials.”

By the time Colorado enacted a law requiring employers to share salary information with potential job seekers in 2019, policymakers had been wrestling with fair pay issues like this one for decades. At the federal level they sought to remedy them first with the Equal Pay Act of 1963, and later with the Lilly Ledbetter Fair Pay Act of 2009, which expanded the statute of limitations on discrimination claims like Ledbetter’s, removing a hurdle for employees bringing lawsuits.

Let’s take a closer look at the history and impact of pay transparency requirements.CV

From The Crew

COMPLIANCE

Legislative Lowdown recurring feature illustration

Francis Scialabba

The budget bill that President Donald Trump signed into law on July 4 will extend tax cuts enacted during his first term that had been set to expire, while making major cuts to social service programs like Medicaid and the Supplemental Nutrition Assistance Program.

At the same time, it deepens investments in certain types of employer-provided benefits, such as dependent care assistance programs, paid family and medical leave, and student loan repayments.

We’ve highlighted a few provisions within the 900-page law that may prove relevant to HR pros.

Dependent care FSAs. Starting Jan. 1, 2026, the annual amount that employees can contribute to a flexible-spending account for dependent care expenses will increase from $5,000 to $7,500, or to $3,750 for married individuals filing their taxes separately.

FSAs, which allow employees to make pre-tax contributions toward expenses like daycare and preschool, are by far the most common family care benefit employers offer, according to SHRM.

The change marks the first permanent increase to this spending cap since 1986.

Here’s the scoop on the employer-provided childcare credit increase.—CV

HR STRATEGY

Two hands holding on opened book with text highlighted

Emily Parsons

Telling employees that they matter can feel stuffy.

But it’s become a crucial talent strategy to train leaders and managers on the skills that help employees feel like they matter, according to Zach Mercurio, leadership researcher and author of The Power of Mattering: How Leaders Can Create a Culture of Significance.

Mercurio chatted with HR Brew about his book and why a mattering strategy matters to people pros.

This interview has been edited for length and clarity.

We chatted about leadership lessons in your book The Invisible Leader last year. What new ideas did you bring into this book?

My first book was about the power of purpose, which is our contribution and knowing our use and usefulness, but it’s very difficult for someone to see their contribution if they don’t first believe they’re worthy of contributing, so I almost see this book, The Power of Mattering, as the prequel.

This is a book about how do you create an environment where the people around you actually feel worthy of contributing, and making sure that people feel valued, and then know how they add value, that they feel seen, and that they feel heard, and that they feel needed…In psychology, that name of that feeling…is called mattering, and it’s a distinct concept that can only be generated through interpersonal interactions.

For more on why this is important for HR, keep reading.—MC

PATCH NOTES

A desktop computer plugged into a green couch.

Francis Scialabba

Today’s top HR reads.

Stat: Musculoskeletal injuries account for 56% of workplace injuries, costing employers roughly $32.6 billion. (Liberty Mutual)

Quote: “Men are still expected to climb up the career ladder, to show that they’re highly committed to their job. And one way to demonstrate that is by showing their loyalty to the organization to go back to the office.”—Wen Fan, associate professor of sociology at Boston College, on gender disparities regarding RTO, and how that could impact women (Marketplace)

Read: Economic experts say E-verify doesn’t work properly, putting employers and their workers at risk of ICE raids and identity theft. (CBS News)

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